Insight UK William Hill Financials
Founded in 1934, William Hill is one of the most trusted brands in our marketplace, attracting millions of customers from around the world. Employing more than 16,000 people in nine countries, William Hill continues to transform the betting business, investing in new technology and innovation. In addition to the UK Retail and Australia markets, WH’s online business is headquartered in Gibraltar with its marketing and customer service functions in Israel, Bulgaria and the Philippines. WH also has licensed websites in Italy and Spain, and William Hill US operates in the states of Nevada and Delaware.
William Hill: relishing the prospect of a big year of sport
James Henderson, CEO William Hill
Having recently published its financial results for 2015, William Hill’s CEO James Henderson and CFO Philip Bowcock, discuss the company’s performance and address the major issues affecting the business into the future
You've publishing your final results for 2015, so how would you summarise performance?
James Henderson (JH): I think I'd sum it up as a very solid performance. We achieved a £291.4m, so a very solid performance, but you've also got to remember we had £87m worth of additional taxes, so if you strip them out actually our profit increased by two per cent year-on-year. Across the divisions, retail saw another resilient performance and is the most profitable channel.
America again continues to go from strength-to- strength and mobile now accounts for over 50 per cent of the revenues. It was a huge year too for Australia, which saw a big turnaround and we exited the year with a turnover growth in single-digits which is very, very pleasing.
As for online, it’s probably best to sum up as good growth in the core product, in all of the core territories, but slightly dragged down by the Rest of the World, but all-in-all a really solid performance.
Philip, turning to the financials, revenues, profits and EPS were all down, so shouldn't that be a cause for concern?
Philip Bowcock (PB): No, because I think you need to look at it in two distinct parts. Revenue was down, primarily because it was a non- football tournament year. Also we had slightly lower gross win margins, so that accounted for a decline as well. But when we look at the profit and the EPS numbers, without the £87m of additional taxes coming through that James has spoken about, both profit and EPS would have been up, again showing the resilience of the business. So actually it was a solid year, as James has said.
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ONLINE Looking at Online, growth there has been slower
than in previous years, so are you concerned about losing market share?
PB:No, you need to look at Online in two parts. We’ve recently announced that we’ll split the reporting between ‘core’ and ‘other’, so core being our UK, Italy and Spain markets, and in those markets we saw double-digit growth. In our other markets, the other international markets in which we operate, we unfortunately had to close in five markets due to regulation and, yes, we saw revenue decline as a result. But in those core market in which we operate growth was good.
Could you give us an update on your planned marketing spend? Have you got big plans for the forthcoming European Championships?
PB: We expect marketing to go up by double- digits in 2016 over 2015, for me it’s about spending the money in the right way. We’re not constrained by how much we spend, for me it’s about spending it in the right way.
JH: And I think it’s also important to note that the collateral for the Euros was acquired last year so the BT, Sky and ITV assets were acquired in 2015 and they'll run through Euro 2016, so we're in a good place to be able to capitalise and make sure that we get our share of voice.
You've now launched the Sportsbook mobile site, and the new iOS app, both developments to come out of Project Trafalgar. What in real terms does this mean for William Hill?
JH: Huge strategic important to start with. Te whole point is to be able to reduce your reliance on third parties and having Trafalgar means we
take charge of our frontend and what that allows us to do is to move at pace, so we can innovative and release new product on a regular basis. So since we launched Trafalgar we've been making 20 releases a week and we've actually also released five native apps since then as well. So that allows us to bring product through much quicker and therefore provide our customers with a differentiated and exclusive product range.
RETAIL Looking at Retail, what are the major trends that
you're seeing? Are you concerned that the performance of your machines hasn't been quite as strong as that of your competitors?
PB: When I look at Retail I look at the overall, so I look at the overall shop performance. Yes, the gaming machines did not perform as well as we would have liked in the first half, we were putting new machines out, we had a content freeze while we did that, but subsequently into quarter four of last year we actually had some content coming out and we saw good growth in our machines. I look at the whole estate, and if we look at shop performance we are market leading. Whether the consumer spend is over the counter or it’s on machines, it’s about maximising the opportunity of those shops.
You've often spoken about your omni-channel strategy, where exactly does Retail fit within that and your self-service betting terminals?
JH: Yes, omni-channel is a key part of the strategy because we are number one in Retail, we’re now number two in Online, and that’s a huge opportunity to leverage that customer base. Only 28 per cent of our retail customers use online, but only 45 per cent of those use William Hill, so we have a huge opportunity to
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