William Hill profits boosted by football as bookmaker reviews Australia business
BOOKMAKER William Hill has said it is on course to beat full-year profit expectations, while also announcing a strategic review of its Australia business.
The group said adjusted operating profit for 2017 is expected to come in at £290 million, an increase of 11 per cent on the previous year, reflecting "good momentum" in both the UK and US markets.
It put this down to favourable football and horseracing results, a stronger gross win margin and the benefits of its transformation programme.
However, William Hill added that a ban on credit betting in Australia and the likely introduction of a "point of consumption" tax in a number of states will put profits under pressure, leading it to undertake a strategic review of its operations in the country.
William Hill said late last year that it was in early-stage discussions over a possible tie-up between rival CrownBet and its Australian business.
Boss Philip Bowcock said: "We have delivered a strong result in 2017, reflecting our focus on rejuvenating online, growing the US and building an attractive omni-channel proposition.
"At the same time, we are continuously improving how we enable customers to gamble responsibly.
"We are excited about the opportunities ahead in 2018 - a World Cup year - with our competitive position reasserted in the UK and with the potential for sports betting to open up in the US."
The trading update comes after the firm in December named betting industry veteran and Football Association director Roger Devlin as its next chairman.
The group said Mr Devlin will join the board as chairman-designate on February 1 and take over from incumbent Gareth Davis on April 2.
His appointment comes at a crucial time in the betting sector amid a wave of consolidation, with rival Ladbrokes Coral reviving takeover talks with Foxy Bingo owner GVC in a deal worth up to £3.9 billion.
George Salmon, equity analyst at Hargreaves Lansdown, said: "World Cup years are always big for the bookies. With trading in the UK and US looking better, unlike the England football side, William Hill is going into 2018 with improved momentum.
"Unfortunately, there are some parallels with the England cricket team too. Betting on credit has been banned in Australia, meaning that's proving a difficult territory at the moment. This probably explains why the group entered talks with CrownBet about a possible sale of its Australian business."
Shares were flat at 336p in afternoon trading.