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Tuesday, 13 November, 2018

William Hill bolster board as online performance improves

William Hill: revenue up for start of 2018
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William Hill have brought in betting industry heavyweights John O'Reilly and Mark Brooker to shake up their board as the bookmaker reported signs of recovery in their online division on Monday.

Hills have gone through a turbulent period in 2016 with the departure of chief executive James Henderson, a rejected takeover attempt from Rank and 888 and failed merger talks with Amaya shaking confidence in the company.

Their board has also been criticised for lacking betting industry experience but that has been remedied by the appointment of O'Reilly and Brooker, who along with former Tesco chief customer officer Robin Terrell will join as non-executive directors next year.   

O'Reilly has more than 24 years' experience in the betting and gaming industry having established Ladbrokes' digital operations and initiated the turnaround of Coral's online business.

He said he was "looking forward to making my contribution towards re-establishing William Hill as the leading performer in the sector".

Brooker was chief operating officer at Betfair, leaving the company after their merger with Paddy Power.

The appointments were described as "a positive for the company" by analysts at Barclays.

William Hill chairman Gareth Davis said: "These appointments significantly enhance the board’s digital, multi-channel and gambling industry experience.

"John's, Robin's and Mark's collective expertise will strengthen the business as we implement our strategy of digital and international diversification."

In a trading statement for the 17 weeks to October 25, Hills said they had seen early signs of improved online performance, with sportsbook net revenue up 11 per cent and amounts wagered up six per cent.

William Hill were the victim of a distributed denial of service (DDOS) attack earlier in November which caused their website to crash but interim chief executive Philip Bowcock told analysts that while such events were always difficult and concerning it was not likely to have a material impact on the business.

In Hills' betting shops total net revenue was reported as being "flat", with over-the-counter net revenue down six per cent but gaming machine net revenue up six per cent.

The company reiterated they expected full-year operating profit to be at the top end of previous guidance of £260-280 million. And they added they had identified opportunities for around £30m of cost savings on an annual basis which they are planning to implement in 2017.

Bowcock said: "Looking forward, we remain on track to deliver 2016 operating profit at the top end of our guided range. With our significantly improved products and user experience, we are confident this is the right time to invest further in our online business.

"Therefore, the marketing efficiencies we are announcing today will be reinvested in driving faster digital growth to benefit future performance."

Analysts at Goodbody said the signs of improvement in the UK online business were "encouraging".

However they added: "More needs to be done to return the business to market growth rates."

William Hill's share price rose on the back of the news and was up 4.9p at 288.5p on Monday afternoon.


Comment: some good news at last for William Hill

William Hill have endured a tumultuous 2016 so it will have come as a relief to the company to be able to unveil some good news to the City on Monday.

Their faltering performance in online has left them trailing behind their rivals in recent months but at last they were able to show signs their turnaround strategy is starting to bear fruit.

Observers have also welcomed the appointment of three new non-executive directors, two of whom are well known to the industry.

One of the criticisms William Hill have faced is the lack of experience of the sector on their board but the arrival of John O'Reilly and Mark Brooker will address that.

With recent gossip that William Hill's chairman Gareth Davis may not be with them for much longer, the speculation has already started that one of them may step into his shoes. And the company is also still without a permanent replacement for James Henderson.

There is a cloud to go with the silver lining though thanks to the decline in over-the-counter business in Hills' betting shops and the increasing reliance on gaming machines. That may not be a good place to be given the government's ongoing review of gaming machines.

John's, Robin's and Mark's collective expertise will strengthen the business as we implement our strategy of digital and international diversification
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