William Hill plan staged shop openings as revenues plummet due to Covid-19
William Hill are planning a staged reopening of their betting shop estate in the second half of the year after reporting their revenues have plunged by more than 50 per cent because of the Covid-19 crisis.
In a trading statement released on Friday, the bookmaker said that revenue in the first ten weeks of the year had fallen by five per cent.
However, sports cancellations and the closure of their retail operations in Britain and the United States meant total group revenue fell by 57 per cent in the period from March 11 to April 28.
William Hill added that online sports betting had declined by less than anticipated as customers switched to alternative products such as table tennis and the more obscure football leagues.
Monthly cash outflow had been reduced to around £15m through measures including reducing staff costs and marketing spend and utilising government support such as business rates relief.
They have also agreed a covenant waiver with their lending group of banks.
Hills said that each additional month of shop closures would now lead to reduced earnings of between £12m to £15m, assuming the continuation of government support for furloughed workers, approximately half of the initial estimate.
However, they were withdrawing all future guidance due to the uncertainty caused by the Covid-19 pandemic.
They did add that they were "planning for a staged opening of the UK retail estate in the second half of 2020" and monitoring developments across the US.
Chief executive Ulrik Bengtsson said: "William Hill has overcome many challenges in its 86-year history, and I am exceptionally proud of the team and their response to the COVID-19 pandemic. We have worked hard to protect them, and in turn they have done the same for our customers.
"We reacted quickly to the cancellation of sports activities and the closure of our retail estate. We took immediate measures to save costs, reduce cash outflow and minimise non-essential expenditure by negotiating with our suppliers, cancelling pay rises and executive bonuses and suspending the dividend.
"We have preserved liquidity and amended the terms of our net debt covenant, leading to significant, balance sheet headroom. This will enable us to continue to invest for growth, most notably in the US, as plans there to roll out sports betting continue apace."
Gavin Kelleher, gaming and leisure analyst at Goodbody, said that William Hill's update contained "more positives than negatives".
However, he added: "William Hill faces a tough recovery post the Covid lockdown given its exposure to retail in the UK and the US."
William Hill's share price ended Friday around eight per cent higher at 115.35p.
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