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Tuesday, 11 December, 2018

Hills eye growth as hunt for new chief nears its end

William Hill: interim CEO Philip Bowcock is to continue on an acting basis
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William Hill reported signs of a return to growth following a turbulent 2016 on Friday – but there was still no news about who would take that recovery forward.

There had been speculation interim chief executive Philip Bowcock would be named as the permanent successor to James Henderson, who left the company last July, but no announcement was forthcoming.

Chairman Gareth Davis did, however, say there would be news in "a few weeks' time".

Hills had warned in January that unfavourable racing and football results meant profits would be at the bottom end of their forecast range, and so it proved as they released their results for 2016, with operating profit down ten per cent at £261.5 million from revenues of £1.6 billion, up one per cent.

The company's online operation was the subject of a great deal of attention last year, by the end of which net revenue was down three per cent and operating profit down 20 per cent.

'A lot has been achieved'

However, Hills said this year the trends across all divisions were positive, including in online, with UK sportsbook wagering up ten per cent and UK gaming net revenue up eight per cent.

Bowcock said: "Overall I think the business is in a much stronger position than 12 months ago. A lot has been achieved, especially in the online division.

"The sportsbook has returned to growth in the first seven weeks of this year and the reason for that is I think we have got a far better customer product now than 12 months ago.

"It's early days, ten per cent growth in the first seven weeks does not make a year, but I'd rather be in this position than the position we were in last year. I think we've got momentum."

Bowcock said the firm was making "good progress" in retail, with the aim of having a self-service betting terminal in every shop this year.

Hills are also the only major betting shop chain to have all British racing available in shops having signed up to The Racing Partnership. However, Bowcock said it was too early to say whether that had made a difference.

He added: "We're a few weeks into the situation and will continue to offer the best possible experience to customers who walk through our doors, and we'll see what happens."

Bowcock, who said the planned levy replacement system would cost Hills £6m-£7m a year, also hinted there would be no repeat of their promise to be best price about every horse at the Cheltenham Festival this year, with results having hit them hard in 2016.

He said: "We want to make sure we're offering a competitive product but we're not going to be stupid."

The government's review of gaming machines appears set to hang over the industry until deep into the year, with the government's findings being published in the spring, with indications being it would be followed by a consultation which could go through to late summer or early autumn.

Priorities lie elsewhere

Hills have so far missed the wave of consolidation happening in the gambling industry, and Bowcock said the firm's priorities were elsewhere – growing market share, international growth and technology.

"In the short-term I and the rest of the management team are single-mindedly focused on that," he said.

During the week there had been speculation Bowcock would be announced as permanent chief executive.

While that was not the case, Davis said: "I'm pleased to say we're now entering the final stages and expect to complete an announcement in a few weeks' time."

Hills' share price rose on the back of the result and was up 6p at 267.9p on Friday afternoon.

Overall I think the business is in a much stronger position than we were 12 months ago
E.W. Terms
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