William Hill’s profits crash despite World Cup boost

The bookmaker William Hill has seen its profits fall by 26 per cent in the first half of 2014.

The firm has attributed the drop to “more customer-friendly results”.

For the first six months of 2014, the firm’s profits were £98.6 million. Net revenue rose by 7 per cent to £805 million in large part because of what has been described as a “very positive” World Cup performance.

Indeed, the World Cup saw the bookmaker take £172.5m of bets, beating the punter to £27.8m in gross wins. This is significant when compared to the 2010 World Cup. Betting from retail, online and telephone increased by 80 per cent to £208 million from that tournament.

However, despite this, the company’s gross win margin was down to 18.4 per cent from 27.9 per cent, which most likely reflects the unpredictability of this year’s edition.

Earnings per share (adjusted) fell by 16% to 14.1p in the 26 weeks to July 1.

Following this announcement, the bookmaker’s shares have dropped 0.82 per cent on the results. This is in a week which has seen stockbroking firm Numis Corp suggesting that the company should explore a merger with Paddy Power.

Numis Corp said in a note that was addressed to the industry: “This (merger) would create a much more attractive investment than either alone. Taking the best from each company would result in a business with outstanding technology and marketing. Plus, we really like Will Power as a name for the company.”

The CEO of William Hill spoke positively about the latest figures, saying that he is pleased with how the company has navigated tricky regulatory conditions and a volatile period for sports betting.

“What excites me most is the potential for the business both in the UK and internationally as well as potential in both the digital world and on a multi-channel basis. We have an outstanding team whose insights are being applied to our international operations,” he said.