William Hill PLC Good underlying performance during period of substantial change

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William Hill PLC (LON: WMH) announced its final results for the 53 weeks ended 1 January 2019 (the period or 2018). Comparatives relate to the 52 weeks ended 26 December 2017.

	Statutory results			Adjusted results
	53 wks to 1 Jan 19 £m	52 wks to 26 Dec 17 £m	Change %	53 wks to 1 Jan 19 £m	52 wks to 26 Dec 17 £m	Change %
Net revenue	1,621.3	1,592.8	+2%	1,621.3	1,592.8	+2%
Existing operations adjusted operating profit¹	–	–	–	266.8	273.8	-3%
US Expansion operations²	–	–	–	(33.2)	–	–
Adjusted operating profit³	–	–	–	233.6	273.8	-15%
(Loss)/profit before interest and tax	(687.9)	177.4	–	–	–	–
(Loss)/profit before tax	(721.9)	146.5	–	200.2	237.4	-16%
Discontinued operations – Australia⁴	3.8	(225.6)	–	4.5	13.0	-65%
(Loss)/earnings per share (EPS) (p)⁵	(83.6)	16.6	–	20.6	26.1	-21%
Dividend per share (p)	12.0	13.2	-9%

Financial results

· Group net revenue up 2% to £1,621.3m

· Adjusted operating profit from existing operations1 down 3% to £266.8m, in line with expectations

· Exceptional charge and adjustments of £922.1m including, as previously reported, £882.8m non-cash impairment to Retail following Triennial Review decision leading to statutory loss before tax of £721.9m

· Operating cash flow before movements in working capital up 9% to £275.0m

· Balance sheet remains strong with net debt for covenant purposes6 of £308.1m, 1.0x EBITDA at period-end

· Full-year dividend of 12.0p per share, in line with policy to pay out approximately 50% of underlying earnings, based on adjusted EPS before US Expansion costs in 2018

Good progress against strategic priorities

· Driving digital growth in the UK and internationally

o Good underlying Online performance: actives +25%, underlying net revenue +6% and operating profit up 11% before c£17m impact of enhanced customer due diligence measures

o Acquisition of Mr Green for c£242m completed in January 2019, building international base and capabilities

· Growing a business of scale in the US

o US Existing business delivering continued strong momentum with 42% net revenue and 91% adjusted operating profit growth (in local currency)

o US Expansion business now live in six states, access secured to 17 states in total

o 34% market share by revenue across all seven regulated states in these early stages

· Remodelling Retail

o Resilient performance with net revenue down 2% with challenging trading backdrop on the UK high street

o Ready for implementation of new £2 stake limit on B2 gaming products in April 2019 and reshaping of Retail estate

· Nobody harmed by gambling

o Voluntary whistle-to-whistle TV advertising ban agreed during pre-watershed UK live sport

Philip Bowcock, Chief Executive Officer of William Hill, commented:

“2018 was a busy and decisive year for us. Key regulatory decisions in the UK and US gave us much needed clarity to set a new five-year strategy and a goal to double profits by 2023. We have three businesses at different stages, with Online growing in the UK and diversifying internationally, Retail being remodelled in response to the new £2 stake limit, and rapid expansion in the US sports betting market. Underpinning this, we have taken a clear leadership stance around safer gambling with our Nobody Harmed ambition.

“Against this backdrop, we delivered a good underlying performance in Online, strong growth in the US Existing business and a resilient Retail outturn in the face of difficult high street conditions.

“We have started delivering on our strategy with the expansion of our US business, being first out of the blocks in all states that have regulated sports betting, and with the acquisition of Mr Green, which will support the build-out of our international digital business. We have also put our weight behind reducing the amount of TV gambling advertising seen by under 18s through a voluntary whistle-to-whistle advertising ban before the watershed.

“We know the next few years will require careful navigating and investment, but with a clear strategy and diverse, experienced leadership teams in place we are ready to capitalise on the opportunities available to us.”