Bookmaker William Hill Plc. (WMH.L) Friday reported higher operating profit and net revenue for the 13 weeks ended April 2, with a strong performance in the online business. The stock is adding nearly 5 percent in pre-market activity.
Earlier this week, peer Ladbrokes Plc (LAD.L, LDBKY.PK) reported lower operating profit in its first quarter on higher costs, even as revenues increased from last year. The company also said it expects group operating profit for 2013 to be at the bottom of the existing market range.
In an interim management statement, William Hill said group net revenue increased 15 percent, flattered by the transition from Value Added Tax and Amusement Machine Licence Duty to Machine Games Duty or MGD on February 1. Retail net revenue also benefitted similarly.
Adjusting the prior year from the date of introduction of MGD to reflect the current tax regime, the sports betting and gaming services provider's group net revenue grew 11 percent.
Operating profit grew 8 percent, helped by good sporting results across all channels. Profit progression was also helped by good cost control.
William Hill Online delivered 21 percent growth in net revenue and 13 percent increase in operating profit. Sportsbook net revenue climbed 47 percent. Mobile Sportsbook amounts wagered surged 145 percent and accounted for 35 percent of the total Sportsbook amounts wagered in the period.
Gaming net revenue rose 2 percent, with Casino growth of 4 percent, partially offset by declines in Bingo and Poker. Mobile gaming net revenue soared 298 percent, following the launch of a series of gaming mobile websites and apps in 2012. The prior year results included the contribution of some markets that were closed to customers during the course of 2012.
Ralph Topping, Chief Executive of William Hill, said, ''"Mobile remains a high priority and is now a major contributor to Sportsbook's continued growth. We have beaten two of our three Sportsbook and mobile targets ahead of schedule and are focusing on making mobile more than 40% of Sportsbook stakes before the end of this year.''
After growing its UK online market share from 10 percent to 15 percent in the last four years, the company now aims to increase its share. Topping added that the firm is making significant investments in marketing, technology and people to achieve that.
Retail net revenue advanced 8 percent, with Over The Counter net revenue up 3 percent and gaming machines net revenue up 15 percent on a reported basis. Operating profit fell 3 percent.
Adjusting the prior year from the date of introduction of MGD to reflect the current tax regime, retail net revenue grew 2 percent and gaming machines net revenue grew 1 percent. Gross win per machine per week was 904 pounds compared to 918 pounds last year. The company noted that Cheltenham results were not so good this year.
During the period, the firm completed the acquisition of Sportingbet Plc's Australian business. Operating performance of the business had an immaterial impact on performance during the period.
The firm recorded pre-tax exceptional costs of around 10 million pounds relating to the Sportingbet acquisition.
The company continues to expect 16 million pounds of exceptional costs relating to the deal. Another 3 million pounds relating to the acquisition of the William Hill Online minority interest will be incurred and expensed directly to reserves.
The stock is gaining 4.7 percent in early morning trading at 409 pence.
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