Shares of William Hill Plc (WMH.L) climbed about 8 percent Friday morning, after the company posted a higher profit for full year 2012. Further, the company said it has proposed to acquire the outstanding 29 percent stake in William Hill Online from Playtech Ltd. (PTEC.L) for 424 million pounds, by exercising its call option.
The sports betting and gaming services provider's annual revenues grew 12 percent, helped by outstanding performance from William Hill Online. Results for the year were also benefited by lower exceptional costs. In addition, the company's board has proposed a higher final dividend.
Ralph Topping, chief executive of the company said, "William Hill Online has consistently delivered strong net revenue growth since it was formed in December 2008. Having been advised of the valuation of Playtech's 29% interest, the Board has concluded that it is in the best interests of our shareholders to exercise our call option to assume full ownership of this attractive, high growth, high performing business."
The board expects the proposed acquisition to be earnings accretive on a per share basis in the current financial year as compared to the rights issue adjusted alternative.
William Hill intends to raise about 375 million pounds, net of expenses, through a fully underwritten rights issue of 2 new ordinary shares for every 9 existing ordinary shares at 245 pence per share which, together with around 50 million pounds from part of 2012 bridge credit facility, will be used to finance the proposed acquisition.
The company noted that William Hill Online has continued to deliver outstanding growth and is now the UK's leading online gambling company with an estimated 15 percent market share.
It also said that the 460 million pounds proposed acquisition of Sportingbet's Australian and Spanish online businesses is on track for completion on March 19, 2013.
For the 53 weeks ended January 1, 2013, the company posted profit before tax of 277.7 million pounds, higher than 187.4 million pounds in the 52 weeks ended December 27, 2011. Excluding exceptional items, pre-tax profit increased to 292.7 million pounds from 239.4 million pounds a year ago.
The Group recorded 15 million pounds of pre-tax exceptional costs in 2012, down from 52 million pounds last year.
On a per share basis, earnings grew to 26.6 pence from 16.3 pence per share a year earlier.
Revenues rose 12 percent to 1.28 billion pounds from 1.14 billion pounds last year. In a 52-week basis, revenues were up 10 percent. Retail net revenue increased 6 percent, and online net revenue climbed 27 percent from last year. Meanwhile, Telephone net revenue dropped 12 percent.
Amounts wagered grew to 18.88 billion pounds from 17.91 billion pounds in the preceding year.
The board has also proposed a final dividend of 7.8 pence, up 16 percent from last year, to share holders of record on March 15, 2013, payable on June 7.
WMH.L is currently trading at 435.20 pence, up 30.50 pence or 7.54 percent, on a volume of 6.32 million shares on the LSE.
For comments and feedback: editorial@rttnews.com