William Hill slumps after warning over full-year profit

Shares in William Hill slumped after the bookie warned on Friday that full-year operating profit will come in at the bottom end of analysts’ forecasts as a result of additional taxes on the gambling industry and a tough comparison with last year.

In a trading update for the 13 weeks ended 29 September, the company said group net revenue fell 9% and operating profit dropped 39%.

Chief executive James Henderson said: “Q3 was always going to be a tough quarter given last year's World Cup and very strong gross win margin, allied to £23m of additional gambling duties this year.”

“Whilst good operating cost discipline has partially offset the weaker than expected results and non-core market impacts, the board now expects full-year operating profit to be around the bottom of the analyst consensus range (£290.9m to £312.1m, company-compiled).”

William Hill said the quarter also featured weaker-than-expected sporting results impacting Retail, the US and Australia, and the drag effect of the non-core market decline in Online.

Operating profit in the retail division fell 31%, while online operating profit slid 37%.

The growth in Online's core markets - the UK, Italy and Spain - remains strong for both betting and gaming, it said.

Shore Capital, which rates the stock at ‘hold’, said: “Following on from Ladbrokes more positive update yesterday, William Hill Q3 update is disappointing with the trends witnessed in Q2 continuing into the third quarter.

“We recently highlighted that the fall in the share price was leaving the group starting to look good value and still trades on c13x next year’s numbers pre the likely fall in the share price. However, getting through the drag from non-core territories is likely key for a re-rating.”

At 0832 BST, William Hill shares were down 5.7% to 325.70p.