William Hill will permanently close 119 betting shops due a drop in retail footfall, the gambling firm said this morning as it revealed that profit plunged in the first half of the year.
William Hill posted an adjusted loss after tax of £11.1m, after reporting an £81.9m impairment charge following an assessment of the impact Covid-19 has had on high street retail cash flows.
Exceptional items also included net income after third party costs, interest and tax of £201.6m relating to the VAT refund for charges incurred on retail gaming machines income between 2002 and 2013.
Profit after tax before exceptional items was £115.6m.
Net income dropped 32 per cent from £811.7m to £554.4m during the first six months of the year due to the closure of stores during the lockdown.
William Hill reported an adjusted loss per share of 1.2p, compared to earnings per share of 5.3p last year.
Why it’s interesting
Following a strong first quarter, driven by its international online business, the coronavirus pandemic hit in March and led to the closure of William Hill’s UK and US stores.
The cancellation or postponement of sporting events also saw betting levels fall.
Since the sports calendar has resumed, wagering levels have begun to return to pre-pandemic levels, William Hill said.
However the company said it did not anticipate retail footfall bouncing back to levels seen before the crisis, prompting it to close 119 stores following early lease breaks.
The majority of affected employees will be redeployed to other stores, William Hill said.
Online gaming levels increased as sports betting activity fell, prompting William Hill to step up customer engagement and protection measures.
What William Hill said
Chief executive Ulrik Bengtsson said “We have clear proof that our strategy of focusing on Customer, Team and Execution is working.
“Our trading was strong before COVID-19, we controlled costs effectively during lockdown and we have recovered well post-lockdown with good performances in our online businesses throughout the first half.
“The furlough scheme provided welcome and timely support and meant we could protect the jobs of our 7,000 UK retail colleagues.
“Therefore, given the strength of our recovery post-lockdown, we have decided to repay the furlough funds.
“We have continued to develop both our technology platform and our product offerings, with more significant enhancements to come in the second half. The balance sheet has been strengthened by the prompt actions we took to keep cash in the business, the successful placing, and the recognition of the VAT refund.
“As a result, we have the financial strength to confidently pursue our growth agenda, taking advantage of our market leading position in sports betting in the US, and the terrific opportunity that Eldorado’s merger with Caesars brings.”