William Hill put on a brave face on its full-year performance this morning with the firm's share price rising nearly one per cent after the bookmaker delivered figures that were in line its revised guidance.
Net revenue was up one per cent to £1.6bn but adjusted operating profits dived 10 per cent to £262m.
Earnings per share were similarly down 10 per cent at 18.9p but the group maintained its 12.5 per share dividend.
Bookmakers are usually good at turning profits into cash, and William Hill generated £266m of reddies during the year.
Why it’s interesting
The bookie had a rollercoaster 2016: after a devastating run of form at the Cheltenham festival in March, it rejected two takeover attempts. First a £3.6bn offer by Rank Group and 888 Holdings and then a £4.5bn approach by Canadian firm Amaya.
In the middle of it all, the firm removed its chief executive James Henderson as online growth flatlined.
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With chief beancounter Philip Bowcock babysitting the role, in January, it warned its full-year numbers would miss targets by around £20m, with unfavourable football results adding to further losses at the gee-gees.
Although the group has been without a permanent leader for eight months, the firm said this morning it was zeroing in on the person it wanted and was entering the final stages with an announcement expected in the next few weeks.
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In its statement the bookie said its “balance sheet remains healthy with net debt for covenant purposes”. But the net debt to Ebitda multiple – effectively the number of years of earnings the firm would need to generate to pay down its lending – jumped from 1.3x to 1.8x.
As part of any lending agreement with their banks, companies must keep their Ebitda multiple under a given cap. In this statement William Hill is stressing to the outside world that it’s operating within facility agreements.
However – and as many companies have a tendency to do when they’re sitting on better news – the firm released flash results for the seven weeks to 14 February. The figures indicated a good start to the year, with the group’s UK sports book up 10 per cent and UK gaming revenue spiking eight per cent.
What the company said
Interim chief executive Philip Bowcock said:
2016 was a challenging year for William Hill, but one in which we made considerable operational progress, leaving us well-placed to drive the business forward in 2017.
There are now encouraging signs in all our divisions, in particular online’s UK business, which is now delivering sustained growth.
“We expect our transformation programme to continue delivering important efficiency savings that we can reinvest to deliver an even better customer experience and faster growth.
“We have a clear strategy to take the business forward and grow market share in the UK, while expanding our revenues internationally.”