After issuing a profit warning in March, William Hill's revenues have indeed fallen off the back of a poor Cheltenham festival, the company said today in a trading statement.
William Hill's share price fell more than six per cent today on the news.
Group net revenues at the bookie were down three per cent in the first quarter, while online net revenues declined by 11 per cent. Within online, the group's gaming revenues fell four per cent, while its Sportsbook was down by 17 per cent.
Earnings guidance remains the same with operating profit expected to come in at £260-280m for the full year.
Sports revenues were driven lower by this year's Cheltenham festival and punter-friendly European football results.
Gross win margins benefited from English Premier League results, despite a £3m payout after Leicester City's win at the beginning of May.
There was a further improvement in retail gaming machine performance and continuing positive trends from William Hill's brand in Australia, which grew by 22 per cent and new accounts rose 46 per cent, and the company's US arm, where amounts wagered were up 31 per cent and net revenue grew 38 per cent. William Hill's US presence benefited from a positive Super Bowl result in February.
The bookmaker's share price had fallen by more than six per cent by early afternoon trading.
Why it's interesting
William Hill also said today that Crispin Nieboer, who was brought in as interim online managing director in January, has been made the company's permanent head of online. He has set three goals for the firm's online business: improving the product offering, focusing on customer acquisition and improving player yields, and growing the online business internationally.
William Hill and Ladbrokes both predicted they would be hit hard by the first full-year application of the point-of-consumption tax, which charges 15 per cent on online gambling profits, and crackdowns on in-store fixed odds betting terminals (FOBTs) in their 2015 full-year results.
However, William Hill has also been hit by self-exclusion regulations, which have allowed customers to opt-out of playing online games when they have made a loss.
What William Hill said
James Henderson, CEO, commented:
It has been a tough start to the year in Online, which is being impacted by both regulatory change and a gross win margin below normalised levels for the period due to a disappointing Cheltenham festival and unfavourable European football results. Trends in recent weeks remain in line with the guidance we gave in March.
In Retail, it is pleasing to see gaming growth improve again and we are on track with the roll-out of our self-service betting terminal before the EUROs, allowing us to bring the best of Online to our shops ahead of a big summer of sport. Australia is showing benefits of our improved offering and strengthening brand in the market, and the US continues to be strong.
What others said
"Leicester City has done the bookies a favour this year, which is a good job for the sector given the number of favourites which romped home at Cheltenham," Steve Clayton, head of equity research at Hargreaves Lansdown, said.
"The challenge for William Hill is to reduce reliance on problem gamblers and recruit more "recreational" clients. These are punters who don't take it seriously enough to really know what they are playing at, and can therefore be relied upon to bet money at poor odds, in return for a bit of a thrill. Recent trading suggests there is still some way to go on this front," Clayton added.