William Hill have recently announced their operating profit of £274 million, which is only £2 million less than what they made at the same time last year. With all the recent announcements in the news stating that many companies are struggling to survive, why is William Hill doing so well?
The online betting market has continued to boom, over the last year, as it has grown by 28 per cent. The mobile market has at the same time grew by 500 per cent, as mobile applications enable people to bet on the move, whilst they are watch their favourite football team live at their home stadium. Overall, these markets contribute £106 million to William Hill’s overall operating profit.
However, it is a rare sight in today’s market, when retail commercial properties are also contributing significantly to a company’s overall profit. William Hill’s retail shops have grown by 11 per cent, while over-the-counter (OTC) sales and gaming machines have seen an increase of 7.0 per cent in year-on-year sale. The gaming machines are huge revenue for the retail market as they, on average, each machines generates £901 gross profit per week.
Speaking of the company’s performance, Ralph Topping, Chief Executive, expressed: “This is a very positive performance. Going into 2011, we were – like many businesses with a strong presence in the UK – predicted to face a challenging consumer backdrop but our overall performance shows we’ve seen the benefit of being a predominantly low ticket leisure activity.”
“November was certainly a very good month for our football clients betting on small stake, high return multiple bets, which comprise the largest part of our Retail football business but football betting in 2011 overall continued to show wagering growth in both Retail and Online,” Mr Topping added.
However, telephone betting market is not performing so well, which reported an annual loss of £4 million. Although William Hill off-shored the majority of this market to Gibraltar to reduce taxation costs, the business has still struggled. High-staking clients who are staking lower wages, as the recession hinders on everyone, has been blamed for the performance.
However, the future for William Hill is set to develop, as Mr Topping stated: “I believe there are more opportunities to grow in the UK with investment in marketing and in new technology and innovation taking place in all our channels. There are also good opportunities for the business beyond our traditional roots as more governments open up to regulated gambling. We will, therefore, continue to invest in taking our brand and our capabilities beyond the UK in 2012 and future years.”
