William Hill expects full-year adjusted operating profit1 for 2017 to be £290m, around 11% up on 2016.
To put into context, 2016 was a very challenging year for the company. It issued several profit warnings after a series of “customer-friendly” football and horseracing results at the tail end of that year hit profits hard.
According to the national bookmaker, the improved forecast for 2017 reflects good momentum in both the UK and US markets, stronger gross win margin and the benefits of the transformation programme.
Retail and online gross win margins are ahead of expectations and significantly ahead of the same period in 2016, due to favourable football and horseracing results.
As a result, wagering growth rates slowed but overall net revenue was strong. Gaming growth rates continued to accelerate in online but slowed in retail.
Internationally, the US continued to grow at double-digit rates while Australia was affected by reduced credit betting volumes.
Australian business review
Given the credit betting ban in Australia and the likely introduction of a Point of Consumption tax in a number of states, it is clear that profitability will increasingly come under pressure and therefore the company is undertaking a strategic review of its Australia business.
Commenting on the latest trading figures, CEO Philip Bowcock, CEO, said: "We have delivered a strong result in 2017, reflecting our focus on rejuvenating oline, growing the US and building an attractive omni-channel proposition. At the same time, we are continuously improving how we enable customers to gamble responsibly.”
He added:” We are excited about the opportunities ahead in 2018 - a World Cup year - with our competitive position reasserted in the UK and with the potential for sports betting to open up in the US."
Broker forecasts on William Hill have softened slightly of late with consensus moving from sell in Q4 2017 to neutral weighting now.
The company’s share price went up 0.3% in early morning trading to 335.6.