* First-half operating profit falls 16 pct
* Poor online performance blamed
* Says still waiting to hear details of 888-Rank approach (Adds CEO comments, shares)
By Paul Sandle
LONDON, Aug 5 (Reuters) - William Hill, the Britishbookmaker that last month sacked its chief executive and hasreceived a takeover approach, said it needed to do more work tofix its online business after operating profit fell 16 percentin the first half of the year.
The bookmaker, set to lose its market leadership in thelatest round of industry consolidation, received an approachfrom smaller online rival 888 Group and casino and bingohall operator Rank two weeks ago.
William Hill has been struggling to keep up with rivals inonline gambling and the board last month lost patience withchief executive James Henderson after only two years in the topjob.
Philip Bowcock, who has stepped up from finance chief tointerim CEO, said he had no update on a possible three-way dealwith 888-Rank, but added that the board would obviously considerany proposal received.
"We don't necessarily see the strategic logic or fit, and wewait to hear from them," he said.
Bowcock called the first half challenging but added thecompany was committed to fixing its problems.
"Clearly online is where we have to concentrate most,"Bowcock said after online operating profit fell by a third inthe period.
Online gambling via smartphones and tablets has helped todrive growth for betting companies but it is a crowded fieldwith traditional bookmakers jostling for market share withyounger companies.
"We are in the pack, and what we need to do now, is makesure we get ahead of the pack," Bowcock said, adding that buyingsoftware maker Grand Parade earlier this week showed how seriousit was in tackling the problem.
First-half operating profit fell to 131 million pounds ($172million) on revenue which was 1 percent higher at 814 millionpounds for the six months to end-June.
The company said it still expected to meet its guidance todeliver operating profit of 260-280 million pounds for year.
Shares in the group were trading 0.8 percent lower at 310.5pence at 1010 GMT.
Stockbroker Goodbody said William Hill was losing marketshare in both online and its retail business.
Rival Ladbrokes, which will overtake William Hill in number of betting shops when it merges with Coral later thisyear, showed it was outpacing William Hill in growth online andin over-the-counter bets when it reported on Thursday. ($1 = 0.7608 pounds) (Editing by Keith Weir)
