WMH.L Share News (WMH)

(Sharecast News) - Bookmaker William Hill reported an underlying first-half loss as revenue slumped following the cancellation of sporting events due to the coronavirus pandemic and announced 119 UK shops would not reopen post Covid-19 lockdown.
Adjusted pre-tax losses came in at £14.2m, swinging from a profit of £50.8m in 2019. The results included a £81.9m impairment charge following an assessment of the impact Covid-19 on high street retail cash flows.

The gambling company posted pre-tax profits of £148.5m in the six months to June 30 compared with a loss of £38.1m a year ago thanks to a £200m sales tax refund. Revenue fell 32% to £544.4m reflecting the cancellation of sporting events across the world, closure of retail shops in the UK and sports books in the US.

William Hill was hit by the enforced shuttering of all of its betting shops when the Covid-19 lockdown was imposed in late March and the cancellation of all sport. Its shops were allowed to reopen on June 15.

It added that it would repay £24.5m in government furlough funds "in light of the robust recovery in the opening weeks of the second half, since mainstream sport resumed and our shops re-opened".

The company was last year forced to close more than 700 shops after the government imposed a £2 stake limit on fixed-odds betting terminals. It said it did not expect retail footfall to return to pre-Covid levels and the the cost of shutting down the 119 shops would be minimal as it was taking advantage of early lease breaks.

The "majority" of the employees affected would be redeployed within the estate, it added.

Hargreaves analyst Emilie Stevens said that while William Hill's online proposition lagged behind rivals it was "crucial to future growth" and noted higher gaming revenues and growth overseas.

"A lesser sporting calendar is still impacting the division, particularly in the UK, so ideally higher gaming revenues will become a more permanent fixture," she said.

"The US is the big story and William Hill is pushing to maintain its lead here. Taking control of Caesars sports book is significant, a strong brand with a big client base and providing William Hill with the licence to operate in six additional states."

"But while an exciting opportunity, the US doesn't make an impact on group earnings yet, making a UK recovery still the most important factor to William Hill this year. And that's the potential worry, with the sporting calendar still limited and retail needing an overhaul, the focus is online and online games in particular - not the group's strong point."