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UPDATE 2-William Hill bets on online and U.S. market as first-half profits dip

Wed, 5th Aug 2020 07:56

* Adj. operating profit of 11.8 mln stg was ahead of
expectations

* To combine its UK online and retail businesses in online
push

* U.S. business performs well with sports events resuming

* Shares rise as much as 7%
(Writes through, adds CEO, analyst comment, shares)

By Pushkala Aripaka

Aug 5 (Reuters) - Bookmaker William Hill reported
lower first-half profit on Wednesday and said it was shutting
119 more shops as it shifts towards online betting and expansion
in the U.S. market.

The London-listed company, one of the big names in the
British gambling business, said overall revenue slumped by 32%
as coronavirus lockdowns shuttered its high street stores.

However, adjusted operating profit of 11.8 million pounds
($15.4 million) was better than expected as it cut costs and
international online grew 17%. The company also said its
dividend will remain suspended.

Shares rose as much as 7% to 125.4 pence in early trading
after the company also pointed to a good start to the second
half and said it would combine its UK online and retail
businesses.

William Hill has been looking to offset the impact of
tightening regulations in its home market and in July last year
announced 700 store closures.

It said the closures announced on Wednesday would cost
nothing and staff would be moved to other roles.

U.S. states have been legalising sports betting and William
Hill's momentum is likely to be boosted by the merger of casino
operators Eldorado and Caesar's, it said.

"We made excellent progress in our U.S. business," Chief
Executive Ulrik Bengtsson said on a media call, while also
acknowledging challenges from the pandemic.

"It's hard to deny that we are already in the second wave in
the U.S. to some extent ... as long as major sport events are
back, we are quite confident of how this business is going to
develop," Bengtsson said.

Sporting events, such as horse-racing, Britain's Premier
League and Germany's Bundesliga and Major League Baseball,
resumed in recent weeks, aiding bookmakers. William Hill has
three Premier League betting partnerships - with Chelsea,
Everton and Tottenham.

Jefferies analysts, who have a "buy" rating on the stock,
said William Hill's current valuation "barely recognises an
appropriate valuation, let alone reflecting the opportunity in
the U.S.".

($1 = 0.7646 pounds)
(Reporting by Pushkala Aripaka in Bengaluru; editing by Patrick
Graham and Barbara Lewis)

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