William Hill Returns £25 Million Furlough Cash to UK Government as Local Lockdowns Loom
Posted on: October 21, 2020, 03:43h.
Last updated on: October 21, 2020, 04:31h.
Despite new localized lockdowns in the UK threatening to dent revenues at its land-based retail outlets, William Hill said Wednesday that it had enjoyed a “good performance” since the gradual resumption of the elite sporting calendar.
As such, the company would be returning £24.5million ($32.2 million) of taxpayers’ money to the British government, funds that had been intended to cover the wages of furloughed workers, it announced at an earnings update.
William Hill is currently the subject of a $3.7 billion takeover by Caesars Entertainment. But the US casino giant has little interest in its operations outside the US, which suggests a breakup of the business in the future.
In the UK, operations are currently affected by a resurgent coronavirus, which has led the government to impose stricter prevention measures in regional hotspots. The company said some ten percent of its retail outlets were closed because they were in areas where “Tier 3,” England’s “very high” level of alert, applied.
Some 7. 3 million residents of Liverpool, Manchester, and South Yorkshire are currently living in Tier-3 zones.
But WH said it had reopened 1,414 betting outlets since lockdown eased, and footfall had begun to return to pre-pandemic levels.
“We are very pleased with the trading performance of the Group, which has been borne out of the commitment, resilience, and hard work of our teams across the business. I could not be prouder of them,” chief executive Ulrik Bengtsson said.
We have moved the company forward with our relentless focus on our customers, enhancing the competitiveness of our product, and maintaining player safety as one of our highest priorities.”
Net revenue was down 9 percent across all operations for Q3, year on year. But that was an improvement on the 32 percent decline the company booked for the first half of the year.
Digital operations – where William Hill has traditionally fallen behind its domestic competitors – were promising, with revenues up 4 percent in the UK and 6 percent internationally.
‘Ball and Chain’
But the US was the biggest growth market, where total net revenue was up 10 percent, helping to cushion the blow at home.
“William Hill’s latest trading update could be one of its last as a listed company if Caesars succeeds with its takeover offer,” said Russ Mould, investment director at AJ Bell, referring to the likelihood the US casino giant will sell the UK and European businesses.
It’s easy to see why Caesars wants to do a deal. William Hill would turbocharge its ability to grab a larger share of the US gaming industry, which some analysts believe could be worth as much as $35 billion in time,” Mould told ThisIsMoney.
“William Hill is certainly making good progress in the US, adding more US states to now have a presence in 14 territories,” he added. “While the UK operations are starting to recover, strategically they are like a ball and chain around its neck, with ever-tightening regulation putting pressure on earnings.”