A third company from the gambling industry, William Hill, within the space of several days has issued an update to its customers, employees and investors, regarding the ongoing effects of the coronavirus outbreak and the measures it has undertaken to mitigate impact on the company financials.
“These are truly unprecedented times but William Hill has been around for 86 years and over that time we have gained huge experience and understanding of our customers. People want to place sports bets and they will continue to do so where possible.”Ulrik Bengtsson, CEO, William Hill
Material Covid-19 Impact
After initially GVC Holdings warned that up to £150 million of EBITDA could be wiped out by the pandemic, and Flutter Entertainment projected its revenue down with £110 million in case current measures to halt the virus spread continue further down the line, now William Hill came up with almost similar figure of earnings before interest, taxes, depreciation and amortization /EBITDA/ of between £100 – £110 million decrease for the financial 2020.
William Hill pointed out that, while too early for accurate forecast of the total effect of the Covid-19 pandemic, the impact is going to be “material”, as sports betting generated 53% of the Group’s revenue in 2019.
The EBITDA estimates the company provided had taken into account no UK and international football before the end of August, including the cancellation or postponement of the Euro 2020 UEFA European Championship, retail shops in UK remaining closed for one month, as well as both Grand National and Royal Ascot festivals being cancelled. For the US, the projections were based on Major Leagues’ games resumption around the time of the new NFL season start, in September.
However, every additional month with closed retail shops would dent the company’s EBITDA by extra £25 to £30 million, and currently horse racing and retail shops remain open.
Liquidity Provision Measures Under Way
To ensure liquidity to be able to absorb the shock from the estimated scenario, the management of the company decided to retain resources by suspending the 2019 dividend payment for its shareholders, in addition to an undrawn committed revolving credit facility of £425 million and seeking to further enhance that through its banking partners.
Regarding optimization of its variable costs, William Hill had implemented measures to ensure normal operations and invoked its business continuity plans, with most of its operations still on a business-as-usual /BAU/ level, but with staff working from home.
The company informed all parties interested that prior to the mass cancellations and suspensions of sports events, William Hill’s financial performance had been exceeding expectations, underpinned by favourable sporting results and strong retail performance, and its focus continued to remain on maintaining a ready state for full operations resumption as soon as the sports events calendar around the globe recovers.