William Hill: VAT Refund Papered the Cracks from COVID-19 Impact

UK-based gaming giant William Hill announced its interim 2020 financial results, posting net revenue of £554.4 million and profit before interest and tax of £148.5 million. The statutory profit figure includes a VAT refund after tax of £201.6 million and an £81.9 million non-cash intangible impairment of the UK Retail estate.

H1 2020 Net Revenue Down

William Hill reported its net revenue for the first half of 2020 fell 32% compared to the same period in 2019, driven down mainly by the disruption to sporting events and temporary closure of retail activities, and slightly offset by some favourable sporting results.

The progressive resumption of sports events supported by international growth and successful product launches by the operator led to an increase of online net revenue by 1%.

““I am delighted with William Hill’s performance in these extraordinary times. Our team has been remarkable, supporting each other and our customers throughout the pandemic, and I would like to thank them for their continuing efforts.”

Ulrik Bengtsson, CEO, William Hill

William Hill outlined the adjusted operating profit of £11.8 million was ahead of expectations as the company undertook timely actions to control costs and deliver new online content. The statutory operating profit reported for the first 6 months of the year is achieved by adding the windfall from the HMRC, after the industry in the UK won the legal battle related to incorrectly charged VAT on fixed-odds betting terminals (FOBTs), covering the financial impact from the virus outbreak.

“We have continued to develop both our technology platform and our product offerings, with more significant enhancements to come in the second half. The balance sheet has been strengthened by the prompt actions we took to keep cash in the business, the successful placing, and the recognition of the VAT refund.”

Ulrik Bengtsson, CEO, William Hill

William Hill reported the majority of its Real estate re-opened after 13 weeks of hiatus, and despite reduced staking levels, strong gross win margins mainly due to the unseasonal contribution from football, led to flat like-for-like net revenue for the last 2 weeks in June.

“Our trading was strong before COVID-19, we controlled costs effectively during lockdown and we have recovered well post-lockdown with good performances in our online businesses throughout the first half. The furlough scheme provided welcome and timely support and meant we could protect the jobs of our 7,000 UK retail colleagues. Therefore, given the strength of our recovery post-lockdown, we have decided to repay the furlough funds.”

Ulrik Bengtsson, CEO, William Hill

Net debt, £536 million by the end of 2019, was brought down to £340 million, after William Hill managed to place 19.99% of its newly issued share capital, decreasing the net debt to EBITDA ratio from 2.4x to 2.1x.

“As a result, we have the financial strength to confidently pursue our growth agenda, taking advantage of our market leading position in sports betting in the US, and the terrific opportunity that Eldorado’s merger with Caesars brings.”

Ulrik Bengtsson, CEO, William Hill

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