William Hill PLC, parent company of William Hill US, has presented a financial update marked by significant contrasts in trading fortunes as a result of the ongoing coronavirus pandemic.
The trading update for the unaudited 17 weeks to April 28, 2020, was posted in tandem with a COVID-19 update and paints a clear picture of the damage inflicted on the business by the health crisis.
In its statement, the company confirmed it had split its update into two parts to aid transparency, namely weeks 1-10 (pre-Coronavirus) and weeks 11-17 (Coronavirus).
Looking specifically at the firm’s US performance during the period, pre-coronavirus trading saw 30% growth in total net revenue and a 26% increase in sportsbook wagers. Sportsbook gross win margin was 7.4%.
The second set shows that as Covid took hold on the business, total net revenue was down by 90%, with sportsbook wagers falling by 86%. Sportsbook gross win margin was 5.4%.
In a move to batten down the hatches, the firm told investors that it had acted swiftly and responsibly to protect customers and colleagues and to safeguard its future. “We have implemented decisive mitigation strategies to minimise cash outflow, reduce our cost base, and preserve our long-term growth opportunities,” it said.
Other measures to stifle further damage include waiving of revolving credit facility covenants for 2020 – to be reset for 2021 – and cash burn reduction to circa $18m per month, with liquidity in excess of $854m.
Updating investors, the firm advised it had concluded the period in a strong financial position with “significant headroom”. It said: “The outstanding amount on the 2020 bond of £203m ($248m) is scheduled for repayment in June and we have ensured that capital expenditure related to growth opportunities has been preserved, enabling us to press ahead with our plans to grow the US business and continue to develop our product.
“In collaboration with our partners, suppliers and colleagues, we have ensured the business is positioned to bounce back quickly and strongly when conditions return to normal.”
CEO Ulrik Bengtsson commented: “William Hill has overcome many challenges in its 86-year history, and I am exceptionally proud of the team and their response to the COVID-19 pandemic. We have worked hard to protect them, and in turn they have done the same for our customers.
“We reacted quickly to the cancellation of sports activities and the closure of our retail estate. We took immediate measures to save costs, reduce cash outflow and minimise non-essential expenditure by negotiating with our suppliers, cancelling pay rises and executive bonuses and suspending the dividend. We have preserved liquidity and amended the terms of our net debt covenant, leading to significant, balance sheet headroom. This will enable us to continue to invest for growth, most notably in the US, as plans there to roll out sports betting continue apace.
“Our ambition to build a digitally led, internationally diverse business of scale is proving beneficial during the disruption as our international online business has performed very strongly. We have accelerated product developments in the US in particular to ensure we are well positioned when sports activity reopens.
“Our strategy for the company remains a simple one – to win with our customers, build agile collaborative teams, and get things done – execution. We are developing products that we are proud of and that will improve William Hill’s competitiveness for the long term.”
