Shares in William Hill (LON:WMH) have taken a hit after the FTSE 250 group posted a drop in first-half profits and announced that it had acquired a stake in lottery services provider NeoGames. As of 09:55 BST, William Hill’s share price had lost 5.99 percent to 386.30p, underperforming the mid-cap FTSE 250 index which has slipped marginally into negative territory. The shares have added nearly 16 percent over the past year.
William Hill announced in a statement today that its profit before tax had fallen 35 percent year-on-year to £78.7 million in the 26 weeks to the end of June. Net revenue came in flat at £808.1 million, while the company’s operating profit fell 12 percent to £155.7 million during the reported period.
Despite the downbeat results, William Hill’s chief executive James Henderson commented in the statement that the company had “delivered a good operational performance in the past six months during a period of significant regulatory and taxation change for the industry”. He, however, cautioned that the London-listed bookmaker expected the £50-limit on gaming machines to further weigh on its UK retail business in the second half.
Canaccord Genuity analyst Simon Davies told Reuters that the further impact from the £50 journey referred to by the company was clearly constraining activity amongst higher-staking customers in their machines business in retail. The analyst added that he expected some reduction in the full-year consensus forecast.
William Hill separately announced today that it had acquired a 29.4-percent stake in online lottery software and services provider NeoGames for a total cash consideration of $25 million (£16 million), with an option to acquire the remaining 70.6 percent after three or five years. William Hill’s Henderson commented in the statement that the emerging online lottery market was “an exciting new opportunity in the gambling sector”.