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By Philip Stafford
Financial Times UKPublished: January 20 2010 09:51
William Hill, the bookmaker, said on Wednesday that earnings for the year would be at the top end of analysts' expectations after football results in recent months began to turn in its favour.
The company also confirmed that Charles Scott is to step down as chairman by the end of the year.
A trading update from the group confirmed that gross margin wins for the full year to December 31 "returned to the normal 17-18 per cent range".
The third quarter had seen the betting company lose a fifth of the money it makes from betting in shops as the start of the football season saw both an unusually low number of draws and the league favourites Chelsea, Manchester United and Arsenal winning.
Since then, those teams have frequently stumbled while the number of draws has returned towards historic norms. Shares in William Hill opened up 2.7 per cent at 190.6p.
Net revenue for the final quarter, which included an expanded online business, rose 6 per cent, the group said.
William Hill said it expected total net revenue for the year to December 31 to have risen 4 per cent from last year's £963.7m. Earnings before interest and tax for the period was expected to be around £250m, down from last year's £278.6m, but ahead of market forecasts in the £230m-£250m range.
The group also said its expanded online operations had delivered a strong performance in the final quarter. The final days of 2008 saw William Hill strike a deal with Playtech through which the online gaming software group bought a series of gaming assets, businesses and contracts and sold them for $250m to the bookmaker to create William Hill Online in return for a 29 per cent stake in the business.
William Hill said the beefed-up business would deliver full-year earnings before interest and tax about 35 per cent higher than a year ago, although it will be down 1 per cent on a pro forma basis.
It resulted in a minority interest for Playtech of £7.1m in the final quarter and £20.1m in the full year, it said.
The confirmation of Mr Scott's intention to step down comes after serving five years as chairman.
The 59-year old former chairman of advertising groups Saatchi & Saatchi, Cordiant Communications and Robert Walters, the recruitment agency, has been a director of the company since 1999 and helped steer the group through its flotation in 2002.
"The business is in excellent shape. I plan to step down when a suitable replacement has been found which I expect to be during the coming year," he said.
William Hill also confirmed it had appointed Investec as corporate broker alongside Citgroup with immediate effect
