February 28, 2008

Hills to focus on internet as it gears up for transitional year

Ralph Topping, newly-appointed chief executive of William Hill, has told eGaming Review that the company will spend much of 2008 focusing on improving and developing its internet offering.

Speaking after the company released its full-year results this morning, Topping said: “I am pleased with the levels of gross win in retail, especially after a World Cup year, with machines revenue up 15% and I plan to reinforce our retail base and develop our internet offering in 2008. Despite some serious issues with which we have to deal, there are also major opportunities.”

He added that Hills will concentrate on its key strengths: knowledge of bookmaking and gaming and its experience as an operator. Speaking about the recent performance of Hills’ online division, Topping said: “Frankly, it’s been disappointing. We will focus on implementing the Orbis sports betting platform between now and the end of November and launch more gaming products in the second quarter, including a live casino to bridge the gap between the virtual and real gaming environments.”

Speaking of NextGen, William Hill’s in-house system that will be replaced by the Orbis platform, Topping said: “We are at our best when we concentrate on key strengths, we are not going be the industry's leading software firm. By focusing too many resources on that we lost ground to our competitors. The sportsbook operates on legacy technology and this affected us badly: especially on in-running. Punters want a wide range of markets and it’s vital for in-running. I’m very passionate about turning this side of the business around as I was there at the beginning.”

As revealed by eGaming Review in January, the company agreed terms of purchase with sports betting software firm Orbis, which it said would allow it to compete on a level playing field with the competition.

Topping also denied any rumour that William Hill was interested in acquiring Irish bookmaker Paddy Power, and said of his appointment as the company’s new chief executive: “I joined the board in April 2007 and expected it to take its time (over the new appointment). They have got to know me in that time so you could say I wasn’t surprised when they asked me.”

Hills’ gross win rose 6% to £983.7m, compared with £931.3m in 2006, operating profit was down 2% to £286.7m, compared with £292.2m in 2006, pre-tax profits before exceptional items was £223.4m for the 53 week period to 1 January 2008. The interactive side of the business had a disappointing year, with gross win falling by £10.7m to £119.8m and operating profits falling by £10.6m to £50.9m on 2006, mainly due to the company’s technology being unable to handle in-running betting. As a result, William Hill decided to terminate the implementation of the NextGen programme, which led to an exceptional non-cash impairment charge of £20.9m.

Gaming revenues largely stabilised throughout the year after UIGEA, driven by the launch of new arcade and skill games and online bingo, the latter in particular exceeding the company’s expectations. Gross win for the telephone betting channel fell £4.5m to £53m due to a drop in business from the company’s large staking clients, operating profit was virtually stagnant at £16.1m, compared with £16.7m in 2006.

The company highlighted its international activities in Spain and Italy in partnership with Codere. The two companies’ joint brand for Spain will be Victoria Apuestas, for which it expects to receive an operational licence for the Madrid region imminently, with another 34 outlets due to be obtained in the region by the end of 2008. In Italy, an Italian website went live this month and the two firms have received more than 50 concessions to operate sports betting outlets and expect most of them to be operational before September 2008.