William Hill Plc Bets Big On Online Growth

William Hill plc (LON:WMH) reports rising profits after refocusing its business for online growth.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

William Hill (LSE: WMH) has seen its shares surge from £2 to nearly £5 over the last 18 months, as investors have warmed to its new online focus. The company has also joined the FTSE 100.

The last six months have been particularly busy, with the betting company spending nearly £900m on buying out the minority stake in its own online business, and acquiring Sportingbet‘s Australian operations. Funds of £750m were raised to finance this move, split equally between a rights issue and a convertible bond issue.

As well as the boost from these acquisitions, underlying revenue growth has also been impressive in the last six months. In its interim results, released earlier today, amounts wagered were shown to have increased by 27.5% on last year, and revenue rose by nearly 20%.

William Hill’s traditional retail operations still managed 11% revenue growth, but it is online, and particularly mobile sports betting, that appears to be the sweet spot at the moment.  According to a report published by Onavo, William Hill’s is the most popular sports betting app, actively used by 38% of iPhone-owning sports gamblers. Furthermore, in two years from now,  William Hill hopes to generate 40% of its gaming net revenue from mobile devices.

Moving to the bottom line, and statutory profits were level with last year. However, there are a number of acquisition-related items complicating matters here.  On an adjusted earnings per share basis, the increase on last year was 16%, which led the company to raise its dividend by 16% as well, despite a net debt more than doubling to £820m.

Looking ahead, William Hill is excited by the prospects for its Australian business, and the increased control it now has over its online operations. However, the company  didn’t give an specific commentary on how it saw the remainder of this year panning out.

The shares fell 5% to 470p following the release of these results, which values the company  at £4.1bn.

If growth shares like this tickle your fancy, then make sure you don’t miss this free report highlighting The Motley Fool’s Top Growth Share for 2013. This business has successfully reinvented its business for the digital age, and looks set for a very bright future.

Download this free report right here.

> Stuart does not own any share mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »