Australian gambling crackdown pushes William Hill to annual loss
Bookmaker William Hill has swung to an annual loss after writing down the value of its Australian business amid a local crackdown on gambling.
The company said it booked a £238.3 million goodwill impairment following "adverse tax and regulatory changes" in Australia and additional charges linked to the costs of a group-wide transformation programme.
It pushed the company to a £74.6 million loss in the year to December 26 on a statutory basis, tumbling from a profit of £181.3 million a year earlier.
That was against revenues of £1.7 billion, up 7% from £1.6 billion a year earlier.
The bookmaker recently launched a strategic review of the Australian business, which it hopes to conclude by mid-2018.
William Hill is also contending with a £6.2 million fine after an investigation by the UK's Gambling Commission revealed earlier this week that the bookmaker breached anti-money laundering and social responsibility regulations, letting customers deposit large sums of money linked to criminal offences resulting in gains of more than £1.2 million for the company.
That related to activity between November 2014 and August 2016.
Chief executive Philip Bowcock said 2018 would be a better year for the business, adding that the company was poised to benefit if a US court ruling appealing against a federal ban opens up regulated sports betting markets across American states.
"William Hill begins 2018 in a stronger position after a year of significant change for the business," he said.
"We continue to gain ground in the UK, where customers are responding to our improved Online and omnichannel offers.
"We are a leader in sports betting in the US and are well-positioned to benefit should more states start to regulate if the pending Supreme Court decision is positive."
William Hill shares were relatively unmoved by the results, down just half a percent in morning trading.
Greg Johnson, an analyst at Shore Capital Markets, cheered the bookmaker's performance.
"After a couple of years in the doldrums, William Hill produced a significantly improved performance in 2017," he said, citing a rise in operating profits and adjusted earnings per share as well as a drop in net debt.
"Current momentum appears solid, 2018 is a World Cup year and the group has (around) £15 million of the £40 million on stated cost inefficiencies to be realised.
"Potentially offsetting this is the withdrawal of credit betting in Australia, tough margin comparatives and at best flat market in UK retail."