William Hill reports flat net revenue of $1.56B in 2022, driven by retail segment

UK bookmaker William Hill released its annual financial report for 2022. For the period ended December 27, 2022, the company generated net revenue of £1.23 billion ($1.56 billion), thus experiencing a slight 0.5% decline from the £1.24 billion ($1.57 billion) registered in 2021.

One of the takeaways from the report was the resurgence of the company’s retail segment, which witnessed an impressive 52.7% year-on-year increase in revenue, reaching £514.2 million ($653 million). This growth was primarily attributed to the return to normal trading levels following the aftermath of the Covid-19 pandemic, as customers flocked back to betting shops.

On the other hand, William Hill’s UK online business faced challenges, experiencing a 19% decline in revenue to £509.1 million ($646.6 million) from £628.6 million ($798.3 million) registered in 2021. This dip was a result of customers returning to retail shops and enhanced customer safety checks implemented in anticipation of the gambling reform white paper. 

Meanwhile, the international online business also took a hit, with revenue from these activities falling by 23.1% to £212 million ($269.2 million), as compared to £276 million ($350.5 million) in 2021. The decline was primarily attributed to regulatory measures and the company’s strategic decision to exit the Dutch market.

Despite the overall decline in revenue, the company reported  £214.8 million ($272.8 million) in Adjusted EBITDA, a 32% rise from £161.7 million ($205.4 million) in 2021. Across the divisions, Retail accounted for £95.7 million ($121.5 million) (£0.1 million in 2021), UK Online added £112.2 million ($142.5 million) (£153.5 million in 2021), and International contributed £33.1 million ($42 million) (£34.1 million in 2021). 

The company reported a total operating loss of £31 million ($39.4 million) for 2022. However, the group still managed to announce a profit of £168.4 million ($183.3 million), largely attributed to a significant one-off foreign exchange gain.

In an effort to cut costs, William Hill made significant reductions in marketing expenses, which fell by 30.5% to £151.1 million ($164.5 million). Additionally, the company managed to decrease its operating expenses by 6.7% to £583.5 million ($635.3 million).

However, the costs of the sale of William Hill’s non-US assets to 888 Holdings, in addition to the increase in legal costs for 2022, led to a rise in exceptional costs from £99.4 million ($126.2 million) to £148.7 million ($188.8 million).

In July 2022, 888 Holdings completed its purchase of William Hill’s non-US business. Following the completion of the £1.95 billion ($2.12 billion) transaction, 888 has attempted to integrate the two businesses into a single entity.

William Hill says there are now plans to migrate the business to a single technology platform for the delivery of the group’s content. According to the company, Satty Bhens, Chief Technology and Product Officer, is responsible for this work.  

Following the completion of the deal, rising interest rates made it harder for 888 to service the debt it took on in order to get the acquisition over the line. As such, the company announced in December 2022 it would be tapping into the debt capital markets to finance €200 million ($217 million) of acquisition debt.

These financial difficulties were followed in January by regulatory issues, leading to the suspension of 888’s Middle Eastern VIP account. This action was taken as the company faced an investigation regarding its non-compliance with anti-money laundering procedures. As a consequence of these events, Itai Pazner, the CEO of 888, decided to resign from his position.

As a result, 888’s share price fell nearly 70% from July 2022 to £52 ($56.57) per share in late March 2023. However, 888 shares have since then experienced a resurgence, largely driven by last month’s news that a number of former GVC executives, including former CEO Kenny Alexander, would be investing in the business through their FS Group vehicle.

Click here to access the full annual financial report for 2022.