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William Hill Maintains Consistent Revenues in 2022

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In 2022, William Hill experienced a marginal revenue drop of 0.5% to £1.24 billion, subsequent to the finalization of its non-US asset sale to 888 Holdings, which took place in July that year.

The year was marked by significant shifts, with a notable downturn in William Hill’s online sector largely balanced out by a revival in its retail business. The firm reported a year-on-year increase of 52.7% in retail revenue, bringing in £514.2 million. This uptick was attributed to the reinstatement of regular trading patterns in the post-Covid-19 landscape.

On the other hand, there was a 19.0% decrease in revenue to £509.1 million in William Hill’s UK online operations. The firm pointed to the recovery of retail and the implementation of more rigorous customer safety protocols in anticipation of the government’s impending white paper on gambling reform as contributing factors.

Further impact came from regulatory actions and the firm’s decision to leave the Dutch market, which adversely affected the company's international online operations. Revenues generated from these ventures fell 23.1%, down to £212.0 million.

Despite a general downward trend in revenue, the company reported a rise in its adjusted earnings before interest, taxes, depreciation, or amortization (EBITDA), primarily driven by the revival in the retail sector.

For 2022, the firm recorded a total operating loss of £31 million. Nonetheless, the group announced a profit of £168.4 million, largely attributable to a one-time foreign exchange gain.

Attempts to Reduce Overhead

In 2022, William Hill made a committed drive to reduce expenses. While the company’s cost of sales remained more or less unchanged at £383.7 million, reductions were noted in other outlays.

Marketing expenses dropped by 30.5% to £151.1 million. Additionally, the company trimmed its operating expenses by another 6.7%, down to £583.5 million.

However, the financial implications of the deal, coupled with increased legal costs for 2022, resulted in a surge in extraordinary costs from £99.4 million to £148.7 million.

In July 2022, 888 Holdings completed its acquisition of William Hill’s non-US business. Following the finalization of the £1.95 billion deal, 888 has been working towards consolidating the two companies into one unified entity.

It’s reported that there are intentions to transition the business onto a single technology platform for content delivery. William Hill announced that Satty Bhens, the chief technology and product officer, is spearheading this project.

Challenges for 888

After sealing the deal, increased interest rates made debt servicing more challenging for 888 Holdings in relation to the acquisition.

Consequently, in December 2022, the company revealed it would be reaching out to the debt capital markets to fund €200 million of the acquisition debt.

Further financial complications were followed by regulatory troubles in January when the company froze its Middle Eastern VIP account during an investigation into failures regarding anti-money laundering procedures. This incident led to the resignation of 888 CEO Itai Pazner.

As a fallout, 888’s share price plummeted nearly 70% from July 2022, reaching a low of £52 per share in late March 2023.

However, a revival has been observed in 888 shares, largely fuelled by the recent announcement that several former executives from GVC – including ex-CEO Kenny Alexander – would be making investments in the company through their FS Group entity.

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