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William Hill results

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daveh
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William Hill results

#204727

Postby daveh » March 1st, 2019, 9:17 am

can be found here:
www.investegate.co.uk/article.aspx?id=2 ... 5203R&fe=1

Financial results

· Group net revenue up 2% to £1,621.3m

· Adjusted operating profit from existing operations1 down 3% to £266.8m, in line with expectations

· Exceptional charge and adjustments of £922.1m including, as previously reported, £882.8m non-cash impairment to Retail following Triennial Review decision leading to statutory loss before tax of £721.9m

· Operating cash flow before movements in working capital up 9% to £275.0m

· Balance sheet remains strong with net debt for covenant purposes6 of £308.1m, 1.0x EBITDA at period-end

· Full-year dividend of 12.0p per share, in line with policy to pay out approximately 50% of underlying earnings, based on adjusted EPS before US Expansion costs in 2018



Good progress against strategic priorities

· Driving digital growth in the UK and internationally

o Good underlying Online performance: actives +25%, underlying net revenue +6% and operating profit up 11% before c£17m impact of enhanced customer due diligence measures

o Acquisition of Mr Green for c£242m completed in January 2019, building international base and capabilities

· Growing a business of scale in the US

o US Existing business delivering continued strong momentum with 42% net revenue and 91% adjusted operating profit growth (in local currency)

o US Expansion business now live in six states, access secured to 17 states in total

o 34% market share by revenue across all seven regulated states in these early stages

· Remodelling Retail


o Resilient performance with net revenue down 2% with challenging trading backdrop on the UK high street

o Ready for implementation of new £2 stake limit on B2 gaming products in April 2019 and reshaping of Retail estate

· Nobody harmed by gambling

o Voluntary whistle-to-whistle TV advertising ban agreed during pre-watershed UK live sport





The proposed final dividend of 7.7p will, subject to shareholder approval, be paid on 6 June 2019 to all shareholders on the register on 26 April 2019. In line with the requirements of IAS 10 - 'Events after the Reporting Period', this dividend has not been recognised within these results.


Which is a cut on last year I have them down as paying 4.26 and 7.7 this year* compared with 8.94 and 4.26p last year.

* the report says 4.3p I don't know whether that is a mistake in my and my brokers records or if they are rounding the dividend up if the latter (which seems likely) that is a little odd on WMH's part.

daveh
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Re: William Hill results

#204732

Postby daveh » March 1st, 2019, 9:24 am

They say a full year dividend of 12p and my records and my brokers show 4.26p interim which makes a final if 7.74p not 7.7p as stated in the results I linked to above. So I have no idea what the final dividend actually is - it could be 7.7p or it could be 7.74p. I'm going to have another read through the RNS and see if I can clear it up.

daveh
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Re: William Hill results

#204733

Postby daveh » March 1st, 2019, 9:26 am

The Board has approved a final dividend of 7.74p per share to give a full-year dividend of 12.0p per share (2017: 13.2p). As per the Board's previous commitment, the calculation for 2018 is based on the 50% payout policy being applied to 2018 earnings excluding the US Expansion investment. From 2019 onwards, US Expansion will be included in the calculation. However, as previously announced, the Board has committed to underpin the dividend so that it does not fall below 8p per share until such time as earnings come back in line with the payout policy.


So they were rounding the values elsewhere in the report. Why?

tjh290633
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Re: William Hill results

#204793

Postby tjh290633 » March 1st, 2019, 12:01 pm

No idea why they rounded the figures but they did it for both dividends in the RNS, and I take it that 7.74p is the correct figure.

TJH

daveh
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Re: William Hill results

#204808

Postby daveh » March 1st, 2019, 12:56 pm

tjh290633 wrote:No idea why they rounded the figures but they did it for both dividends in the RNS, and I take it that 7.74p is the correct figure.

TJH


Its clear from going through the RNS with the find function that the final dividend payment is 7.74p and the interim was 4.26p. However they rounded the dividends to 4.3p and 7.7p in a number of places which is really annoying, including the section I quoted in my original post. It had me very confused for a few minutes and I had to go and check both my excel records and what my broker showed me as having been paid, just in case I'd made a mistake in my spreadsheet.

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Re: William Hill results

#204989

Postby pyad » March 2nd, 2019, 10:51 am

One important point for HYPers which has not been mentioned here is this quote from the accounts:

"...However, as previously announced, the Board has committed to underpin the dividend so that it does not fall below 8p per share until such time as earnings come back in line with the payout policy..."

The 12.00p div for 18 is already a cut of 9.1% on the 13.20p paid for 17. With a further underlying eps decline expected for 19 and their stated 50% payout ratio, it may well result in the 19 div falling in the worst case to their 8p floor level or close.

Against this gloomy div outlook they mention their plan of:

"... a new five-year strategy and a goal to double profits by 2023..."

which, given their fixed payout ratio and assuming the "double profits" will impact underlying eps similarly, (a possibly rash assumption), implies a doubling of the div by then. Doubling from what level? I dunno but again the worst case implies 16p. But I wouldn't bet on it.

On the worst case of a floor 8p div for 19, the lowest forward yield at 185p is 4.3% which is not that high. If you want a gambling sector share IG Group is a better bet on a 19 forecast div of 43.2p making a forward yield of over 7.5% at 578p, which is suitably high even considering that the div will be held for 19. And which is a whole better than a cut.

IGG operates in a rather different gambling sphere to WMH by being a specialist financial markets bookie. But for our purposes I see these two as sufficiently close as to be in the same sector.

You could go multiple choice and have WMH and IGG as a paired gambling sector HYP play but the substantial yield difference means an income sacrifice on the average return of the pair against IGG alone. Choosing multiple shares for a sector is probably more sensible when the yields are very similar.

tjh290633
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Re: William Hill results

#205001

Postby tjh290633 » March 2nd, 2019, 11:15 am

I saw the comments in the RNS and took note. I have long held the view that it is better to buy shares in a bookie than to gamble with them.

IGG are a company of which I have no experience, and your comments suggest that it might be a good replacement for Pearson, if it stops rising, as the yield is below the level where I would normally sell out.

Again, I prefer the idea of holding their shares to gambling with them.

TJH

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Re: William Hill results - "proposed lease restructuring"

#207682

Postby PinkDalek » March 14th, 2019, 2:44 pm

William Hill are writing to landlords regarding "... the viability of our betting shops' operating model on an overall and individual shop level ... The overriding conclusion is that we cannot carry on with the same lease and cost profiles across the estate." and are seeking a "consensual solution".

They "therefore require a change to the term of the existing lease agreement" and, in the case I've seen, are requesting an immediate reduction in the rent payable of 25%.

Despite this, they say "we are not in the position to conduct individual discussions".

Source: A copy letter dated early March 2019 in my hands.


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