Investors are not likely to be happy with William Hill once the profit margin for 2016 is published on the 2nd February. Only days ago the company announced yet another profit warning, issuing a statement that investors should expect to find earnings at the bottom end of the previously forecasted £260 to £280 million.
They had to issue their first profit warning as early as the 1st quarter in 2016 and things have not improved at all during the course of the year. A second profit warning followed later in the year.
There have indeed been a number of problems plaguing the operator last year. Despite huge sporting events such as the Euro 2016 and the Olympic Games, sports betting has not seen much of an increase. Additionally punters seem to have been rather lucky in November and December, especially with horse racing events.
Things weren’t helped with an attempt by 888 Holding and Rank Group when they tried to push William Hill into a massive merger, which William Hill opted out of. Instead the company made advances on the Amaya Group, but investors quickly shot those negotiations down.
After one too many negative news items CEO James Henderson was shown the door and his position has yet to be filled again. In the meantime Philip Bowcock is holding the reins, trying to steer William Hill back into more favourable waters.
Let’s not forget that William Hill had to concede the position of market leader for betting shops in the UK after Gala Coral and Ladbrokes merged, becoming the market leader in the process.
Senior management at William Hill will have to forego any bonuses this time around and they will have to make some improvements as well, including appointing a new CEO.
Whilst William Hill is a giant in the industry, they are not protected from failure. Competition has been particularly lively in 2016 and William Hill will have to aim for greater stability in order to counter further negative effects.
Not all is bad news, though. Not long ago William Hill announced a partnership with Caesars Entertainment in the US for a new pari-mutuel racebook, which is set to kick off at the Kentucky Derby this year.