Industry reaction: Online was a stumbling block for William Hill in 2015
Problems with an online project were a significant obstacle for William Hill in trading last year, according to two industry analysts.
The operator reported a 4% upturn in online net revenue to £550.7m for the full year 2015 and launched its new mobile web and iOS app as part of a technological overhaul known as Project Trafalgar in Q4.
It was announced within the financial report that managing director online Andrew Lee will be leaving the company “at some point in 2016” and director of corporate development and innovation Crispin Nieboer has stepped into the position on an interim basis.
Steve Donoughue, a gambling consultant, and Nicholas Batram, leisure and gaming analyst for advisory firm Peel Hunt, both spoke to Gambling Insider and feel that the operator experienced struggles with Project Trafalgar.
Donoughue said: “My big concern is Andrew Lee leaving as managing director of online and the search for a replacement. It looks like things are plodding along with Project Trafalgar and it’s hitting some to-be-expected bumps in the road. Surely this will not improve while a search for a new boss goes on?”
Batram said: “Clearly online hasn’t been straightforward, in part reflected by the management moves. Project Trafalgar has had a few teething problems but this shouldn’t come as a total surprise as there is always a risk with such sizable technology integrations.”
Net revenue for retail went down 2% to £889.5m and William Hill Australia posted a 20% net revenue decrease to £97.9m.
Batram said: “Australia has been tough with them but there were signs in Q4 that the business is now moving in the right direction. Retail was also a pretty solid performance and encouraging for Q4.”
It looks like things are plodding along with Project Trafalgar and it’s hitting some to-be-expected bumps in the road. Steve Donoughue
Both summarised the year as an acceptable performance in light of challenges such as the UK point of consumption tax, which was implemented in December 2014 and requires operators offering real-money services to UK customers to pay a 15% remote gaming duty on profits.
“Hopefully everything will be shipshape for Euro 2016, which should make up for the additional costs of the POC tax,” Donoughue said. “Overall, it’s a seven out of 10 but in tough times.”
Batram added: “Overall trading has been in line with our expectations. It was a difficult year given the increased operating costs from taxation creating an £87m headwind, and comparison with 2014 which had the boost from the FIFA World Cup.
“Altogether, I would say not perfect but reassuring and 2016 should be a better year for Hills given the drag from last year’s tax/regulatory changes.”
Hills reported a 2% increase for gaming machine net revenue for Q4 and plans a full roll-out of its prototype self-service betting terminal in H1 2016.
Donoughue said: “Hopefully the new self-service betting terminals coming in will make a difference? Or will they become the new bête noire machine and cause more moral panic? Fortunately James Henderson [CEO] is more concerned about politics than his predecessor [Ralph Topping].”
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