Punter-friendly results and increased taxes are weighing on bookmaker William Hill (WMH) this morning, with shares down 3.5% to 359.2p.
The group made a record weekly loss of £14 million in January after several Premier League matches were won by odds-stacked favourites.
This caused its Sportsbook gross win margin to fall below expectations at 7% in the first quarter – 0.1 percentage points lower than the previous year.
The group says it hasn’t managed to make up the shortfall yet.
William Hill also suffered a £20 million hit from the Point of Consumption tax and increased rate of Machines Games Duty, which drove a 19% drop in operating profit.
Betting in shops fell by 4% while online betting rose by 16%.
Numis forecasts pre-tax profit to fall from £317.3 million in 2014 to £259 million in 2014.
‘There is scope for the shares to perform once sporting margins normalise, we have lapped the World Cup, the cost of increased duties have been absorbed and the political risk associated with the General Election is clarified. Until then we expect the shares to struggle to make progress,’ says analyst Ivor Jones.