A profit warning and disappointing third quarter results from bookmaker William Hill (WMH) drives a 6.7% drop in the share price to 322.3p this morning.
The £3 billion cap says full year profits will be at the bottom end of analysts’ expectations of £290.9 million to £312.1 million as a result of tough comparisons from last year’s football World Cup, additional gambling taxes and weak sporting results in the third quarter.
Operating profit in the 13 weeks to 29 September is down 39% and revenue is 9% lower.
Poor sports results have impacted its retail, US and Australia divisions, with the latter registering a 91% decline in operating profit. A 19% drop in the Australian dollar hasn’t helped.
The only bright spot is William Hill’s core online markets – in the UK amounts wagered is up by 7% and gaming net revenue is up by 15%.
The weak trading statement follows a 35% drop in pre-tax profit to £78.7 million in the first half, when William Hill suffered a £44 million increase in its tax bill.
Many gambling companies are trying to mitigate the impact of new taxes and regulations through mergers and acquisitions, most notably Ladbrokes (LAD) and Gala Coral and Betfair (BET) and Paddy Power (PAP).