An attempt by William Hill (WMH) to put an upbeat spin on its unimpressive final results fails to convince investors with the share price falling 3.7% to 376p this morning.

The bookmaker’s pre-tax profit is down 9% to £233.9 million for the year ended 30 December 2014 driven by exceptional charges of £83.4 million relating to gambling taxes, shop closures, the phasing out of the Sportingbet and Centrebet brands in Australia and the completion of the integration.

Basic earnings per share is down 6% to 23.6p.

Unsurprisingly the group’s results statement focuses on its record operating profit of £372.2 million, up 11% from 2013, and its 21% growth in online gaming net revenue.

WILLIAM HILL - Comparison Line Chart (Rebased to first)

Retail net revenue is flat with operating profit down 2% due to customer-friendly sporting results.

2015 hasn’t started well. Chief executive James Henderson says there was one ‘significant’ loss-making week which means it’s behind management’s expectations for the first eight weeks of the year.

Henderson says the volatility in sporting results is normal given the increased proportion of accumulator football betting, adding the board remains confident in its expectations for 2015.

It follows a disappointing trading statement from William Hill on 20 January which revealed operating profit had fallen by 7% in the fourth quarter with UK retail EBITDA (earnings before interest, tax, depreciation and amortisation) down 13%.

The raft of regulatory changes and taxes is continuing to weigh on high street bookmakers, which makes investing in William Hill and its peer Ladbrokes (LAD) look risky.

We flagged up the difficulties facing bookies in a recent gambling sector report which you can read here.

Issue Date: 27 Feb 2015