Shareholders in British gambling giants William Hill and Ladbrokes have seen their investments lose money today after both companies announced poor trading figures for the first quarter of the financial year.
William Hill’s Chief Executive Office, James Henderson, pinned the blame for a 19% reduction in operating profit on the Point of Consumption Tax and the company enduring its largest ever loss-making week during January.
In a statement to the London Stock Exchange, Henderson revealed that while the Group’s net revenue increase by 1%, operating profit was £16 million lower, impacted by £20 million of additional taxation.
Henderson also wrote that online wagering grew 20% in February and March, and increase 29% during the Cheltenham festival, but the company’s gross win margins were severely damaged by the Group losing a staggering £14 million during the third week of the year on the back of “customer friendly football results.”
It wasn’t all doom and gloom because Gaming net revue was up 8%, casino increased by some 10% and bingo by 8%, although poker was down a massive 32%.
At time of writing, shares in William Hill were trading at 357.60 pence, down 3.95% from the close of trading on April 22.
There were similar poor Q1 figures from the Ladbrokes camp where newly appointed Chief Executive Jim Mullen also cited customer favouring results as the main reason that profits were down in the three months ending March 31, 2015.
“Adverse football in weeks 3, 8 and 12, a weaker Cheltenham, albeit on higher staking and a significant single digit millions loss to a small number of higher staking customers incurred in the early part of the quarter, and which is not expected to reverse, resulted in lower margins and a sharp net revenue decline,” said Mullen in a statement released on the London Stock Exchange.
The sharp decline in net revenue mentioned by Mullen translates to a huge 31.5% drop, which in turn saw a £4.1m reduction in Earnings before Interest and Taxation when compared to Q1 of 2014.
Shares in Ladbrokes can now be bought for 101.50 pence, 1.17% cheaper than the close of play on April 22, a 52-week low.
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