Shares in William Hill fell by 7.5% in early trading on Friday after investors reacted negatively to the news that first half profits fell by 35% year-on-year.
More than £240 million has been slashed from William Hill’s value after the British bookmaker announced pre-tax profits of £78.7 million for the 26 weeks to 30 June 2015, down 35% from the £121.8 million for the same period in 2014.
According to the financial statement released to investors and the London Stock Exchange, William Hill paid a staggering £44 million in gambling duties from the Point of Consumption Tax and increased Machine Games Duty.
The Point Of Consumption Tax (POCT) came into force on December 1, 2014. Offshore gambling companies have to pay the British government 15% of any profits derived from the gambling company’s customers who are based in the United Kingdom.
More than £240 million has been slashed from William Hill’s value
William Hill’s Chief Executive Officer, James Henderson, commented:
“We have delivered a good operational performance in the past six months during a period of significant regulatory and taxation change for the industry. Whilst factors such as the Point of Consumption Tax and the increase in the Machine Games Duty rate have impacted our cost base as expected, we continue to progress our strategy and invest in our long-term growth drivers.
“We are making excellent progress across our three strategic priorities, particularly in technology where Project Trafalgar will give us the ability to bring our customers a faster and more stable online service, a much improved mobile experience and an enhanced in-play product range on mobile devices.
“Meanwhile, innovations such as our industry’s first Accelerator programme will allow us to further our strategy to bring customers a differentiated and personalised service.
“I am particularly pleased with our move into the emerging online lotteries market, which will support our international diversification and gives us exposure to an exciting growth market in a gambling vertical which is new to us.
“We remain committed to working with the industry and the regulator to promote responsible gambling and ensure that the marketing of gambling is socially responsible.
“Looking ahead, the Board is confident that the Group remains well positioned to gain share in key markets, notwithstanding the impact of increased taxes and regulation. In UK Retail, we anticipate some further impact from the £50 journey during the second half. We are making good operational progress in building a leading business in Australia, repositioning William Hill Australia in the key recreational segment in that market.”
The company also announced it is increasing its interim dividend by 2.5% to 4.1p per share which it says “reflects the Board’s continued confidence in the outlook for the Group.”