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Summary
- Two UK-based gambling companies, William Hill and Ladbrokes, owned by Entain PLC reported a drop in retail business due to the Covid-19 crisis.
- While William Hill’s profits fell sharply, Ladbrokes reported profits due to a joint venture with MGM
- Both companies witnessed a surge in online gambling due to lockdown restrictions.
Two UK-based gambling companies William Hill (LON: WMH) and Ladbrokes, owned by Entain PLC (LON:ENT), on Thursday, 4 March, reported a drop in revenues at betting shops due to the covid crisis-induced forced closure of shops and cancellation of live sports events. While William Hill suffered a sharp profit drop, Ladbrokes managed to show some growth.
William Hill
Betting firm William Hill reported its annual adjusted pre-tax profit dropped by a whopping 91 per cent to £9.1 million for the year ended 29 December 2020, compared with £96.5 million in 2019. However, the company’s online net revenues rose by 9 per cent due to customers moving to online betting amid lockdown restrictions.
Want to know more? Do read: William Hill (LON:WMH): Why Are PE Firms Eyeing UK Gambling Companies?
William Hill’s CEO Ulrik Bengtsson said while its retail business faced regional disruption, the stores which were re-opened achieved pre-COVID trading levels in a short span of time. Bengtsson said the company’s strategy towards online gambling had seen strong growth.
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Ladbrokes
In contrast, Entain’s brand Ladbrokes announced its underlying profits rise of 2 per cent, reporting a profit before tax of £174.7 million. The company had reported losses in the previous year. Despite posting profits, the company did not disburse dividends this year due to uncertainties surrounding the pandemic.
Entain reported a 40 per cent fall in its retail business, which was offset by its joint venture with MGM Resorts, BetMGM, and due to the rise in online gambling. The company’s market share rose by 18 per cent across the 12 states in the US following the JV. However, MGM announced in January that it would not take over Entain.
Want to know more? Do watch: MGM Resorts won’t bid for gambling firm Entain. | UK |
Separately, William Hill is set to be acquired in a £2.9 billion deal by US based casino company Caesars (NASDAQ:CZR).
Share performance
William Hill (LON: WMH) shares last traded at GBX 270.80, down by 0.15 per cent, while the FTSE 100 listed firm Entain PLC (LON:ENT) stock prices were at GBX 1,464.00, up by 0.21 per cent as of 4 March. Comparatively, broader index FTSE 100 closed at 6,650.50, down by 0.37 per cent for the day.
