Yesterday William Hill PLC reported a solid performance in the first six months of 2009 despite a difficult economic environment. Group net revenue was up 5% to £515.5 million, with poor horseracing results offset by good machine performance. William Hill Online net revenue rose 58% to £100.1 million. In a separate announcement the Group said it is to transfer its sportsbook and fixed-odds games to Gibraltar, a move that will be a blow to the British government.

According to the company, the transfer of the Sportsbook and fixed-odds games is part of the ongoing integration of William Hill Online. William Hill Online was created in December 2008 through the combination of William Hill’s existing interactive business with assets acquired from Playtech Limited. William Hill Online’s headquarters and core gaming operations are already based in Gibraltar.

As a result of the move, William Hill Online will benefit from cost savings already being achieved by other offshore operators, which have previously put it at a commercial disadvantage. William Hill continues to have a substantial presence in the UK and Ireland, including 2,300 licensed betting offices and around 16,000 employees. It paid almost £300m in UK taxes and levies in 2008.

Ralph Topping, Chief Executive of William Hill, commented: “We are ambitious for William Hill Online to be a successful online betting and gaming business on the international stage. Having acquired European-focused websites, global marketing and multi-lingual customer services capabilities, this is the logical next step in our development of this business. William Hill Online has an increasingly international customer base and this move will ensure we are well positioned to compete on an international stage.”

William Hill has issued a profits warning, saying that a difficult July and the uncertain economic environment are likely to make profits for the full year from the retail channel lower than expected. Rising unemployment and constraints on consumer spending are expected to affect results in the second half of the year.

Topping concluded, “A number of strategic initiatives also ensure we are better positioned to respond to the challenges we face. We have a strengthened balance sheet; have withdrawn from our international retail operations in Italy and are in the process of withdrawing from Spain; have a strong platform to continue to grow our online business; are well placed to benefit from the imminent transfer of Sportsbook and fixed-odds games to Gibraltar; and continue to have a highly competitive position in gaming machines.” (E-08.05.09)

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