Legacy British bookmaker William Hill has suspended dividend in light of the dynamic situation and uncertainty the spread of the coronavirus has created.
The company said that it expects that the dangerous virus that has gripped every contour of society would have a material impact on its full-year revenue and core earnings.
William Hill said Monday in a statement on its official website that while it cannot at this point accurately determine the effect of Covid-19, it has considered a number of possible outcomes in the next few months.
The coronavirus outbreak and rapid global spread prompted the cancellation or postponement of multiple sporting events around the world, wreaking havoc and concern in the otherwise highly lucrative sports betting industry.
William Hill said that the outcomes it has based its earnings estimates on include UK and international football resuming in August, the cancellation or postponement of the UEFA Euro 2020 until next year, one-month closure of UK retail betting ships, the cancellation of the Grand National and Royal Ascot and US sports resuming in time for the NFL season in early September.
If the above outcomes transpire, William Hill said, Group EBITDA is expected to slump by £100-£110 million. At present, horse racing and betting shops remain open, but tougher measures capsaq in the UK’s fight against the spread of Covid-19 are expected to be introduced any time now as the number of confirmed cases grows rapidly.
William Hill Suspends Dividend
William Hill said Monday that in the case of an additional month of closure of its betting shops, its EBITDA would drop by £25 million to £30 million.
The company revealed that under the current circumstances, its board has decided to suspend dividend until further notice and to focus on retaining resources within the group. William Hill noted that it has “a robust financial position and has appropriate liquidity to absorb the impacts of the scenario outlined.”
The gambling operator pointed out that it has implemented a number of measures to mitigate the anticipated negative effects of the coronavirus outbreak and to ensure normal operations.
William Hill said that prior the recent cancellations and postponement of major sporting events around the world, trading during the first quarter of the year was ahead of expectations thanks to favorable sports results and a strong retail performance.
Sports betting accounted for 53% of the group’s revenue in 2019.
William Hill’s CEO, Ulrik Bengtsson, commented that while “these are truly unprecedented times”, the company has “been around for 86 years and over that time we have gained huge experience and understanding of our customers.”
Mr. Bengtsson went on that:
“We are taking action to maintain our operational capability, to secure and enhance our liquidity and to ensure we are in a strong position to resume full operations when the sporting calendar returns to normal.”
In separate news, it emerged earlier this month that Betfred founder Fred Done has begun building a stake in William Hill, taking advantage of the weak stock market. The billionaire businessman first bought a 3% stake in the legacy bookmaker and is understood to have added to that last week.
According to British media reports, Mr. Done is now one of the biggest investors in William Hill with a stake worth more than £25 million.
The Betfred founder reportedly offered last year to buy William Hill’s retail betting shops in the UK, but the bookmaker rejected the offer. Mr. Done buying stock in the gambling operator prompted speculations that a tie-up between his own bookmaker, Betfred, and William Hill could occur at some point in future.
Source: COVID-19 update; dividend suspended
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