William Hill still under the whip as key Cheltenham Festival approaches

9 January 2017

“A third profit warning, fears over what the Government’s review of Fixed Odds Betting Terminals may mean and the ongoing absence of a full-time chief executive all leave bookmaker William Hill among the FTSE All-Share’s also-rans this morning after a 3.5% tumble in its share price,” comments Russ Mould, investment director at AJ Bell.

“Interim boss Philip Bowcock has stated that 2016 profits will come in at the bottom of the guided range of £260 million to £280 million, in a stark contrast to November’s comment that earnings would come in at the top end.

“The bookie cites unfavourable results on the race track and football pitch in particular.  Wins for hot favourites like Thistlecrack at Kempton, Native River at Chepstow and a slew of winners for trainers Willie Mullins and Gordon Elliott at the big Leopardstown Christmas jump meeting in Ireland, as well as a string of wins from league leaders Chelsea and a resurgent Manchester United have emptied the bookies’ satchels.

“Hills has yet to find a replacement for boss James Henderson after his abrupt departure in the summer or recover its footing after the failed bid for the business from Rank and 888.

“Shareholders in the company will also be nervously awaiting the Government’s review into Fixed Odds Betting Terminals (FOBTs) and whether laws will be passed to limit punters’ stakes on the gambling terminals, as these are a huge profit generator for the business, while the all-important Cheltenham Festival in March is already nearly upon us.

“Eleven favourites bolted up across the 28 race, four-day meeting last year and a repeat of that would put a nasty dint in Hills’ prospects for 2017. At the previous four Festivals, favourites obliged in 9, 9, 6 and 7 races respectively, dating from 2012-15.”

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