StockMarketWire.com – Gambling group William Hill made £335m of operating profit in 2013, versus £330.6m in 2012. The prior year included 53 weeks and the unaudited 52 week operating profit in 2012 was £326.4m.
The Group’s effective tax rate benefited in the year from a deferred tax credit following an enacted reduction in corporation tax rates hence the substantially lower pre-exceptional tax charge, which at 11.5% was 5.0 percentage points lower than the prior year (2012: 16.5%). Against this, amortisation of specifically identified intangibles arising on acquisition was higher as a result of the Sportingbet acquisition and pre-exceptional interest charges were also higher, reflecting the additional debt taken on to fund the acquisitions made during 2013. Pre-exceptional profit after tax was £247.6m, 1.3% ahead of the prior year (2012: £244.5m).
During the period, the Group completed three acquisitions: the assets acquired inter alia from Sportingbet PLC, the Australian tomwaterhouse.com business and the acquisition of the 29% minority interest held by Playtech in WH Online. With net revenue of £1,486.5m, the Group saw revenues grow by 16% or £209.6m versus the prior year (2012: £1,276.9m). By channel, Retail saw an additional £69.1m primarily arising as a result of the change in accounting following the introduction of Machines Games Duty (MGD). Online saw an additional £39.6m of net revenue following a successful year of growth from its Sportsbook operations, the US an additional £13.8m arising both as a result of improved margins and from a full year of operations versus 27 weeks in 2012, and William Hill Australia contributed £86.7m in 2013 following its acquisition during the year.
Pre-exceptional cost of sales for the Group also grew strongly, by £94.4m from £172.2m in 2012 to £266.6m. This line includes taxes, levies and royalties relating to the operation of a betting and gaming company. Retail saw the bulk of the growth, with a £66.2m increase again largely related to the introduction of MGD, and which offset the net revenue movement. Online cost of sales grew by £4.6m due primarily to increases in taxes paid in licensed territories, together with growth in mobile Sportsbook software charges. The addition of William Hill Australia contributed a further £20.2m increase to cost of sales. The Telephone channel saw a £2.3m increase as the business rolled over a £3.4m accrual release in 2012.
