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William Hill PLC warns on profits after tough Cheltenham

Bookmaker now expects group operating profit for 2016 to be between £260mln-280mln
William Hill PLC warns on profits after tough Cheltenham
William Hill is casting its eye over a potential investment in gaming software group OpenBet

Shares in William Hill PLC (LON:WMH) dived 13% after the bookie blamed "the worst Cheltenham results in recent history" for a profit warning.

The stock fell 49p to 321.8p as William Hill said its retail division made a loss on the race meet in Gloucestershire, although it benefited from favourable UK football results and a strong US Super Bowl.

It also said measures introduced to limit the amount of time punters spend gambling online had hit trading.

"Whilst the trend is still evolving, we estimate that, should these trends persist around current levels, the consequent lower revenues will reduce online's profits by £20-25mln in 2016," William Hill said.

The company said it now expected group operating profit for 2016 to be between £260mln-280mln, provided gross win margins returned to more normal trends during the rest of the year.

Peel Hunt was expecting adjusted pre-tax profit of about £273.1mln.

William Hill also said it was in advanced discussions with a partner about a potential investment in south-west London-based sportsbook and gaming software company OpenBet.

"These discussions may, or may not, lead to a transaction," William Hill said.

The group said it was still committed to the share buyback programme previously announced.

Chief executive James Henderson said: "Today's statement reflects the combined effect of our assessment of the impact of recent regulatory changes and unfavourable sporting results including the worst results at Cheltenham in our recent history.

"We are also experiencing softer UK growth as a consequence of acquiring lower value customers.

"While the rest of the group is performing in line with our expectations, we continue to focus on improving online's performance so that we can, once again, outperform the market."


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