UK bookmaker William Hill PLC (LON:WMH) has posted a huge loss after writing down the value of its high street shops by almost £900mln ahead of new rule changes that will limit how much customers can bet on in-store computerised gaming machines.
Shares fell 2.1% to 183.6p early on Friday morning, having halved over the past year.
Last summer, the UK government slashed the maximum amount that punters could stake on fixed-odds betting terminals, dubbed the ‘crack cocaine of gambling’, from £100 to £2.
Even allowing for some “mitigation measures” to limit the damage, William Hill expects the rule change, which is due to come into force on 1 April, to dent its profits by as much as £100mln a year.
The betting firm said the government’s “unprecedented” decision has forced it to undertake a group-wide restructuring programme that will see it close shops and axe jobs. Over the next two years, that is expected to cost William Hill another £60-75mln.
The FTSE 250 company saw revenues rise 2% to £1.62bn last year (2017: £1.59bn), but it swung to a pre-tax loss of £721.9mln (2017: profit of £146.5mln) after taking an exceptional charge of £882.8mln related to the regulatory overhaul.
Divi cut but not scrapped
William Hill trimmed its annual dividend payout to 12.0p (2017: 13.2p) but repeated an earlier promise to keep the divi above 8p a share going forward.
“Against this backdrop, we delivered a good underlying performance in Online, strong growth in the US Existing business and a resilient Retail outturn in the face of difficult high street conditions,” said chief executive Philip Bowcock.
“We know the next few years will require careful navigating and investment, but with a clear strategy and diverse, experienced leadership teams in place we are ready to capitalise on the opportunities available to us.”