Bookie finds slot for some old-fashioned technology

Published on Wednesday 27 February 2008 20:46

OLD-FASHIONED slot machines helped bookmaker William Hill post profits in line with expectations, despite a major drop in online gambling profits.

The London-based bookmaker said its 8,400 fixed-odds betting terminals, machines which allow punters to bet on the outcome of games such as roulette, had increased 15 per cent last year.

But this was offset by a fall in profits from its ageing website, which fell by 10.6 million to 50.9m.

William Hill admitted the online problem was with its own site rather than a fall in internet gambling overall, attributing the problem to the "relative inflexibility of our current technology".

The company said this prevented it from matching the betting opportunities offered by its rivals.

William Hill, which has more than 2,200 betting shops across the UK, invested millions of pounds trying to fix the problem itself before scrapping the plan and hiring specialists Orbis to attempt to resolve the difficulties.

Scrapping the in-house development saw the company take a one-off charge of 20.9m. But Ralph Topping, who became chief executive last week, was yesterday confident that a new system could be developed and working before the end of this year.

"I would like to, and would expect to, see it delivered in November this year," he said, adding that Orbis had said it was in "significantly better shape" than other projects the company has worked on.

Excluding exceptional costs related to attempts to fix the website, William Hill made a pre-tax profit of 223.4m, down 5.1 per cent on 2007, but in line with market expectations.

What the company calls "gross winnings", the overall amount lost by gamblers, rose 6 per cent to 983.7m.

Topping said there was "no evidence" that a slowdown in consumer spending was adversely impacting the group's performance, adding that, during previous recessions in the 1990s, there was little impact on the business.

One major adverse impact came from the weather, with cancelled meetings hitting its horse racing business last summer, William Hill said.

Topping also took the chance to rule out categorically the acquisition of Irish rival Paddy Power, which had been raised by analysts as a possible way to quickly solve its website problems.

"There's nothing in that (rumour]," he said. "I actually don't see any logic in it."

Shares added 2.8 per cent, or 11.25p, to 413.5p, having previously lost almost a quarter of its value so far this year.

Analysts noted that the company had already highlighted the technology problems in its trading statement last month the results were as expected.

The company, which was formed in 1934, also increased its final dividend by 7 per cent to 15.5p.