Race is on for William Hill to cash in

WILLIAM Hill is gearing up for a £10 million pay-day from this summer's World Cup as the bookmaker aims to recover from extreme weather and poor sporting results eating into 2009's profits.

News of William Hill's lower profits came as heavily-indebted Gala Coral – which owns rival bookmaker Coral and bingo club chain Gala – was reported to be on the verge of a 200m deal to restructure its finances.

Senior lenders – including Lloyds Banking Group and Royal Bank of Scotland – are expected to meet next week to consider proposals that would involve mezzanine lenders pumping 200m into Gala Coral in return for a controlling stake. Under the proposals, the private equity firms that own the company – which is saddled with 2.5 billion of debt – would only be left with a small slice of the business's equity.

William Hill chief executive Ralph Topping yesterday said he expects the football World Cup, taking place in South Africa in June and July, to contribute more to operating profit than the 5m to 6m William Hill made from the previous tournament in 2006. The group – along with the overall gaming industry – endured a difficult summer last year when English premier league football matches yielded few draws as well as plenty of victories for favoured teams such as Manchester United and Chelsea.

Margins recovered in the final three months of last year and Hill's online operation delivered a strong performance – pushing revenues 4 per cent higher for the year as a whole to 997.9m. Pre-tax profits fell 7 per cent to 197.5m. The company, which has 2,324 betting shops, said its core retail business delivered a robust performance after an 8 per cent decline in amounts wagered.

Its shops enjoyed greater success with gaming machines after gross win per machine increased by 6 per cent to 758 a week.

The group is rolling out new terminals, which will be in the majority of shops by the end of March and feature high- definition, 22in dual screens.

In the first seven weeks of the new financial year, William Hill said its gaming machines continued to deliver good growth, with gross win up 7 per cent. The figure for over-the-counter bets declined 13 per cent.

Although the severe weather led to fixture cancellations in January, it said this was broadly in line with the number of weather-related cancellations in the first two months of 2009.

Topping said kick-off times for the World Cup will be convenient for British gamblers, while the popularity of online betting has grown significantly since the last World Cup. He said: "I think it will be much more than it was last time. I'd be disappointed if it wasn't at least 10m."