Web is a winner for William Hill LSE: WMH.L

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Tuesday September 7, 03:00 AM
Web is a winner for William Hill
A SHARP rise in internet betting profits at William Hill (LSE: WMH.L - news) was largely eclipsed yesterday by news that Britain's second biggest bookmaking group had suffered as punters enjoyed a lucky streak on horse races in July and August.

Shares in the company slid 12.5p, or 2.3 per cent, to 530p as a result, overshadowing a rise in pre-tax profits to £118.4m (£85m) in the first six months of 2004.

It made the bookmaker the biggest FTSE 100 faller yesterday.

However, some analysts said the sell-off was overplayed.

One commented: "The performance of the likes of Ladbroke [Britain's biggest bookmaking group and part of the wider Hilton business] has been very impressive for some time now.

"Hill's latest figures, despite the fly in the ointment of July and August, shows what a great defensive sector gambling is."

William Hill revealed that operating profits soared 50 per cent to £24.2m at the interactive division, which lets customers place bets via the internet.

This embraced strong growth throughout the division, ranging from on-line poker to horse racing and football results.

Hill is to capitalise on this rapid growth in internet betting by launching William Hill TV next month - a 24-hour TV channel that will let punters bet on games such as virtual horse racing and roulette.

Investors benefit through a hefty 57 per cent rise in the interim dividend to 5.5p (3.5p).

However, Hill's chief executive, David Harding, said since the trading period end the company had suffered from too many favourites winning races at two popular meetings, "Glorious Goodwood" and York.

The company, which runs 1,600 UK betting shops, including 226 in Scotland, said its gross win - its total takings before expenses are subtracted - rose 18 per cent in the first trading half.

But in the eight weeks to 24 August the gross win was up just 8 per cent as horse-racing results turned less favourable to the bookies.

Harding said: "We see this as within the long-term normal variation in UK horse racing and expect the gross win for the full year will be somewhere between 8 and 18 per cent." It was a case of "swings and roundabouts", he added.

He added that Hill was about £8m to £9m ahead of where he thought first-half profits would be, and £3m to £4m behind in the first eight weeks of the second trading half.

The group said trading had also benefited from the Euro 2004 football championships - where Greece were the unfancied winners. Hill said the tournament was by far its most profitable event in the year so far, producing a profit of £11m - four times what it made from the Cheltenham festival.

Despite yesterday's share price setback, the stock has been a star turn on the stock market since the group was floated at 225p in June 2002.

By: MARTIN FLANAGAN -- 07-Sep-04

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