William Hill Resilient in Retail, 'Lagging' in Online

While in the first 16 weeks of the year William Hill has shown surprising resilience in retail, the company's interactive division continues to struggle in a market already saturated with well-established, tech-savvy operators.

Gross win across the company was up 5 percent "against strong prior year comparative numbers" -- a gain it said was in line with expectations. (Metrics were not provided.)

The company also revealed a 5 percent rise in interactive gross win against the year-ago period, though gross sports book win was down, it said.

Internet gaming, however, evinced "a good level of growth," bolstered by "strong" performances in games and bingo.

Meanwhile, performance in casino and poker was negatively affected by what the company called "a competitive environment."

"Online, William Hill continues to lag the overall market," wrote Simon Holliday, partner at Global Betting and Gaming Consultants, in an e-mail to Interactive Gaming News Thursday.

"So, much depends on whether the company's new sportsbetting platform can provide renewed momentum in what has become a very competitive marketplace," added Mr. Holliday, whose U.K-based consultancy monitors the land-based and Internet gambling industries.

Indeed, Ralph Topping, chief executive of William Hill, said in February that its new sports betting platform -- currently under development at Orbis -- would be delivered by November 2008.

To this end the company said its project with the software specialist is running "to budget and to plan."

With regard to retail, gross win was up 7 percent, over-the-counter gross win, 3 percent, on extended winter hours and favorable sports betting results, respectively.

Amid a worsening economic climate, the company said it has yet to see evidence of slowing consumer spend -- or any negative impact thereof -- in connection to its retail business.

"Given another period of strong results, the 3 percent increase year-on-year clearly makes us believe that this element of the 'bricks and mortar' businesses will experience some pain in what we expect to be a sustained downturn," said Mr. Holliday.

Looking ahead, Mr. Holliday suggested the company's most significant growth opportunities lie across the Channel.

Recently, William Hill announced plans to open 180 betting shops in Spain -- split across Madrid and Basque Country -- under Victoria Apuestas, its $31.3 million joint venture with Codere, the Spanish gambling operator.

While Mr. Holliday was critical of the company's current online performance, he suggested its business model -- which covers the land-based and Internet markets -- "will ensure that [it] is a winner in the long term."

In a note to clients Thursday, James Hollings, an analyst with Daniel Stewart & Co., retained his "buy" recommendation and 600p price target on the company's shares.

On the London Stock Exchange, William Hill was up 4.75p, or 1.21 percent, to 395.75.