Cash will be used for U.S. expansion
Sports betting company William Hill raised £224m ($281.5m) via a stock sale on Wednesday, causing its share price to slide 5.5%. The money will reportedly be used to grow its business in the United States.
William Hill conducted a share placement of 19.99% of share capitalization, selling the stock at a 7.8% discount to Tuesday’s closing price of 138.90p ($1.75). Because of the stock sale, the company’s share price closed down 7.65p ($0.10) to 131.25p ($1.65).
William Hill told investors that it required the cash injection to bolster its “leading position” in the sports betting industry. It will use the money to invest in technology and marketing as the company expands its footprint in the United States.
Slow recovery from depths of pandemic
As one would expect, William Hill has taken a hit during the COVID-19 pandemic because of betting shop, casino, and sports shutdowns. For the six weeks from March 11 to April 28, the heart of the coronavirus lockdown, total group revenue plunged 57% compared to the same period the previous year.
everything else improved from the previous six weeks
Things improved during the next six weeks, ending June 9, with group revenue down 50%. William Hill’s retail establishments earned no revenue during that period, but everything else improved from the previous six weeks: online revenue went from -21% to -3%, online UK revenue moved from -33% to -8%, online international was actually positive, going from +5% to +7%, and US revenue jumped from -90% to a still bad but better -62%.
Online numbers were helped by the return of the German Bundesliga soccer league and horse racing. In the United States, the restart of the NASCAR season and UFC helped, as did the launch of William Hill’s drive-through sports books in Nevada. Customers must signup for mobile accounts in person in the Silver State.
Sports slowly coming back online
The company expects further improvement in the near future. The English Premier League started back up on Wednesday and the NBA and NHL plan to get back on track this summer. The Major League Baseball owners and Players Association seem to be close to an agreement to embark upon a shortened season.
protecting our customers and colleagues.”
Retail seems to be the biggest question mark for the rest of 2020 and even into 2021. Betting shops have been permitted to reopen in England and William Hill said that it is “implementing measures to ensure social distancing requirements are adhered to, protecting our customers and colleagues.”
The company is not reopening all of its stores at once, instead focusing on those it believes will see the most customer traffic.
The London-based William Hill already saw its retail business contract last year after a the maximum allowable bet on fixed-odds betting machines (FOBTs) was slashed from £100 ($125.66) to £2 ($2.51) on April 1, 2019. As a result, the company closed nearly 700 shops, eliminating 4,500 jobs.