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William Hill recommended as a ‘buy’ despite reporting ‘tough start to the year

11th May 2016 Print

As William Hill updates the market Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors.

“In a trading update released this morning, William Hill said that its gross win margin, the amount it has won and its customers have lost, had benefitted from English Premier League results, despite odds on Leicester City winning the title of 5000-1. Investors should acknowledge however, that net revenues slipped 3%, with the group taking a hit from punters cashing out over Cheltenham festival and unfavourable European football results.

“It was not all doom and gloom as the group stated that it was maintaining its full year profit guidance of between £260m and £280m. In addition, online betting in core markets continue to grow, albeit at a slower pace than William Hill had anticipated. It is also worth noting that positive trends in William Hill’s overseas operations remain strong and growing.

“We continue to recommend William Hill as a ‘buy’ due to the growth in its international operations, which provides diversification and expands its services to appeal to a wider demographic. However, poor results from the online business and increasing competition make this stock suitable for higher risk investors.”