{"id":11805,"date":"2016-03-23T11:30:45","date_gmt":"2016-03-23T11:30:45","guid":{"rendered":"http:\/\/www.betangel.com\/blog_wp\/?p=11805"},"modified":"2016-03-23T11:30:45","modified_gmt":"2016-03-23T11:30:45","slug":"william-hill-issue-profit-warning","status":"publish","type":"post","link":"https:\/\/www.betfairtradingblog.com\/blog_wp\/2016\/03\/23\/william-hill-issue-profit-warning\/","title":{"rendered":"William Hill issue profit warning"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Further to <a href=\"https:\/\/www.betangel.com\/blog_wp\/2016\/02\/22\/william-hill-living-in-stone-age\/\">my recent post<\/a>, William Hill have issued a profit warning this morning. Other gambling related stocks have fallen in response.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">You can read the full warning here: &#8211;<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\"><a style=\"color: #000000;\" href=\"https:\/\/www.investegate.co.uk\/william-hill-plc\/wmh\/trading-update\/201603230700099669S\">https:\/\/www.investegate.co.uk\/william-hill-plc\/wmh\/trading-update\/201603230700099669S<\/a><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">In a nutshell: &#8211;<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #000000;\">Time-outs and self exclusions are up<\/span><\/li>\n<li><span style=\"color: #000000;\">Gross win margin is down due to\u00a0European football results and also the worst Cheltenham results in recent history.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\"><strong>The numbers &amp; valuation<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Profits for the year are forecast to fall by up to \u00a330m. However they would still be around \u00a3260-280m. It&#8217;s interesting if you look at this number, why? William Hill will generate say, \u00a3250m. Their market valuation is \u00a33.3bn.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">PP\/Betfair is valued at \u00a37bn so if you marked both up at the same multiple you would think Betfair would have earnings of \u00a3500m. 2015 estimates are at\u00a0\u00a3116m rising to \u00a3167 in 2016. Betfair currently has an\u00a0very high valuation, so high you probably\u00a0need oxygen.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\"><strong>How competitive advantage is gained and lost<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">This is the curious way the market works. People pay very high multiples for growth and heavily discount lack of it. Investors buying in at this level are probably discounting world domination. As I pointed out in my previous post William Hill have elements of key strategy wrong, but have the earnings to do something about it.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">However PPB have a large cash pile that keeps growing and no debt, something other competitors do not have.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">I once stood in a board room talking to directors of a crusty old monolith of industry who were meandering about and not making any decisions (read &#8211; not taking risk). They were worried if they started a new business (Perhaps a betting exchange in modern times) it may disrupt and canabalise there existing customer base.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">I told them not to worry about canabalising their customer base, as if they didn&#8217;t a competitor would easily do the job for them. They still did nothing.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">That company no longer exists, there is a moral in there somewhere!<\/span><\/p>\n<p style=\"text-align: justify;\">\n<p style=\"text-align: justify;\">\n<p style=\"text-align: justify;\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/visit3dvegas.com\/affiliate\/whill\/wp-content\/uploads\/2013\/01\/WilliamHillLogo.jpg\" alt=\"\" width=\"776\" height=\"261\" \/><\/p>\n<div class=\"pvc_clear\"><\/div>\n<p id=\"pvc_stats_11805\" class=\"pvc_stats all  \" data-element-id=\"11805\" style=\"\"><i class=\"pvc-stats-icon medium\" aria-hidden=\"true\"><svg aria-hidden=\"true\" focusable=\"false\" data-prefix=\"far\" data-icon=\"chart-bar\" role=\"img\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 512 512\" class=\"svg-inline--fa fa-chart-bar fa-w-16 fa-2x\"><path fill=\"currentColor\" d=\"M396.8 352h22.4c6.4 0 12.8-6.4 12.8-12.8V108.8c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v230.4c0 6.4 6.4 12.8 12.8 12.8zm-192 0h22.4c6.4 0 12.8-6.4 12.8-12.8V140.8c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v198.4c0 6.4 6.4 12.8 12.8 12.8zm96 0h22.4c6.4 0 12.8-6.4 12.8-12.8V204.8c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v134.4c0 6.4 6.4 12.8 12.8 12.8zM496 400H48V80c0-8.84-7.16-16-16-16H16C7.16 64 0 71.16 0 80v336c0 17.67 14.33 32 32 32h464c8.84 0 16-7.16 16-16v-16c0-8.84-7.16-16-16-16zm-387.2-48h22.4c6.4 0 12.8-6.4 12.8-12.8v-70.4c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v70.4c0 6.4 6.4 12.8 12.8 12.8z\" class=\"\"><\/path><\/svg><\/i> <img loading=\"lazy\" decoding=\"async\" width=\"16\" height=\"16\" alt=\"Loading\" src=\"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-content\/plugins\/page-views-count\/ajax-loader-2x.gif\" border=0 \/><\/p>\n<div class=\"pvc_clear\"><\/div>\n\n<div class=\"twitter-share\"><a href=\"https:\/\/twitter.com\/intent\/tweet?via=betangel\" class=\"twitter-share-button\">Tweet<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Further to my recent post, William Hill have issued a profit warning this morning. Other gambling related stocks have fallen in response. You can read the full warning here: &#8211; https:\/\/www.investegate.co.uk\/william-hill-plc\/wmh\/trading-update\/201603230700099669S In a nutshell: &#8211; Time-outs and self exclusions are up Gross win margin is down due to\u00a0European football results and also the worst Cheltenham [&hellip;]<\/p>\n<div class=\"pvc_clear\"><\/div>\n<p id=\"pvc_stats_11805\" class=\"pvc_stats all  \" data-element-id=\"11805\" style=\"\"><i class=\"pvc-stats-icon medium\" aria-hidden=\"true\"><svg aria-hidden=\"true\" focusable=\"false\" data-prefix=\"far\" data-icon=\"chart-bar\" role=\"img\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 512 512\" class=\"svg-inline--fa fa-chart-bar fa-w-16 fa-2x\"><path fill=\"currentColor\" d=\"M396.8 352h22.4c6.4 0 12.8-6.4 12.8-12.8V108.8c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v230.4c0 6.4 6.4 12.8 12.8 12.8zm-192 0h22.4c6.4 0 12.8-6.4 12.8-12.8V140.8c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v198.4c0 6.4 6.4 12.8 12.8 12.8zm96 0h22.4c6.4 0 12.8-6.4 12.8-12.8V204.8c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v134.4c0 6.4 6.4 12.8 12.8 12.8zM496 400H48V80c0-8.84-7.16-16-16-16H16C7.16 64 0 71.16 0 80v336c0 17.67 14.33 32 32 32h464c8.84 0 16-7.16 16-16v-16c0-8.84-7.16-16-16-16zm-387.2-48h22.4c6.4 0 12.8-6.4 12.8-12.8v-70.4c0-6.4-6.4-12.8-12.8-12.8h-22.4c-6.4 0-12.8 6.4-12.8 12.8v70.4c0 6.4 6.4 12.8 12.8 12.8z\" class=\"\"><\/path><\/svg><\/i> <img loading=\"lazy\" decoding=\"async\" width=\"16\" height=\"16\" alt=\"Loading\" src=\"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-content\/plugins\/page-views-count\/ajax-loader-2x.gif\" border=0 \/><\/p>\n<div class=\"pvc_clear\"><\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1465],"tags":[1244,2237,62],"class_list":["post-11805","post","type-post","status-publish","format-standard","hentry","category-industry-news","tag-bookmaker","tag-profit-warning","tag-william-hill"],"_links":{"self":[{"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/posts\/11805"}],"collection":[{"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/comments?post=11805"}],"version-history":[{"count":1,"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/posts\/11805\/revisions"}],"predecessor-version":[{"id":11806,"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/posts\/11805\/revisions\/11806"}],"wp:attachment":[{"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/media?parent=11805"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/categories?post=11805"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.betfairtradingblog.com\/blog_wp\/wp-json\/wp\/v2\/tags?post=11805"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}