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* To close 109 loss-making shops out of total of over 2,400
* Says closures would put 420 jobs at risk
* To take exceptional charge of up to 24 mln pounds
* Q1 operating profit down 14 percent
* Shares up 1.2 percent
(Adds share price reaction, analyst comment)
By Keith Weir
LONDON, April 25 Bookmaker William Hill Plc
will close more than 100 British betting shops this
year, blaming the decision on a tax increase on high-stakes
gambling machines that have become one of their main sources of
The Conservative-led government angered the betting
industry by announcing an increase in tax to 25 percent from 20
percent on the machines in its budget in March, a move that will
cost bookmakers around 75 million pounds ($126 million) a year.
Critics of the machines - which offer versions of games such
as roulette - say they are addictive and complain there are too
many betting shops in British town centres. But the industry
says there is no evidence to support claims that they fuel
William Hill, Britain's largest bookmaker, said the tax rise
meant there was no prospect of turning around a group of 109
loss-making shops from a total estate of over 2,400. The
closures would put 420 jobs at risk and result in exceptional
costs of up to 24 million pounds, it said.
"This is particularly disappointing as, through the economic
downturn, we have worked hard to grow our retail base but this
further planned increase in indirect taxation makes this action
necessary," Chief Executive Ralph Topping said in a statement.
William Hill also said operating profit had fallen by 14
percent in the first quarter of 2014, hit by big payouts to
gamblers on two weekends on which many top soccer sides had won.
But the group is hoping heavy betting on the soccer World Cup in
June and July will help to offset the first-quarter problems.
"While there is no guarantee we can make up the difference,
we continue to believe the increased customer confidence from
such wins should be good for business, especially in this World
Cup year," Topping said.
Bookmakers face increased tax bills on two fronts over the
coming year, with the government also closing a loophole that
has allowed them to base online operations offshore.
William Hill shares traded 1.2 percent higher at 337 pence
by 0724 GMT, the biggest risers on Britain's FTSE 100 index of
Analyst Ivor Jones at brokerage Numis said William Hill was
better placed than smaller competitors to cope with regulatory
pressures and tax changes.
"We believe that William Hill is a market-leader which has
seen a trough in trading in the first quarter of 2014 and will
soon pass a peak of concern over regulatory risks," he said,
maintaining a "buy" rating on the stock.
($1 = 0.5953 British Pounds)
(Editing by James Davey and David Holmes)