(Reuters) - Bookmaker William Hill WMH.L reported lower first-half profit on Wednesday and said it was shutting 119 more shops as it shifts towards online betting and expansion in the U.S. market.
The London-listed company, one of the big names in the British gambling business, said overall revenue slumped by 32% as coronavirus lockdowns shuttered its high street stores.
However, adjusted operating profit of 11.8 million pounds ($15.4 million) was better than expected as it cut costs and international online grew 17%. The company also said its dividend will remain suspended.
Shares rose as much as 8.3% to 126.9 pence by afternoon trading after the company also pointed to a good start to the second half and said it would combine its UK online and retail businesses.
William Hill has been looking to offset the impact of tightening regulations in its home market and in July last year announced 700 store closures.
It said the closures announced on Wednesday would cost nothing and staff would be moved to other roles.
U.S. states have been legalising sports betting and William Hill’s momentum is likely to be boosted by the merger of casino operators Eldorado and Caesar’s, it said.
“We made excellent progress in our U.S. business,” Chief Executive Ulrik Bengtsson said on a media call, while also acknowledging challenges from the pandemic.
“It’s hard to deny that we are already in the second wave in the U.S. to some extent ... as long as major sport events are back, we are quite confident of how this business is going to develop,” Bengtsson said.
Sporting events, such as horse-racing, Britain’s Premier League and Germany’s Bundesliga and Major League Baseball, resumed in recent weeks, aiding bookmakers. William Hill has a Premier League betting partnership with Tottenham.
Jefferies analysts, who have a “buy” rating on the stock, said William Hill’s current valuation “barely recognises an appropriate valuation, let alone reflecting the opportunity in the U.S.”.
(This story corrects paragraph 10 to show that William Hill currently has betting partnerships only with Tottenham, not Chelsea, Everton and Tottenham)
Reporting by Pushkala Aripaka in Bengaluru; editing by Patrick Graham and Barbara Lewis
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