William Hill share price jumps on hope Bundesliga betting turns around its fortunes
Bookmaker William Hill’s shares rose this morning on hopes that the return of Bundesliga football in Germany and horse racing will help it emerge from the crisis.
William Hill said total net revenue plunged 57 per cent in the weeks following the start of coronavirus lockdowns in Europe and North America.
The bookmaker has warned that it would suffer an impact of £100-£110m on core earnings if its high street shops had to close for a month and most sports events remained suspended until August.
Today, it said it was performing ahead of this scenario which now incorporates three months of shop closures.
“It is also becoming clear that the situation has not been anywhere near as bad as first feared with the government furlough helping, while the restarting of sporting events in the coming months could also offer some respite,” CMC Markets analyst Michael Hewson said.
William Hill shares rose more than eight per cent to 115p this morning.
The bookmaker said it expects each additional month of shop closures to impact core earnings by up to £15m, about half of its initial estimate, assuming the continuation of government support for furloughed workers.
The company also said its creditors had waived revolving credit facility covenants for 2020 and that it had reduced its cash burn to around £15m per month by cutting marketing spending, cancelling salary hikes and furloughing employees.
William Hill said it was encouraged by the return of live football – which accounts for approximately half of its online UK sports book, and horse racing – which contributes nearly a third.
The Bundesliga is expected to return behind closed doors this weekend, while horseracing has begun in France and is expected to resume behind closed doors in June in the UK.