According to Racing Post today Sportingbet (Paddy/Betfair) and a Canadian company are the two remaining bidders for the WMH Aus business after LadCor and Bet 365 dropped out. Therefore can assume that:
1) It was for sale all along.
2) We could lose Mr Waterhouse who might have been a CEO in waiting.
3) From the results statement, it is unlikely that any of the bids were close to the (alleged) £200M asking price.
4) This could be a zero sum equation if PP/Betfair win, as they could have less in the pot if US legislation changes but we will be in credit by the same amount.
I'm sure that you are right, but the reason I use my method is because any bookie will have enormous liabilities. Whilst deposits and "unpaid"/uncollected bets sit on the accounts shouldn't they be deducted from the "actual cash" ? When I worked for Mecca, about a trillion years ago, our daily accounts sheets basically showed cash takings less cash paid out. Therefore all unpaid bets and cash deposits would effectively be losers until someone claimed them.
I used the "Current Liabilities" and "Non-current Liabilities" sections. They both give an increase in debt. Would I be correct in saying that the "net debt" figure, which is quoted, only refers to some financial instruments but not scheduled trade/bonus/regulatory etc. outstandings ?
As normal, am happy to be wrong!
I was a bit unclear about your comment about debt. As I read, net debt reduced by £100m or so, but £75m of this was down to an increase in trade creditors. There as far as I could see no reason given for this in the blurb.
As with every company under the sun, business as usual costs are treated as exceptional so as to try and flatter. Nobody is fooled.
I can't find any hidden nasties, although I'm not sure which onerous contract has cost us £10M. The Australian good-will write off had been flagged earlier, although I am not sure why a company showing an operating profit has increased its debt overall. Dividend increase is a major mistake because we should be keeping our powder dry for regulatory outcomes such as US and FOBTs. Seems it has just happened to keep shareholders happy after (previous) board cost us millions in fines. If circumstances , which are outside the board's control such as £2 limit, lead to a significant drop in SP then we could easily be paying 6-7%. Clearly, a div. cut would drive this down further.
Just out of interest, where does the dividend income of shares in treasury appear as it looks like it was "paid" ?
There was every incentive.
As was pointed out by me during, and after the 2015 AGM, that unless we keep our staff, and end most single manning, our position as a company with an exceptional reputation of integrity would come under pressure. There were reasons that we got the Nevada licenses, whilst others failed.
Now we have a heavy fine, which won't really effect our "savings", caused by inadequate staffing. Unfortunately the words "criminal" and "money laundering" appear in the judgement which can not help any future dealing in the US, where, a few days ago, we were in the strongest position.
I hope that the newish board can dig us out the mess left by some of their predecessors.
A gambling company has no incentive to ensure that it has good responsible gambling controls unless the regulator makes it worth their while with sufficient fines and bans.
The reality is that gambling companies have barely ever taken pro-active measures to be sure that clients who display conduct which may be indicative of problem gamblers are approached to a) find out if they have an issue or b) to confirm the source of their funds.
I have spoken for years on this as to how a large part of WMH's business may come from those with problem gambling.
This investigation has addressed those who are staking large amounts, but for every case like this I am sure they are many more of people who gamble away their benefits or wages due to their problem, with WMH doing little to nothing to protect this individual.
Time to wake up, this is a huge problem to which WMH has just paid lip service to it. Now will come back to bite.
Why no RNS as this is obviously material to bottom line? As the "cause" was stated as being , effectively, staff shortages before the latest round of job cuts, can we have a statement from the board that running the company properly will be its main priority,...rather than awarding themselves bonuses based on "rationalisation" ?
Shares in William Hill (WMH) tumbled yesterday after The Sunday Times reported the government was set to slash maximum stakes on controversial fixed odds betting terminals.
The shares closed 11.6% lower at 297.2p on the report, which claimed the government was set to cut the current £100 limit to just £2.
But The Share Centre stuck with its buy rating on the news. We continue to recommend William Hill as a buy for investors due to the potential for further growth in mobile wagers, expansion into overseas markets and the prospect of further efficiencies within the business, said analyst Graham Spooner.
Obviously the potential for further regulatory changes, both in the UK and Australia, along with increased taxes remain concerns so we regard the stock as higher risk."
It has been reported in Guardian that two major bookies (Assume LadCor and WMH) are considering judicial review, whilst third biggest does not have enough money, but might join in combined action. If 3rd biggest is BetFred, who bought Tote estate with at least one eye on FOBT locations and will soon lose Tote monopoly, then this might be a symbolic "For Sale" sign going up. The significance of this is threefold. Fred Done, allegedly, liked a good donation to the Tory party. He was announced as "Winner" of Gidiot's Tote sale, despite the fact it was donated to the state in perpetuity to benefit racing - If it just ceases to exist in any form then the government, who originally agreed to be guardians of its existence, are going to be in a strange place legally. Thirdly, the disappearance of a big bookies chain from the High Street will disadvantage punters as a whole, but it is hard to see what the competition authorities can do about it.
If WMH get £200M for their Aus assets, this will be a clear demonstration that they will not stick around if they feel that they are being legislated against unfairly. WMH is the first chain to start streaming live greyhound racing so you can bet on it without going near a retail establishment but still have some of the advantages. In five years time could they halve their retail estate if their attempt to relocate customers online is successful, and there is no churn?
To me, the only game in town is the widespread legalisation of gambling in the majority of American states. Trump needs something to compensate each state if his tax plans go ahead, and legalised betting looks to be a low hanging fruit if the moral argument is that it is taking money away from gangsters and giving it to schools.
You cannot expect MP's (even those serving a Newmarket constituency) to understand gambling and the mentality of punters.
If the MP for Newmarket reduced FOBT's to £2 per go, then horse racing will lose 40% of its revenue. The reality is that there is far too much racing; what with foreign and virtual reality racing, a race goes off every five minutes. Nobody is interested. Walk into any betting shop and you will see approx three people playing the FOBT's and nobody betting on the horses or dogs. The truth is that FOBT's subsidise horse racing.
If MP's did any research they would know that William Hill et al don't want punters betting on the horses and football in betting shops; they offer significantly better odds if you bet on-line.
Reducing the stake to £2 will obviously also reduce the amount that can be won on a winning line; this will not be attractive to FOBT players and they will take up other forms of gambling, Thousands of betting shops will close and thousands of staff earning the minimum wage will be on benefits. Add the reduced betting revenue to the addional cost of benefits and the government will lose billions of pounds.
The trouble is that they are stupid enough, so a £2 limit could well happen.
Obviously, something has to be done about problem gambling; therefore a fair compromise would be a £20 limit, enough to keep the FOBT's players still playing, yet reducing their losses by 80%
But, as I said, when did this government make any rational decisions?
Report in Racing Post that stockbroker Davy consider that judicial review possible if £2 max goes ahead as consultation period not yet completed. I suppose that bookies will have 23 hours to find some evidence that by any stretch of the imagination could be considered significant. Is it possible that the max stake could remain at £100 for another year whilst the wheels of justice grind on? Matt Hancock's Wiki entry does not paint him as being the brightest, or most discreet, MP ever.
Possible, but unlikely. The news story is as much about Hancock apparently making a decision before all the evidence has possibly been submitted and his new plan to divert FOBT money to betting on horses. Perhaps he has got a hat from which to produce a rabbit, but finding £1bn for The Treasury and up to £100m for his constituency (which includes Newmarket) is going to be problematic. On the other hand it could be that Hancock was mates with Adolph , and they've just found another volume of the latter's diaries.
...said that £2 max. stake for FOBT had been decided, even though submissions do not finish until tomorrow. Prior to that, most recent rumour was £10 per play and a decrease in the numbers of plays per minute. ST may well be right as they are going to look really stupid basing their story on a "friend" if they are wrong. On other hand, The Times story about the cost to NHS of FOBTs was about 100,000% out.
Is this a profits warning in disguise? Aus has deteriorated from last , awful, notification so we could be looking at a massive write off. If this has also trashed Bet365 figures then I suppose that there might be merger speculation. Everything else looks OK , but the devil will be in the detail. Everyone knew about favourable results from previous advises to market from other gambling companies.
Will need a lot of clarification. WMH top Aus, Tom Waterhouse, was not exactly overjoyed when CrownBet joined several bookies campaigning to ban credit betting in an attempt to boost their companies' reputations with regulators. Even so, one possible benefit would be a combined lottery.
silchester international investors ,London based investment co , now owns 5% of WMH .they specialize in turn around co's .... other big stakes they have include morrisons & pearsons . we await October to see if the damage to come is bearable or not
"High street bookie LSE:WMH:William Hill shares have been short of backers in recent months, not least due to fears over a looming regulatory crackdown on gaming machines.These fixed odds betting terminals (FOBT) are such a major revenue stream ..."
The Investec profits crash never materialised. Credit doing OK. Most other pieces of news are shocking. Assets being sold at less than book value would indicate there will be a nasty shock down the line. Retail is awful - they have had a free run at LadCor and Betfred during their rights disputes, but profits are down. Australia profits are reduced to almost zero, so we're not covering interest on loans. EPS down but div up - Why? Much is being made of the £40M savings, possibly being made by being the worst major employer in the UK, but little about the increase in "management" costs. What has happened to all their expensive "projects" such as Old Street and US lotteries ? Have they just stopped ?
The only good news is that there is little disastrous news which presently could sink the SP, so the recent sell-off looks overdone. Unlike a turkey that is being fattened for sale within the next few months.
Did I miss the announcement that our chairman will be replaced this year ? If it was made in February then was it it wise to subsequently announce his choices of CEO and COO ?
According to the Telegraph it's William Hill.
Sports Direct don't even make the top ten. Shame on our board and their bonuses over the last two years whilst destroying staff moral. I asked about this at the AGM three years ago and got all kinds of nonsense about staff never being forced to work alone. Or lacking support if there is a problem but no one is "available". Or being forced to evict someone twice their weight who is trying to trash a FOBT. All the statements made by the then CEO and chairman turned out not to be true.
Sky Bet and Sun Bet are both part owned by Murdoch who has been trying to launch gambling websites off the back of other ventures for years. So far as I'm aware both use a platform provided by a WMH owned company - happy to be corrected! Sun Bets has been showing horrendous losses recently and so I think that it is doubtful that cash is going to be shelled out for any online proposition, especially as Sun Bets are linked to TABCORP and 80% of Sky Net was sold to CVC.
As for Israel, this sounds like a hangover from our connections with Teddy Sagi. Obviously something was left over after our rights issue and a week sniffing around Playtech. The new WMH CEO probably sees this as just another rationalisation and he has his own plans for digital...which leads to the drop in SP.
Investec have supported WMH for years so it probably cost the share price about 10% when their "advice" went from BUY to HOLD. Now they have gone SELL based on their information that profit margins in all 4 sectors will have shrunk drastically in the last quarter. I assume that there must be some evidence for them to make this statement although I don't understand why Betty Power and Ladbrokes are relatively unaffected. Something nasty might be coming out of the woodwork in the next week or so.
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