William Hill suspends dividend as earnings predicted to fall by £100m

London-listed betting and gaming operator William Hill will pay no final dividend to shareholders for the first time in a decade as the company works to minimise the impact from cancelled sports events due to COVID-19.

William Hill said late Monday that it could see a £100m to £110m reduction in 2020 EBITDA as a result of cancelled or postponed sports due to the coronavirus, assuming a return of UK and international football in August and resumption of the NFL season in September.

This estimate also includes one month of UK retail closures, cancellation of the Grand National and Royal Ascot horse racing events, and postponement of the UEFA European Football Championship to 2021.

“In light of the ongoing uncertainty created by COVID-19 and following recent developments to postpone or cancel sporting events and close US casinos, we anticipate a material impact to the Group’s revenue and earnings in 2020,” the company said in a statement. “53% of our 2019 revenue was generated through our sports book business.

“If the outcomes outlined above transpire, EBITDA for the Group is expected to reduce by £100m to £110m. Currently horse racing and our retail shops remain open,” the company added. “An additional month of closure impacts EBITDA by £25m to £30m.”

As a result of the lower predicted earnings and having lost more than 50 per cent of its share value since the start of the year, William Hill is suspending dividend payments until further notice and no final dividend will be proposed for 2019.

The company added that its performance before the impact of COVID-19 was ahead of expectations and that it continues to maintain a robust financial position with an undrawn revolving credit facility of £425m.

It also acknowledged a number of mitigating activities available to the company to reduce its variable cost base and manage cash flows efficiently, with those actions now underway.

“These are truly unprecedented times but William Hill has been around for 86 years and over that time we have gained huge experience and understanding of our customers,” said chief executive Ulrik Bengtsson. “People want to place sports bets and they will continue to do so where possible. In recent days we have seen betting on horses, greyhounds, international football and our well-established virtual sports.

“We are taking action to maintain our operational capability, to secure and enhance our liquidity and to ensure we are in a strong position to resume full operations when the sporting calendar returns to normal.

“We have been quick to initiate our business continuity plans, which have been in place for some weeks, with our colleague’s and customer’s welfare highest on the agenda,” Bengtsson added. “Large parts of the business continue to operate on a ‘business as usual’ basis.”

William Hill last failed to pay a dividend in 2010.

Shares in William Hill plc. (LSE:WMH) closed 25.54 per cent lower at 65.94 pence per share in London Monday and were trading up 1.76 per cent at 67.10 per share early Tuesday morning.