William Hill books top rank
WILLIAM Hill leapfrogged Ladbrokes to become Britain’s biggest bookmaker yesterday by buying Stanley Leisure’s bookmaking operation for £504 million. However, there was some stock market disappointment that, as a result, Wm Hill announced it was scrapping plans to return £453m to shareholders via a share buyback - a manoeuvre which increases the earnings of the fewer shares left circulating. Hill also issued a downbeat trading update and its shares closed down 2.8 per cent, or 14.5p, at 510.5p - the biggest faller on the FTSE 100 index.
By contrast, shares in Stanley Leisure, Britain’s biggest casino operator, closed up 2.5p at 524.5p after the group said it would probably return about £300m to shareholders. Yesterday’s deal covers 624 betting offices in Britain, Ireland, the Isle of Man and Jersey and takes William Hill ahead of previous market leader, Hilton Group’s Ladbrokes. There is little geographical overlap between the two companies, with Hill skewed heavily to the south of England and Stanley’s heartland being the north-west of England. "We can return at least £300m to shareholders and still have an ungeared balance sheet," Stanley’s finance director, Colin Child, said. Bob Wiper, Stanley’s chief executive, said the group would retain and develop its international betting shops, but could sell its online betting operations following the deal. "In terms of our e-businesses, we’ve said we’ll review them in the light of this disposal, but we don’t visualise them having a long-term future in the group," Wiper said when asked about plans for www.stanleybet.com.
It means Stanley will in future focus on its casino operation, with more than 40 outlets spread across Britain. Hill said that in the 19 weeks to 10 May, its gross win had been level. "We’ve had quite a protracted run of bad horse racing results and bad football results," said Hill chief executive, David Harding. "And we’re looking at tough comparatives up until July," he added, referring to last year’s Euro 2004 football championship, which generated £11m of gross win. Harding said £13m of cost savings would be extracted from the Stanley deal in 2006, including job losses at Stanley’s headquarters and £5.5m from improved performance at its shops. Between 30 and 50 shops might have to be sold to address competition concerns, he added. Wiper said a handful of other parties had expressed an interest in Stanley’s UK and Irish betting shops, but an exclusivity agreement with William Hill had prevented them from talking.
William Hill leaps Ladbrokes to become Britain’s biggest bookie with purchase of Stanley Leisure. • Hill, heavily concentrated in south of England, moves into north-west England, Ulster and Irish Republic. • Predicts pre-tax synergies of £13 million in financial year to 26 December, 2006. • Completion of fixed-odds betting terminal roll-out and improvement in product mix. • Stanley to focus on casinos.
2005-05-12
