Independent, The (London): William Hill gets off to a good start with 20% gain

THE BOOKMAKER William Hill saw growth in all three of its betting divisions in its first year as a listed company, despite a run of bad luck in its third quarter.

The group, which floated at 225 per share last June, yesterday posted a 26 per cent rise in underlying profits and signalled that the current year had started strongly.

David Harding, the chief executive, said the gross win - what the punter leaves behind - in the first nine weeks of the year was up 20 per cent, reflecting the group's drive to increase the number of ways customers can bet in its shops. He said some favourable results had also helped, such as "significant high-profile losses from Liverpool" and a few "slips" from Manchester United and Arsenal.

The group posted full-year profits before tax of pounds 32.4m, up from pounds 27.3m a year earlier. This was after exceptional flotation costs of pounds 49.1m, which included pounds 13.4m of float bonuses for management and 150 staff and pounds 29m of costs for refinancing the group's debts. Underlying profits rose to pounds 141.4m from pounds 112m on turnover up 37 per cent at pounds 3.4bn.

The group's star performer was its interactive arm, which more than doubled profits to pounds 20.5m. This division includes a fledgling WAP service and an online casino. Profits at its 1,600 betting shops rose 20 per cent and 12 per cent at its telephone betting operation.

The group said it benefited from a full-year of operating under a new tax regime, which switches the responsibility for paying tax from the punter to the bookmaker. Gross win rose 5 per cent to pounds 527.7m as more punters recycled winnings.

Mr Harding said he was "hopeful" that the Chancellor would move to end the disparity between online betting exchanges and traditional bookmakers in next month's budget by introducing a levy on gross profits made by exchanges such as Betfair and Sporting Options. He estimated that the exchanges - whose runaway success the betting industry puts down to them operating through legal loopholes - cost William Hill between pounds 5m and pounds 10m in profits.

Mr Harding said the group was continuing to roll out fixed-odds betting terminals (FOBTs) across its estate, despite the looming High Court showdown with the Gaming Board, scheduled for early this summer. He said roulette - which the Gaming Board argues should be classed as a casino game, not a bet - was the most popular product on its FOBTs. He expects to have 2,000 machines throughout his shops by June.

Tom Singer, the finance director, said that after buying two greyhound stadia in the past few months, the group was not eyeing any further sites. William Hill shares fell 7p to 210.75p yesterday.