UK bookmaker William Hill PLC (LON:WMH) has posted a huge loss after writing down the value of its high street shops by almost £900mln ahead of new rule changes that will limit how much customers can bet on in-store computerised gaming machines.
Shares fell 2.1% to 183.6p early on Friday morning, having halved over the past year.
Last summer, the UK government slashed the maximum amount that punters could stake on fixed-odds betting terminals, dubbed the ‘crack cocaine of gambling’, from £100 to £2.
READ: William Hill blames UK high street as profits plunge
Even allowing for some “mitigation measures” to limit the damage, William Hill expects the rule change, which is due to come into force on 1 April, to dent its profits by as much as £100mln a year.
The betting firm said the government’s “unprecedented” decision has forced it to undertake a group-wide restructuring programme that will see it close shops and axe jobs. Over the next two years, that is expected to cost William Hill another £60-75mln.
The FTSE 250 company saw revenues rise 2% to £1.62bn last year (2017: £1.59bn), but it swung to a pre-tax loss of £721.9mln (2017: profit of £146.5mln) after taking an exceptional charge of £882.8mln related to the regulatory overhaul.
Divi cut but not scrapped
William Hill trimmed its annual dividend payout to 12.0p (2017: 13.2p) but repeated an earlier promise to keep the divi above 8p a share going forward.
“Against this backdrop, we delivered a good underlying performance in Online, strong growth in the US Existing business and a resilient Retail outturn in the face of difficult high street conditions,” said chief executive Philip Bowcock.
“We know the next few years will require careful navigating and investment, but with a clear strategy and diverse, experienced leadership teams in place we are ready to capitalise on the opportunities available to us.”