Bookmaker William Hill is still a ‘buy’ after purchasing a stake in NeoGames, increasing its exposure to the US.
William Hill reported its interim results today, announcing a slight increase in the dividend to 4.1p and the acquisition of a 29% stake in online lotteries company NeoGames for £16 million.
The results also showed revenues in the first six months remained flat at £808.1 million but pre-tax profit fell 11% to £131.3 million, due to higher regulatory costs and tax issues such as the new point of consumption tax and machine games duty.
Ian Forrest, investment research analyst at The Share Centre, said: ‘Those currently invested in the bookies will be pleased to see that the group increased its interim dividend slightly to 4.1p, and said it is seeing good momentum with its Australian business, despite having to write down some of the value.
‘Furthermore, the US operation is enjoying strong wagering and profit growth, while the acquisition of online lotteries group NeoGames will provide further exposure to the US.’
Forrest said the interims will provide investors with ‘some cheer’ but also make clear the impact of new taxes on the UK betting industry.
‘The good news is that William Hill is expanding overseas and online, so over the long run the issues in the UK will become less significant,’ he said. ‘Consequently, we continue to recommend investors ‘buy’ William Hill due to the potential growth in its mobile and online operations, while its selective international expansion should provide regional, regulatory and economic diversification.’
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