Big advertising campaigns, big bets, and big profits are making William Hill one of the biggest bookmakers in the United Kingdom. Not only is the company pushing through in new directions, but William Hill shares have also been reaping the rewards. After celebrating their 80th anniversary, it is clear that William Hill shares are on the up, but are they worth going all in on.
After six years at the helm, it is clear that Ralph Topping has found the formula for success. Under his control the company has shown impressive signs of progression, moving on from the reliance they once had high street stores, they are now offering customers a notable online presence. Built upon a partnership with software company Playtech, the company has taken their online presence to Australia and America. This presence should help generate 40% of their income in the coming years.
International expansion is now of critical importance to UK based bookmakers. This is because tax laws in the UK are coming down hard in 2014, hurting domestically generated profits. The Machine Games Duty is going to restrict game based gambling in this country and if you own William Hill shares you need to understand the implications of it. Such tax helped contribute to a 7% fall in pre-tax profits, but that isn’t where the handcuffing ends for William Hill. Point of Consumption tax, a new online gaming duty, is set to cost the company between £60 million and £70 million in 2014, hitting their profits hard. If you own William Hill shares, then there is an argument for bracing yourself for a hit in the short term.
Sadly, crackdowns aren’t just coming from regulators, as there could be further governmental threats coming. Labour party head Ed Milliband has been rallying his troops behind a campaign against fixed odds betting terminals. The debate definitely damaged William Hill shares, as some investors went running upon hearing the news. Thankfully, things would eventually return to the norm as it became clear that William Hill wasn’t like the other bookmakers who were solely reliant on the UK. What is becoming clearer though is that the government have it out for the betting industry and are going to be relentlessly attempting to halt its performance?
2013 and 2014 have been somewhat costly for the William Hill brand, not because of their working performance, but because of new regulations being put in place. William Hill has seen the light through and is building their company in regions outside of the UK to compensate for this. By 2018 William Hill is predicted to be a £5 billion company, a £1.6 billion rise on its current market capitalisation of £3.4 billion. Investors who decide to bet on William Hill shares now have a lot to look forward to, as they should eventually see out government clampdowns. With a price to earnings ratio of 13.8, it might be time to go all in on William Hill shares and get on board with the brand as the rollercoaster pulls up.
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