Jump to content

William Hill WMH


rimmy2000

Recommended Posts

I first tweeted about this share in November, when press speculation caused a spree of buying and very interesting price action.

 

1.png

I think this is the precursor for continued share price strength into December and the triennial review next year (http://www.telegraph.co.uk/business/2017/09/20/market-report-ladbrokes-rallies-hopes-benign-triennial-review/)

 

WMH’s share price collapsed from its 2013 high of 484p to a 2017 low 239p in August 217. William Hill is the age-old bookies, founded 1934, that accounts for 27% of OTC and retail bets placed. e.g. one in three bets placed on the high street are taken with WMH.

 

I have bought into WMH in the past for its reliable dividend, which has increased y-o-y since 2010, as we picked up from the 2008/9 FC. At the time, this offered a respectable 3% through 2012-15, and now stands at 4% covered almost 2x

2.png

I re-bought most recently August this year, buying again in September and October as the price appeared to bottom out and stall. It was then, and is now, -appearing very attractive.

 

The market cap stands at £2.4bn of which c£200m (eg 10%) is held as cash, WMH has an EV of £2.9bn owing to holding a bit of long term debt – which is nothing new to the company and is being paid down, amounting to around 3x PTP so nowt to lose sleep over.

3.png

 

Factors in its favour
a) Previous sector consolidation (Ladbrokes & Coral http://www.bbc.co.uk/news/business-33647635 ; 888 & Rank http://www.bbc.co.uk/news/business-37124207 ; ) William Hill has previously shaken off a £3bn takeover offer from Rank Group. (£3.50 p/s)

 

b) Industry M&A activity as recognised by WMH in their Annual Report ( https://www.williamhillplc.com/media/11250/wh-final-rev1-printall_2017-03-01_181358.pdf  pg 14)

‘Consolidation and scale…is becoming increasingly important, with companies investing millions in marketing and technology as well as paying gambling duties. This, combined with the potential for substantial cost synergies, is driving sector consolidation’c)

 

c) Previous rebuffed merger proposals (Amaya http://www.bbc.co.uk/news/business-37600887)

 

d) Treasury pressure and increasing likelihood the Gambling Commission stake review being far less imposing than “worst-case scenarios” suggest.

 

e) International expansion. WMH is a UK heritage company, but also a global brand, and can be found in the US and Australia. In fact, most recently there is talk that is could be selling its AUS business to Crown Bet (https://www.ft.com/content/fbb79e7c-d0ea-11e7-9dbb-291a884dd8c6 ) this segment worth 7% of turnover or £114m.4.png

 

 

On a fc PE of 12, this being the cheapest WMH has been since 2011, mostly owing to caution around the government review, is my suspicion. More typically, this trades on a PER multiple of 16x which seems far more befitting for a well-established high street brand with the heritage and pricing power that WMH commands. Looking at next years’ profit forecasts then, of 25.4p and averaging the company’s prior 3yr PER gives an implied value of £4.06p. Let’s call it £4 and that is scope for 38% upside.. yet a merger deal could take it a lot higher than that.

 

For those with patience, who don’t mind a flutter on the outcome of the commission’s review and looking for somewhere to earn 4% on their capital I think there are far worse things you can do with your money right now. The price continues to climb since my initial tweet, and the moving averages (for those into technical) are starting to align steady. There is a lot to play for.

5.png

Thoughts?

Link to comment

News out today which lifted the price further.  Now 22% gain. https://www.investegate.co.uk/william-hill-plc--wmh-/rns/agreement-on-nyx/201712070701076617Y/

 

On April 4th 16, WMH announced a ten-year commercial agreement with NYX Gaming, including the building of a new back-end platform for William Hill over the next three years, and an investment to support NYX's acquisition of OpenBet. This transaction is on track to be completed shortly. Scientific Games Corporation (NASDAQ: SGMS) then sought to acquire NYX. In turn, this led to threats of litigation in the US and UK.

 


Today's RNS sonfirms that 'Scientific Games has agreed to acquire William Hill's ordinary shares and convertible preference shares in NYX with William Hill receiving CAN$2.40 a share for the 6.8 million ordinary shares it owns in NYX and circa GBP87m for its convertible preference shares.'

 

Price has responded encouragingly to this news.

 

EDIT 21.15pm, closed up over 8% on day.

Capture.JPGBeen out all day but just seen LCL up 29% on day due to RNS. Snippet: 

The board of Ladbrokes Coral and the board of GVC (the "Boards") announce that they are in detailed discussions regarding the possible combination of the two businesses, following the receipt by Ladbrokes Coral of a non-binding proposal from GVC regarding a possible offer for the entire issued and to be issued share capital of Ladbrokes Coral (the "Possible Offer").

 

In my opinion, this increases the likelihood and almost certainty that WMH will be taken out later this year. It won't be a lone sitting duck. I'll look into the valuation proposed with GVC and LCL and infer what this means for WMH

Link to comment
  • 3 weeks later...

ok,  let's update this trade. From the first post the share has now gained 13%, which, given its been in play for a month is credible.

What's been happening:

Consolidation x2 (circled blue) these periods were chances to enter the stock or to increase the position.

Increased volumes traded (circled red) this provides increased confidence that the price is moving on volume alone and not the result of market maker activity, moving the price.

 

Stock continues to trade above its 20 day MA, and the 20, 50 and 100 are in positive formation.

wmh.JPG

Looking at the RSI, the stock is starting to look marginally overbought, and so we could see the price come off in the short term, as the run has been fair to say the least.

 

You will note I have been buying this earlier in the year, building a stake of five tranches of shares since around July 17.


What's next:

Anyone interested in gambling stocks will have a vested interest too in the upcoming Government gambling review. This will limit the stakes that can be gambled by [its] customers. Stakes could be cut to as low as £2 and although this is a worst-case scenario consensus seems to suggest that the value will arrive nearer £20. This outcome will have a significant impact on the businesses, and this is best understood by the proposal of GVC in buying Ladbrokes: here the base offer of £3.1bn has scope to move to £3.9bn based on the review, so a window of £800,000,000 at stake. I think the government will not reduce stakes below £20, based on arguments I have read (they need the gambling derived duty) so any surprise t the upside will be reflected in share prices.

 

Additionally, this leaves WMH vulnerable to more takeover offers this year. As stated in previous posts, merger deals involving WMH have been around before and rarely is there smoke without fire. Sterling has devalued since the Brexit vote so a US suitor would on that basis alone be getting a discount to previous offers. Consolidation is almost inevitable and the fact competitors are getting eaten-up will only make this more and more probable, imo.

 

So we could now see the share stagnate - we have a trading update on the 18th January, although I expect this will be rather mooted as the real news is the outcome of the DCMS review.

Link to comment

Is anyone else covering this company?

 

I note a broker upgrade today with target price 350p and an RNS Notice of Trading Update and Final Results

 

Results expected Thursday 18th January 2018.

 

The broker cites cases we have covered above: 

'views point firmly to a £20 max stake as a worst case scenario'

'the GVC bid for Ladbrokes Coral demonstrates that bids can be structured to cover the multiple potential Triennial outcomes'

'WMH as an obvious participant in the next wave of inevitable industry consolidation, in our view'

 

So is a takeover on the cards later this year. I continue to hold.

Link to comment

WMH this morning moves up 8p or 2.5%

Since I posted it has risen over 21% in little over a month.

wmh4.JPG

 

My overall gain here is 35% on purchase and healthy profits in more than one account. I am tempted to sell some and lock in profits, and ordinarily would. However our analysis of this was several factors colluding that would likely operate in its favour. Most recently the imminent announcement on US gambling laws. We know Trump is a Casino man.

 

https://seekingalpha.com/article/4136185-bet-now-u-s-supreme-court-green-lights-sports-betting-june

 

Instead I will follow the adage 'run your winners' and hold on. I believe there is more to come here yet...

 

 

 

Link to comment

Market is expecting an update this week on 18 Jan from WMH.


The previous strength in price is enough to convince me to continue with the hold. In the event of any material weakness I would (will) add to this position on the open. Howevevr I expect the results will be rather muted as the major outcomes of the future largely hangs in the balance of the Gambling Commission review.

I will add commentary to the results on the 18th.

 

 

wmh.JPG

Link to comment

https://www.investegate.co.uk/william-hill-plc--wmh-/rns/trading-statement/201801150700038070B/

 

  • Full year profit £290m expected
  • 11% up on 2016
  • ahead of expectations

 

'We are excited about the opportunities ahead in 2018 - a World Cup year - with our competitive position reasserted in the UK and with the potential for sports betting to open up in the US.'

 

A very encouraging statement.

Link to comment

well the WMH dog has its tail between its legs today and is down 12% currently, picking up a bit fro the low of day of 285p now trading at 295p.

 

This is due to hearsay rumors that the impending GC review will limit betting fees to £2 on those routlette-style terminals.

Personally (even as a WMH shareholder) I largely agree that the stakes right now are too high, and there is a lot of documented evidence that some people abuse them, and in turn get addicted to them. I don't really want to discuss principles in this piece, only to say that a £2 stake does appear to be taken negatively by the market, but equally this figure is not official until announced.

 

I sold a few off last week, see above post ^, and continue to hold..

 

Link to comment
  • 5 weeks later...

So a quick update on results and the price reaction yesterday. 

 

https://www.investegate.co.uk/william-hill-plc--wmh-/rns/final-results/201802230700047205F/

 

Initial reaction saw WMH open 2.8 percent lower, but the share actually ended up on the day. Buying seems to be relentless in WMH, the previous drop was bought back, and is now again returning to its previous highs. It seems like the momentum may be set to continue, of course the impinging review will have the major impact, so we could expect volatility when this is published, but I would personally be buying into any more shake outs.

 

So onto the Friday results.

One of the main aspects I noted the release was an exceptional charge of over 238 million pounds on its Australian operations for 2017. William Hill expanded in Australia in 2013 through acquisitions, and it looks like this division os going to be divested soon enough.

William Hill is currently carrying out a strategic review of its Australian business, which is due to be completed by mid-2018, and Investec say they see a sale as “very likely” probably for a price of between 112 million pounds to 84 million pounds.

 

This write down resulted in reporting a pre-tax loss of £74.6m for 2017, compared with a profit of £181.3m the year before.

So this looks quite negative (hence the initial drop perhaps) but if we regard this as exceptional, then the picture looks quite different:

 

  • Underlying performance had improved.
  • Net revenues rose 7% to £1.7bn, while adjusted operating profit climbed 11% to £291.3m.
  • Revenues from its online business rose 13%, which bode well given the investment MWH has been making into its online proposition.
  • Adjusted operating profit for the 52 weeks rose to £291m, up from £261m previous.
  • Growth at both online and high street retail businesses was above market rates.

wmh.jpeg

This leaves us looking at a historical reported EPS that has grown 24%, over the 12 months, to 27.6p. Put that on a 3yr average PER of 17 and we get a price of £4.69. and if the 2018-19 year can provide a 24% EPS growth then who knows. (we could speculate but there is little point, inherent value has been shown)

 

No doubt potential suitors are eying-up these figures and biding time for the review announcement.

Link to comment

Took a tough decision and exited one position of WMH today, a total gain of about 26% was achieved. The remainder of my hlding will remain as the case above has not changed, and I think this will re-rate based on the outcomes described in the original post.

 

So why sell? Well there is a sense that the market is ever more toppy and I wanted to have some cash around should we see further weakness in the market.

 

For that reason, I sold a few thousand WMH shares today. Incidentally, it has not just been WMH that I have sold, but other shares where I am disproportionately invested, and where I have fairly stagnant or smaller holdings.

 

 

Link to comment

We have news today > https://www.investegate.co.uk/william-hill-plc--wmh-/rns/disposal-of-william-hill-australia/201803060700057969G/

 

typically, WMH closes 2.7% up today, after I part sold some yesterday *rolls eyes*

 

So in a nutshell then, the Australia division - which as we saw was being pressured by regulatory imposition, has been sold off, or an agreement in place to do so to CrownBet.

 

I like this because it helps to simplify the business in line with its Strategic plans, and also releases capital the group can deploy to further its vision. The proceeds - some $300m AUD works out as £169m GBP, so about 10% of 2017 revenue.

 

Clearly, the market welcomes this news.

Link to comment
  • 2 weeks later...

WMH jumped 4-5% today on news the gambling commission produced its recommendations in a paper on the future of the industry and changes it advises the industry adopts.

 

The key points to note are:

  1. Advising that electronic machines should be capped at £30 per play (it is widely accepted the current £100 figure is too high)
  2. Slot machines (fruit machines) to have a maximum £2 stake.
  3. Other measures for the industry to demonstrate improved compliance and cooperation to protect consumers.

The case is now in the hands of DCMS – to advise on these recommendations, to either adopt them or decide if they are too far one way or another.

It is suggested that the Treasury obtain upwards of £1.8bn of tax income, and therefore are the government is in a bind really: implement reduced caps and obtain less tax receipts or leave as it is and be viewed as being unsympathetic to gambling consumers and not strong-armed on the industry.

In terms of an investment proposition, clearly the risk is present, both Ladbrokes Coral and WMH gained today, which tells us the outcome of these measures will affect the whole industry, and the prospect of more regulation is making investors tetchy.

I continue to think WMH is attractive from an investment perspective, and a 4% hike in the price today suggests the gloom is exaggerated.

  • Market Cap is now £2.86bn
  • f/c Yield at 4% or 13.5p in 2018 rising to 22.8p in 2019
  • Est 2018 PTP @ £286m and 2019 @ £254m (clearly these estimates may be reviewed as the guiding figures emerge from the review. I say this because clearly profit growth is currently forecast to be flat in 2019, but forecasting out this far is pointless given the situation) (EG PER of 10 this year)


Lastly, don’t forget we also have a review of US gambling laws under a Trump administration and the prospect of a takeover surfacing again.

Link to comment
  • 4 weeks later...

Something is brewing here. Up 2% today and nearing those highs again.

 

The average daily traded volume of WMH is about 6-7m shares. Look at the spike in volume yesterday, in the chart below. This is looking back eight months.

 

wmh2.JPG

Additionally, looking at a table of volume, we see yesterday 57.18m traded, compared to around 4-5m in the prior days.

 

wmh.JPG

I don't have much time to write at the moment as busy on committee for a large investor conference and holding down a job, but to me this is probably not insignificant!

Link to comment
  • 2 weeks later...

Morning,

 

Been a while posting here as really hectic elsewhere in my life(!) but not the chart below  and yes, seems to always dip back to significant levels. This time is was a news triggered announcement that Treasury may accept the DCMS proposal of reducing betting terminal limits to £2 per play, the lowest of the possible price points, and lower than the GC recommended which I wrote about above ^

 

Well it seems as this may be the preferred stance for any would-be investor to take: better to err on the side of caution and be proven wrong to the upside, than be a dflated optimist, imo. And Until we know the likely outcome then we are all jsut speculating. My position is held (minus those where I top sliced as reported above ^) and I continue to hold *tempted to actually re-buy.

 

I spotted a Paddy Power RNS yesterday in their Q1 update which is relevent:

"Ahead of the expected introduction of new taxes, competition remains intense and market consolidation has commenced. We have reviewed our investment plans and see an opportunity to compete more aggressively to take advantage of the potential disruption to competitors. As a result, we are increasing investment in promotional generosity and marketing activity."

 

his was the original rationale and nothing has changed.. we wait.

 

Did anyone here attend Mello 2018 event in Derby? It was a fantastic event.

Link to comment

So WMH updated the market today. 

It is also worth noting that they hold their AGM today at 11am, which is central London, near Tottenham Ct Rd. I thought about going but cannot due to other commitments. 

 

We can take some reading from the trading update and I expect the AGM will also influence the direction later in the day.

Key points to note are:
Trading to 17 April  has seen 3% growth in Group net revenue with strong Online and US performances, partially offset by Retail IE shops are a drag on performance.

 

Online net revenue up 12% with Sportsbook up 17% and gaming  also up 8%. Retail net revenue is down 4%,  with Sportsbook down 9% and gaming flat. I note WMH also sponsored the big boxing fight at the weekend where Haye got knocked down two or three times by Bellew. -  WMH are still influential in the retail sportsbook market and events like this help them realise their strategy.

 

The comments state "positive start to 2018, making further progress against our strategic priorities to grow UK market share, drive international revenues and deliver key transformation projects."

 

There is some talk of the impending legislative influencing factors:  ‘while we await the outcome of the UK Triennial Review and the Supreme Court's decision on US sports betting legislation, we remain focused on continuing to deliver a great customer experience, particularly ahead of this summer's World Cup.’

 

wmh.jpeg

Intra-day the price has bobbed about a bit. Note as our contributor  has pointed out, WMH seems to stick closely to key levels and these were tested today. Overall the commentary is good and the balance sheet and business model simplified by the Australia disposal. Let's see what happens rest of the day..

Link to comment

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • General Statistics

    • Total Topics
      15,694
    • Total Posts
      75,102
    • Total Members
      63,111
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    gt_kit
    Joined 31/07/21 09:34
  • Posts

    • The new CDC Massachusetts study is drawing a lot of attention. The CDC is using it to promote mutant risk but there is a lot more to the story. - 74% of 882 people infected with coronavirus in the US outbreak were fully immunised but only 50% of US are fully vaxed suggests the vaccines are making people more susceptible to infection (which indicates vaccine ADE). - The viral load was found to be the same for the vaccinated and non-vaxed alike which would suggest the vaccine was not offering any protection at all (which indicates vaccine ADE). - Most of the 74% were symptomatic, such a high ratio of symptomatic/unsymptomatic for the delta variant would suggest the vaccine was compromising the immune system making symptoms worse (which indicates vaccine ADE).   Meanwhile, a CDC Internal Document: “Universal masking is essential to reduce transmission of the Delta variant” This is nonsense, masks can only stop droplet borne virus not virus as aerosol. An infected person will breath out 50,000 with each breath and they float on air, travel much more than 2 meters, and around perspex screens, and through the weave of a mask. UK lifts mask mandates at the peak of new cases ... and immediately the curve collapses.   .  
    • Main stream media are waking up to the fact all is not right concerning the vaccines. The fully vaxxed are the majority of new cases. No one is as yet coming out and saying vaccine ADE but all the indications are pointing that way. So far all the blame is being heaped solely on mutants but that can't be the whole story. Vaccine ADE enhances the virus while compromising the immune system. CNN @CNN ''Vaccination alone won't stop the rise of variants and in fact could push the evolution of strains that evade their protection, researchers warned.''  Vaccination is not enough by itself to stop the spread of variants, study finds - CNN    'Study finds 74% of outbreak sufferers were fully vaccinated'. (US is only 50% vaxed) Outbreak of SARS-CoV-2 Infections, Including COVID-19 Vaccine Breakthrough Infections, Associated with Large Public Gatherings — Barnstable County, Massachusetts, July 2021 | MMWR (cdc.gov) ('Breakthrough infections'' is a term meaning infections in vaccinated people)   CNBC @CNBC 'CDC says 74% of people infected in Massachusetts Covid outbreak were fully vaccinated.' JUST IN - 'More than 110,000 breakthrough cases in the US' (Bloomberg)   And from SAGE yesterday evening; ''JUST IN - SAGE, the UK's health "expert panel," warns next Covid "super mutant variant" could kill up to one in three people, and the "vaccine roll-out may even speed up mutant strain's emergence." (Daily Mail) The last half of that headline is a clear indication they at least suspect vaccine ADE. SAGE: Next Covid variant could kill one in three people | Daily Mail Online   Safe vaccines, the ones that completed their long term trials before roll out don't cause 'super mutants'. We are starting to see why Dr Robert Malone was calling for the vax programme to be stopped immediately in the video posted above.   Pfizer now saying vaccines will not be enough so as well as perpetual booster jabs they are developing oral antivirals. (oh - like Ivermectin you mean - can't use that, it only cost a few cents) Pfizer Inc.  @pfizer  Alongside vaccines, success against #COVID19 will likely require #antiviral treatments for those who contract the virus. We’ve started a Phase 2/3 trial to evaluate a potential oral therapy that will enroll over 2,000 participants infected with SARS-CoV-2:   So the vaccines don't actually work then except to incapacitate your immune system and create super mutants.   And in another new twist Social Media are quietly starting to remove the warnings they habitually place on posts that might, even slightly, be construed as anti-vax. 🤔   .edit bad pic crop.  
    • OK - I think I'm going to leave this thread here for the time being - its covered a lot I want to end it on a very very advanced concept - Gann related obviously! Gann was light years ahead of his time, the below is going to prove this fact, his methods were esoteric and he was beaten to these laws of the world by the Egyptians (you'll see the shape in the images below) The markets are not doing what you think they are doing - there's forces you are not aware of at work behind the scenes driving prices on ALL markets This post is to get you thinking - I'm not making any claims, but the other day on a EURUSD thread I did highlight a buying zone of which price has "suddenly" rallied upwards from! In the chart below we'll look at the 4  points shown on the chart 1-4, because these have been recent major swing points - I want to show you what Gann was thinking and talking about over 100 years ago - I will keep it as simple as possible This is Gann's "Square of 9" - look at the shape of it on a top down view - its basically the Pyramids! (TIP: Imagine pulling the centre number shown up towards you to visualise the concept) Basically this is a square root calculator - as you go up or down levels around the sq or 9 you going through increments of square root %'s - there are major intersections of the square and those are shown on the images as the yellow painted sections - north, south, east, west etc - see where price lands on those lines around the major turns I think we can agree totally, from this entire thread and what I'm showing you below that Gann and his methods have massive significance on the markets and as traders that means profiting from.  This is EURUSD Daily Swing High #1: OK we get a major swing high price of 12350, this gets inputted into the Gann sq or 9 as the CENTER/PEAK of the square - the calculator then generates all the levels around that price according to the maths of the sq of 9 - see chart We have NO idea prior which levels "might" cause resistance or support and we don't know when either - what we DO know is that the major intersection in YELLOW "could" do something - the thing is we are aware of these levels well in advance and before price gets near! So from the top at 12350, prices falls to a low of 11952, then rallies to 12243, then falls to 11835, rallies then falls into the swing low #2 of 11704 I've highlighted the relevant prices on the Gann sq of 9 below for you - EACH swing turn point was 2 pips - 2 pips off the yellow highlighted price levels - take a minute to think about that 2 pips from price levels worked out yonks in advance by a method of a trader from over 100 years ago, that he discovered from studying the Egyptians who built temples to the fact thousands of years prior! OK coincidence? Coincidence - I think not, here's the next chart of the swing UP from 2-3 We have a LOW of 11704, rally to 12150, low of 11986 and then the swing high #3 at price level 12266 Again we have price finding support and resistance at price levels within pips of the major intersections on the gann sq of 9 OK last swing 3-4 High of 12266, low 11847, high 11975, low of 11805 I don't think I need to say anymore From 11805 here's the square of nine numbers to which the market might find support/resistance from (Remember the YELLOW lines are the major points to watch) - IF 11805 is the swing LOW The square of Nine is more deep than this - the positioning can be important too - for instance 1st gann sq of nine chart above in the post, follow the numbering from the 11835 LOW around the square until you get to the swing 2 low of 11704 - its moved out to the next level but on the same line sequence as the low and up nearly opposite the first low of 11952 and within pips of a major intersection  I can tell you that most markets adhere to the square of Nine - however, there's a huge amount of things to look at, consider and apply so we won't go any further into this As with ANY method, do as I've done, test it, if you understand it and it fails, dump it - I could go on showing coincidence after coincidence of the square of nine - I just wanted to show you that there's reasons markets turn at specific points "out of the blue" - you'll get people mentioned support and resistance as throw away comments (usually Fibonacci levels that they don't really understand!)  Successful Trading THT  
×
×
  • Create New...