Shares in betting firm William Hill were down on the FTSE 250 and are a recommended buy after a successful World Cup mixed with a "disappointing" performance from the group's core horse race betting business.
In the second quarter ended 29 June the company saw "the continuation of positive net revenue trends for the group as a whole". Net revenue was reported as being up by around three per cent in the year to date and pre-tax profit for the first half is expected to be around £135 million, flat from the previous year.
William Hill Online had a strong first half with net revenue growth up around 24 per cent and operating profit rising around 43 per cent from the previous year.
The group's OTC Retail business saw a "very strong" World Cup performance in June, while machines also performed well, however the company made a loss at the Royal Ascot festival and had a weak Grand National. Overall retail turnover was up by around seven per cent however net revenue dropped one per cent.
William Hill's Telephone net revenue dropped by 33 per cent thanks to the poor horseracing results, leading the company to say it expected the division to make a small operating loss.
Ralph Topping, Chief Executive of William Hill, said, "Whilst it was our worst ever Royal Ascot, with a loss on the meeting, the World Cup proved to be one of the best for bookmakers in 40 years. Overall, we have seen a good Group performance in the period, with a particularly strong contribution from William Hill Online."
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers commented:
"Unfortunately, where the group has given with one hand, it has taken with the other. The football World Cup has been a success, gaming machine revenues continue to grow, whilst its somewhat late move to focus on internet betting continues to gain traction. However, the group's former core horse racing business has disappointed, while the tax benefits enjoyed by offshore rivals are seen by management as disadvantaging the company.
In all, today's update is likely to leave investors feeling apathetic. A near 8pc underperformance for the share price against the wider FTSE-250 index over the last 3 months continues to reflect the group's exposure to an uncertain consumer environment, although a supportive dividend yield and faith in management's ability to eventually inject positive momentum currently underwrite a favourable (buy) market consensus opinion."
By 08:41 shares in William Hill were down 0.22 per cent on the FTSE 250 to 178.50 pence per share.