Shares in William Hill soared over 11% early on Wednesday (2 August), after the bookmaker remained upbeat over its outlook and lifted its interim dividend, despite a sharp drop in pre-tax profits.
In the 26 weeks to 27 June, the FTSE 250-listed group saw profits before tax fall 7% year-on-year to £93.5m ($123.6m), largely due to "volatile" sporting results in the period and to the absence of a major football tournament this summer.
Adjusted operating profit dropped 1% to £129.5m, while revenue edged 3% higher from the corresponding period a year ago to £837m.
However, group chief executive Philip Bowcock, who was promoted into his role in March, was largely optimistic over the company's outlook, adding the bookmaker was on track to hit its target of £40m worth of cost savings by the end of this year.
"Our product improvements combined with improved marketing have seen both existing customers respond positively and the number of new customers start growing again during the period," he said.
"Internationally, our US business continues to perform well and in Australia [...] we are competing hard and diversifying our product range."
The company lifted its interim dividend by 4% to 4.26p and Bowcock added the bookmaker's online division had performed particularly well, with adjusted operating profits rising 32% to £57.2m. The segment, which now accounts for 35% of overall revenues, also recorded an 11% increase in the amount wagered, while net revenue was 5% higher than in the corresponding period last year at £290m.
"The fact William Hill has managed to deliver staking growth across the board means the future looks a bit brighter," said George Salmon, equity analyst at Hargreaves Lansdown.
"Online growth is impressive, driven by new innovations such as the 'your odds' feature, which links into social media. With cost savings of £40m per annum on track, the group should have plenty of ammunition for further improvements."
The strong performance in the online division offset a 14% drop in adjusted operating in the retail segment, where margins were impacted by a combination of punter-friendly results at Cheltenham festival and Royal Ascot and "very poor" results at the end of the football season.