LSE:WMH

Stock Analysis Report

Executive Summary

William Hill plc provides sports betting and gaming services in the United Kingdom and internationally.

Rewards

Trading at 42.3% below its fair value

Earnings are forecast to grow 43.99% per year

Became profitable this year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 7.29% is not well covered by earnings

Large one-off items impacting financial results



Snowflake Analysis

High growth potential average dividend payer.


Similar Companies

GVC Holdings

LSE:GVC

Share Price & News

How has William Hill's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WMH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

WMH

-0.6%

GB Hospitality

0.5%

GB Market


1 Year Return

4.6%

WMH

16.1%

GB Hospitality

7.0%

GB Market

Return vs Industry: WMH underperformed the UK Hospitality industry which returned 16.1% over the past year.

Return vs Market: WMH underperformed the UK Market which returned 7% over the past year.


Shareholder returns

WMHIndustryMarket
7 Day-2.6%-0.6%0.5%
30 Day-5.8%-3.4%-0.3%
90 Day-12.3%-1.7%0.4%
1 Year11.1%4.6%19.5%16.1%12.6%7.0%
3 Year-33.7%-43.4%34.4%20.5%18.7%3.6%
5 Year-39.3%-51.9%57.0%32.3%41.8%9.3%

Price Volatility Vs. Market

How volatile is William Hill's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is William Hill undervalued compared to its fair value and its price relative to the market?

42.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WMH (£1.65) is trading below our estimate of fair value (£2.85)

Significantly Below Fair Value: WMH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WMH is poor value based on its PE Ratio (56.4x) compared to the Hospitality industry average (26.2x).

PE vs Market: WMH is poor value based on its PE Ratio (56.4x) compared to the UK market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: WMH is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: WMH is overvalued based on its PB Ratio (4.6x) compared to the GB Hospitality industry average (1.5x).


Next Steps

Future Growth

How is William Hill forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

44.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WMH's forecast earnings growth (44% per year) is above the savings rate (0.5%).

Earnings vs Market: WMH's earnings (44% per year) are forecast to grow faster than the UK market (12.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: WMH's revenue (3.7% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: WMH's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WMH's Return on Equity is forecast to be very high in 3 years time (54.3%).


Next Steps

Past Performance

How has William Hill performed over the past 5 years?

-56.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WMH has a large one-off loss of £104.1M impacting its July 2 2019 financial results.

Growing Profit Margin: WMH became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: WMH's earnings have declined by -56.4% per year over the past 5 years.

Accelerating Growth: WMH has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: WMH has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (1.6%).


Return on Equity

High ROE: WMH's Return on Equity (8.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is William Hill's financial position?


Financial Position Analysis

Short Term Liabilities: WMH's short term assets (£504.5M) do not cover its short term liabilities (£757.3M).

Long Term Liabilities: WMH's short term assets (£504.5M) do not cover its long term liabilities (£908.5M).


Debt to Equity History and Analysis

Debt Level: WMH's debt to equity ratio (279.2%) is considered high.

Reducing Debt: WMH's debt to equity ratio has increased from 73.2% to 279.2% over the past 5 years.

Debt Coverage: WMH's debt is not well covered by operating cash flow (17.8%).

Interest Coverage: WMH's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet

Inventory Level: WMH has a low level of unsold assets or inventory.

Debt Coverage by Assets: WMH's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is William Hill's current dividend yield, its reliability and sustainability?

7.29%

Current Dividend Yield


Dividend Yield vs Market

company7.3%marketbottom25%1.9%markettop25%5.2%industryaverage2.6%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: WMH's dividend (7.29%) is higher than the bottom 25% of dividend payers in the UK market (1.95%).

High Dividend: WMH's dividend (7.29%) is in the top 25% of dividend payers in the UK market (5.2%)


Stability and Growth of Payments

Stable Dividend: WMH's dividend payments have been volatile in the past 10 years.

Growing Dividend: WMH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (356.4%), WMH's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WMH's dividends in 3 years are forecast to be covered by earnings (51% payout ratio).


Next Steps

Management

What is the CEO of William Hill's salary, the management and board of directors tenure and is there insider trading?

0.9yrs

Average management tenure


CEO

Ulrik Bengtsson (47yo)

0.3yrs

Tenure

0

Mr. Ulrik Bengtsson has ben Chief Executive Officer of William Hill plc since September 30, 2019. Mr. Bengtsson serves as Director of William Hill plc since September 5, 2019. Mr. Bengtsson was the Group a ...


Management Age and Tenure

0.9yrs

Average Tenure

50yo

Average Age

Experienced Management: WMH's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Age and Tenure

1.4yrs

Average Tenure

52yo

Average Age

Experienced Board: WMH's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Ruth Prior (52yo)

    CFO & Executive Director

    • Tenure: 2.2yrs
    • Compensation: UK£653.76k
  • Ciaran O'Brien

    Director of Corporate Communications

    • Tenure: 0yrs
  • Ulrik Bengtsson (47yo)

    CEO & Director

    • Tenure: 0.3yrs
  • Philip Bowcock (50yo)

    Executive Officer

    • Tenure: 0.3yrs
    • Compensation: UK£1.03m
  • Nicola Frampton

    Managing Director of UK Retail

    • Tenure: 0yrs
  • Karen Myers

    Chief Human Resources Officer

    • Tenure: 4.7yrs
  • Crispin Nieboer

    Group Corporate Development Director

    • Tenure: 1.9yrs
  • Louise Turner-Smith

    Director of Investor Relations

    • Tenure: 0yrs
  • Phillip Feuvre

    Interim Chief Operating Officer

    • Tenure: 0.9yrs
  • Satty Bhens

    Chief Technology & Product Officer

    • Tenure: 0.08yrs

Board Members

  • Roger Devlin (61yo)

    Chairman

    • Tenure: 1.7yrs
    • Compensation: UK£271.42k
  • Gordon Wilson (52yo)

    Independent Non-Executive Director

    • Tenure: 0.9yrs
  • Ruth Prior (52yo)

    CFO & Executive Director

    • Tenure: 2.2yrs
    • Compensation: UK£653.76k
  • Georgina Harvey (54yo)

    Independent Non-Executive Director

    • Tenure: 8.1yrs
    • Compensation: UK£73.88k
  • Ulrik Bengtsson (47yo)

    CEO & Director

    • Tenure: 0.3yrs
  • Robin Terrell

    Independent Non-Executive Director

    • Tenure: 2.9yrs
    • Compensation: UK£55.90k
  • Mark David Brooker (48yo)

    Senior Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£76.50k
  • Jane Hanson (52yo)

    Independent Non-Executive Director

    • Tenure: 0.4yrs
  • Lynne Weedall (52yo)

    Independent Non-executive Director

    • Tenure: 0yrs

Company Information

William Hill plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: William Hill plc
  • Ticker: WMH
  • Exchange: LSE
  • Founded: 1934
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: UK£1.438b
  • Shares outstanding: 873.60m
  • Website: https://www.williamhillplc.com

Number of Employees


Location

  • William Hill plc
  • 1 Bedford Avenue
  • London
  • Greater London
  • WC1B 3AU
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WHIDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2002
WMHLSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 2002
WIMH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2002
WMHLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 2002
WIMH.YOTCPK (Pink Sheets LLC)ADR-ORD SHSUSUSDJul 2008

Biography

William Hill plc provides sports betting and gaming services in the United Kingdom and internationally. It operates through Retail, Online, US Existing, US Expansion, and Other segments. The company operat ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 20:37
End of Day Share Price2019/12/11 00:00
Earnings2019/07/02
Annual Earnings2019/01/01


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.