Philip Bowcock was confirmed as William Hill’s new chief executive only two months ago. But, already, he has shown himself to be more than poised when adopting the odd stance required for the position. This is not a craning of the neck to spot the winning post at Cheltenham. Instead, it is a contortion that enables bookies to view problem gambling from a lofty external vantage point, in the manner of a concerned bystander.
A month ago, Mr Bowcock said: “The focus of the [government’s gambling] review should be on what will tackle the problem.” This is exactly the posture: suggesting it is the responsibility of government to tackle a problem the industry can do nothing about – because, let’s face it, only the state can decide what to do with all those fixed odds betting terminals (FOBTs) that let punters stake £100 every 20 seconds. It’s bad enough that bookies have to keep emptying the blasted things every few hours! He even offers a helpful tip in case MPs might jump to the wrong conclusion: “Stake cuts will not tackle the problem.”
To be fair to Mr Bowcock, he didn’t create the situation whereby FOBTs now account for 56 per cent of all bookies’ betting shop profits and 10,000-20,000 industry jobs. He, and others, also point out that problem gambling is hardly channel or product specific. However, he and his shareholders must now wait for MPs to clear a bigger hurdle – the general election – before returning to complete a review that had been due to finish about now.
In the meantime, he could do with a result or two. And William Hill appears to have got them. In this morning’s trading update, it reported growth in wagering and net revenue across all four divisions. Amounts bet online on sports rose 9 per cent, while gaming net revenue was up 8 per cent following product improvements. In the retail business, sports bet amounts rose 2 per cent and gaming net revenue was up 4 per cent. Online, the gross win margin was 1.2 percentage points stronger at 7.5 per cent, with strong horseracing results but football coming in lower than expectations. However, in the retail betting shops, the gross win margin was 0.8 percentage points lower at 18 per cent, as the prior year benefited from positive UK football results
In addition, William Hill remains on track to deliver annualised £40m of cost efficiencies, largely for reinvestment, by end of 2017.
Mr Bowcock made no mention of the government review but said:
It has been a positive start to the year for William Hill across the board. Our Online business continues to deliver growth thanks to the improvements in product, user experience and marketing we have made. Retail is also seeing positive trends while our key international markets continue to perform well with double-digit wagering growth.
Outsourcer Mitie is another group with a new chief executive and a difficult relationship with the government – it is Britain’s biggest manager of immigration detention centres but parted company with its last boss after delays to contracts and two profit warnings.
Today, it said it had appointed a new chairman, as part of its boardroom shake-up. Derek Mapp, who brings 20 years of senior management experience, will take over from Roger Matthews from July.
Earlier this month, Mitie took a £50m hit to profits and said it may need to restate its previous years’ accounts, after admitting aggressive accounting practices. In October, it named Phil Bentley as its next chief executive, replacing the longtime boss Ruby Mcgregor-Smith.
But one chief executive sailing on in difficult conditions is Bronek Masojad of Hiscox, the Bermuda based specialist insurer. He has said a focus on covering small businesses helped the business offset difficulties in the London insurance market.
As a result, gross written premiums grew by 17 per cent to £751.2m, driven by a strong performance from Hiscox Retail. By contrast, Hiscox London Market income was down 8.6 per cent in constant currency terms, to £157.7m.
Hiscox also said there had been no improvement in big-ticket business, where a continuation of a lack of major loss events, excess capital and strong competition has put downward pressure on rates. This has been most severe in the London Market where it has are seen double-digit declines in the marine, energy and US large property accounts.
Mr Masojada said:
We have had a strong start to the year thanks to our long-term investment in Hiscox Retail, particularly in the small business sector. Hiscox London Market continues to face challenging conditions. Hiscox Re and ILS are finding opportunities. We remain disciplined and are carefully navigating our way forward.
FT Opening Quote, with commentary by Matthew Vincent, is your early Square Mile briefing. You can sign up for the full newsletter here.
Get alerts on fastFT when a new story is published