UBS has reiterated a ‘sell’ rating on sports betting group William Hill on Wednesday, as the group loses market share in Australia amidst fierce competition, local media reports.
According to the brokerage, Ladbrokes has grown significantly faster than William Hill over the last three quarters, with Ladbrokes wagering growth averaging more than 50 percent, compared to a 8 percent dip for William Hill.
“The growth in Sportsbet, Ladbrokes and CrownBet over the last three years has intensified competition in the Australian online sports betting market, driving William Hill’s market share from 34 percent to just 12 percent (of the digital market), and net revenue flat in 2015 versus 2013 despite the market growing at around 15 percent per year,” said UBS analyst Chris Stevens.
William Hill’s chief executive James Henderson said horse racing results at Cheltenham and unfavourable European football results meant online revenues were about GDP 15 million (US$21.7 million) worse than expected.
However, while the Australian Open in January was positive for the operator, the brokerage says William Hill continues to lag behind competitors.
UBS says they have reiterated a ‘sell’ rating and left its target price 290 GBX (US$4.2) unchanged on the betting group.