William Hill shows better form but faces heavier going in future races

William Hill’s shares have represented a cracking bet since the end of October.

Philip Bowcock was an unfancied runner when he entered the ‘Can we find anyone to do this job’ sponsored CEO handicap stakes, but having beaten a thin field, he’s shown the potential to run in better class company.

The same goes for the business. It once looked like it would drop into selling class company, but has also stepped up in grade.

It’s still a long way from the Derby class performer that it was under Ralph Topping but has at least shown signs of recovering some of its old form.

The decent performance of late, culminating in today’s upbeat trading statement, still needs to be put into context. Hill’s has benefitted from favourable sporting results, and as far as they are concerned it’s very much a case of swings and roundabouts.

Of more significance is the improved pace set by Hill’s online business, which suggests that the longstanding problems with this most important channel have been attacked with some energy.

That’s particularly important with the industry gearing up for the football World Cup, and the traditional overestimation of their team’s ability by England fans, which always provides the industry with a nice windfall.

All this has fed into the shares’ strong run. However, investors who have bought them might be wise to sit the next race or two out.

While speculation abounds about the involvement of the bookie in deals, it still has something to prove as regards M&A at a time when its main rivals are reaping the benefits of getting into bed with each other.

Then there’s the Australian business, which has taken a hit from a crackdown in the country, and is now under review.

Taxes are set to be hiked, regulations tightened, amid concerns among legislators at the country’s gambling habits.

‘When the fun stops stop,’ says the ads running over here. They could do with a bit of that down under where punters lose more per head than any other country on earth.

Liberalisation of gambling laws has, in fact, been going into reverse worldwide.

That’s no bad thing. The fun stopped a long time ago for far too many people who picked up a habit they weren’t able to control through the normalisation of gambling, and the growth of it on the internet and via machines.

Even people such as myself, who enjoy the recreational use of the industry’s product, and were formerly relatively sanguine about it, have started to feel discomfort over what has been going on.

Hill’s as a business now looks better place than it did to navigate the heavier going it faces. But the easy victories are behind it.