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William Hill sees lower profit on weak margins, tough high street

William Hill sees lower profit on weak margins, tough high street
FILE PHOTO: A pedestrian walks past a William Hill betting shop in London, Britain July 25, 2016. REUTERS/Neil Hall   -   Copyright  Neil Hall(Reuters)
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(Reuters) – British bookmaker William Hill Plc <WMH.L> on Tuesday forecast lower full-year operating profit, largely below analysts’ consensus, blaming weaker football and racing margins as well as challenging conditions on the UK high street.

Operating profit for the year is expected to be 225-245 million pounds, the company said on Tuesday. It had reported adjusted operating profit of 291.3 million pounds in 2017.

Analysts on average had estimated a profit of 242.6 million pounds, according to a company compiled consensus.

Shares of the company are expected to open down as much as 10 percent, according to premarket indicators from traders and analysts.

The company, which was founded in 1934 as a postal or telephone betting service and operates in eight countries, also warned that regulation and taxes would reduce profit at its online business by 20 million pounds in 2018.

In a separate statement, the company said it aims to at least double profits between 2018 and 2023, but expects its U.S. unit to make a loss of about $0-20 million in 2019.

William Hill is expected to be hit by the government’s plan to cut the maximum stake on fixed-odds betting terminals to just two pounds from 100 pounds, which will take effect in October next year.

The company said it would look to provide alternative gaming options as well as remodel its estate to offset the hit from the regulation.

(Reporting by Shashwat Awasthi and Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty)

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