To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://www.silicon.com/retailandleisure/0,3800011842,39170196,00.htm

William Hill profits hit by online problems
Software upgrade fiasco wipes millions from profits

By Julian Goldsmith

Published: Wednesday 27 February 2008

Technical difficulties with a new online platform wiped £10.6m from the operating profit of high street betting chain William Hill's interactive channel for the year ended 1 January 2008.

Revenue and operating profit fell to £119m and £50.9m during the period respectively.

William Hill announced in January it was scrapping an in-house software upgrade, dubbed NextGen, because the project was delayed. It is estimated the budget for NextGen was £26m.

However, the programme also had some design limitations, which affected revenues. In a statement, the company said: "This inflexibility is most notable in respect of in-running betting [where bets are made after the event has started] where the limitations of our technology prevented us from matching the increasing number of in-running betting opportunities available from our competitors."

silicon.com Retail & Leisure

Get the latest retail and leisure news straight to your inbox. Sign up for the R&L newsletter today!

The report said while NextGen would deliver the expected benefits in due course, the implementation would require greater investment and take longer than originally envisaged. The review last November also identified that proven technology was available which could be implemented more rapidly and at a lower comparative cost.

NextGen will be replaced by off-the-shelf systems supplied by Orbis, which is hoped will be in operation by the end of November. William Hill has taken a restructuring charge of £20.9m in 2007 and will also take a further charge of £4m in 2008 as a result of the change in online strategy.

The company said it has already taken steps to make its online offering more appealing to punters by running video streaming of events and expanding on online payments systems through which they can make bets.

William Hill has also made some changes to the online team. Finance director Simon Lane told silicon.com: "Within the last few months we have appointed a new head of ecommerce and we are anticipating strengthening the team by bringing in further talent."