William Hill agrees covenant waiver with lenders
William Hill has secured a covenant waiver with its banks until December 2020 as it looks towards a phased reopening of its UK betting shops during the second half of 2020
The bookmaker has also agreed with its lenders to amend its net debt covenant to 4.5x in June 2021 and 4x in December 2021, returning to 3.5x in June 2022.
The outstanding amount on William Hill’s 2020 bond of £203m is scheduled for repayment in June and it has persevered money to cover that.
William Hill has secured a covenant waiver with its banks until December 2020 as it looks towards a phased reopening of its UK betting shops during the second half of 2020
The bookmaker has also agreed with its lenders to amend its net debt covenant to 4.5x in June 2021 and 4x in December 2021, returning to 3.5x in June 2022.
The outstanding amount on William Hill’s 2020 bond of £203m is scheduled for repayment in June and it has persevered money to cover that.
William Hill added in its latest trading statement that it had fully drawn down its rolling credit facilities, which totalled £425m, suspended dividend payments and deferred all non-essential capital expenditure, reducing its monthly cash outflow to circa £15m.
The firm added that as a consequence of its activities to mitigate the impact of Covid-19 on the business it was performing ahead of its expectations despite one month of shop closures turning into three.
Previously William Hill had outlined that if there was limited sporting activity until the autumn and one month of shop closures, its EBITDA would fall by £100m to £110m.
The firm said that each additional month of shop closures would reduce its EBITDA by £12m-£15m on the basis that the government continued its support for furloughed workers – approximately half of the initial estimate of £25m to £30m.
However, due to a lack of visibility of the nature and longevity of the UK’s restrictions on activities, the business is withdrawing all future guidance.
Ulrik Bengtsson, chief executive at William Hill, said: “We reacted quickly to the cancellation of sports activities and the closure of our retail estate. We took immediate measures to save costs, reduce cash outflow and minimise non-essential expenditure by negotiating with our suppliers, cancelling pay rises and executive bonuses and suspending the dividend.
“We have preserved liquidity and amended the terms of our net debt covenant, leading to significant, balance sheet headroom. This will enable us to continue to invest for growth, most notably in the US, as plans there to roll out sports betting continue apace.
“Our ambition to build a digitally led, internationally diverse business of scale is proving beneficial during the disruption as our international online business has performed very strongly. We have accelerated product developments in the US in particular to ensure we are well positioned when sports activity reopens.
“We are taking care of our teams, securing as many employment opportunities as possible and we are ready to power up the business as soon as Covid-19 restrictions permit.”
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