William Hill @ 225.1p, -3p (-1.32%).
There seems to have been some bizarre goings on at William Hill online recently with news that employees at its Israeli based online support centre had walked out on fears that their jobs were to be migrated to Gibraltar.
The first public inkling came in a company release on the 18th October (www.williamhillplc.com: Statement re William Hill Online Marketing) in which William Hill confirmed the resignation (as far back as the 27the Sept) of Eyal Sanoff, the Chief Marketing Officer of William Hill Online's Tel Aviv team.
In addition, a number of senior managers were the subject of disciplinary action following disruption at the centre in Tel Aviv which resulted in 180 staff walking out.
Bizarrely media reports also speculated that the company had hired the services of former Israeli Intelligence Officers in an attempt to regain control of a situation which seemed to be escalating with tales of computer system sabotage and related operations in Bulgaria and Manilla also affected by staff walk outs.
More recent media reports suggest that WMH have sacked 7 senior managers and a number of junior staff following findings which suggest an attempt was being made to set up a rival operation.
In a further company release yesterday William Hill stated that they reached agreement with staff and restored WMH Online to normal operations. The company also expressed their continued commitment to the Tel Aviv operation.
William Hill Online (a 79% : 21% joint venture with Playtech) has been a success for the company and has looked set to be an key piece in the company's future growth strategy.
Disappointingly for me this incident came out as the share price was pushing new 52 week highs of 244p causing me to consider cashing in the portfolio's investment on the basis that:
- until next years Olympics and European Championships there seems little "exceptional" events to drive the shares higher than 244p.
- bought for recovery and the dividend, the shares have staged a strong performance (seeming to be strangely defensive) in the face of recent market volatility.
- at 244p, and in line with the previous point the forecast P/E rises above 10 times and the forecast yield falls below 4% suggesting that the shares were either undergoing a re-rating or becoming a little "frothy".
- it seemed prudent to free some cash up ahead of any EU summit outcome.
In summary then, it seemed reasonable to realise some gains, given that the shares had achieved my ambitions for them, which could be recycled into more solid long term opportunities.
At 244p, the portfolio's investment in WMH was showing a potential capital gain of 42.7% which when combined with the additional 7.8% in dividends received, adds up to a satisfying 50.5% profit in 22 months.
As it is the murky incident (and my dithering), has meant my missing the opportunity as well as reducing the total gain to 39.45% (temporarily I hope).
But, the shares did also go ex dividend today which means the holding has qualified for a further dividend, payable on the 8th December, equating to another 1.6% return on my original investment.
A decent return so far then, and an investment that could yet gallop further. Particularly if the company's recent investments in the US enable WMH to capitalise on any speculated liberalisation in online gambling.
A decent return so far then, and an investment that could yet gallop further. Particularly if the company's recent investments in the US enable WMH to capitalise on any speculated liberalisation in online gambling.
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