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William Hill shops hit by tax hike
Bookmaker William Hill has said it will close more than 100 shops this year due to the impact of the Chancellor's surprise hike in gaming machine duty.
The chain, which has 2,434 sites in the UK, warned that around 420 jobs are at risk from the closure plan, which affects 109 of its worst-performing outlets.
William Hill said the duty hike from 2 0% to 25% made it unlikely that the shops, most of which are loss-making, can be successfully turned around.
The company has already warned that George Osborne's Budget increase in the tax on fixed odds betting terminals will cost it around £ 22 million a year.
Shares in William Hill and Ladbrokes have fallen sharply in the wake of last month's tax raid, which the industry called "knee-jerk and ill-considered".
In a trading statement today, William Hill chief executive Ralph Topping described the shop closures as particularly disappointing.
He added: "T hrough the economic downturn, we have worked hard to grow our retail base but this further planned increase in indirect taxation makes this action necessary."
William Hill saw revenues from fixed-odds betting terminals (FOBT) rise by a fifth in 2013 as it grew the number it had to 9,400 over the year.
But there have been increasing calls for the use of the machines to be banned or limited.
Community, the union for betting shop workers, said it planned talks with William Hill over the closures.
Assistant general secretary John Park said: " The Chancellor's decision to make such a hike in FOBT duty was always going to affect the viability of betting shops on the margins of profitability.
"This has proved to be the case at William Hill and we would not be surprised to hear similar announcements from other operators in the near future.
"The Treasury's move on FOBTs demonstrated a lack of joined-up thinking by the Government, given it was taken while a review of FOBTs is ongoing."
In today's trading update, the company said major wins for punters during two weeks of the football calendar contributed to a 25% fall in the retail estate's operating profits in the first quarter.
This came despite a 3% rise in the amount staked at its shops after a 20% surge in football betting and a 4% increase in the number of racing fixtures.
Gaming machine revenues were 5% higher but the punter-friendly football results meant underlying turnover in the division fell 4%.
In online, which accounts for around a third of the group's business, underlying revenues were 4% higher, helped by a 39% jump in sportsbook wagers.
Mr Topping added that the company was very well-placed to take advantage of this summer's World Cup, with an "unrivalled football product range".
Investec analyst James Hollins retained a buy stance on the shares, saying: "We do not expect the shop closures to make a big change to earnings."