Cash-strapped consumers looking for cheap entertainment at the end of 2011 boosted Britain's biggest bookmaker William Hill , which saw an upturn in bets placed over-the-counter in its shops and money taken by its gambling machines.

The company, which takes more than a million bets a day, reported 11 percent growth in over-the-counter bets for the fourth quarter compared with the year before and a 7 percent rise in gross win - total bets minus payouts - from its gambling machines.

Going into 2011, we were - like many businesses with a strong presence in the UK - predicted to face a challenging consumer backdrop, but our overall performance shows we've seen the benefit of being a predominantly low ticket leisure activity, Chief Executive Ralph Topping said on Thursday.

The performance contrasted with weak performances from British retailers who have struggled to negotiate tough trading conditions.

Shares in William Hill, which have outperformed the FTSE All Share Travel & Leisure Index <.FTASX5750> by over 40 percent in the past year, were up 5.9 percent to 222 pence at 0850 GMT, the top riser in the mid-cap index <.FTMC>.

The group's exposure to the 'low ticket leisure activity' of sports betting has helped it to perform steadily in a tough year and it will continue to invest for the future, said Langton Capital analyst Mark Brumby.


Growth in over-the-counter betting has generally lagged that of online in recent years leading some to doubt the long-term viability of betting shops.

However, Investec analyst Paul Leyland said William Hill's performance offered a rebuttal to that theory.

We see this as a highly encouraging result, especially the Q4 OTC volume growth of 11 percent. Most significantly, we see continued OTC volume growth undermining the 'structural decline' thesis, potentially driving a re-rating as well as upgrades, said Investec analyst Paul Leyland.

For the year as a whole, William Hill said it would meet market expectations with net revenue expected to be up 6 percent and operating profit expected to be around 274 million pounds, compared to 276.8 million in the year before which was boosted by the soccer World Cup.

This is a very positive performance, particularly in a year without a significant international football tournament and with a 9 million pounds increase in VAT payments as a result of the rate change, said Topping.

William Hill said its over-the-counter gross win margin was 17 percent in the fourth quarter, down 2 percentage points on the same period the year before.

That reflected a high number of favourites winning in Premier League soccer and customers taking advantage through wins on accumulator bets.

The company said William Hill Online, its joint venture with Playtech
, had achieved net revenue growth for the year of 28 percent, benefiting from a 51 percent rise in sports betting.

William Hill also said on Thursday that it had awarded an exclusive contract to Inspired Gaming to supply machines go its shops. Machines have been an important driver of growth to betting shops in recent years.

(Reporting by Matt Scuffham; Editing by Lorraine Turner and Jodie Ginsberg)