WILLIAM HILL, the FTSE 100-listed bookmaker, yesterday unveiled plans to return up to £300 million to shareholders over the next 18 months through a share buyback programme.

The group said that a review of its capital structure after the £504 million acquisition of Stanley Leisure’s betting arm had concluded that it could return between £200 million and £300 million, compared with market estimates of £150 million. “We’ve always said we won’t hoard surplus cash,” David Harding, William Hill’s chief executive, said.

The move is designed to appease shareholders who had been disappointed that, as a result of the Stanley deal, William Hill had scrapped an earlier plan to return £453 million to investors. Some institutions questioned why it was using the cash to buy a lower-quality estate of shops.

Mr Harding has vigorously defended the deal, pointing to the promised cost synergies of £13 million. He said that the integration of Stanley’s 624 shops, including 52 in the Republic of Ireland, would be “substantially complete” by the end of March. Once the group has completed the sale of the 80 shops required by the Office of Fair Trading, it will be left with about 2,130 shops in the UK, a similar number to Ladbrokes, which is owned by Hilton Group.

“We’re basically neck and neck,” Mr Harding said. “It’s not all about who’s the biggest. It’s all about who can make more money out of the shops. Historically, we made about £5,000 a shop less than Ladbrokes. but we’re now making about the same, so we’ve closed the gap.”

Mr Harding was speaking after announcing a 6 per cent decline in first-half profits before tax, finance charges and exceptionals to £123.9 million, from turnover up 30 per cent to £5.05 billion. Including technology installation and acquisition costs, profits fell by almost 17 per cent to £99.7 million, with diluted earnings per share falling to 20p to 16.9p.

In common with other bookmakers, the company suffered a decline in margins thanks to a poor run of results as a string of well-backed horses were first past the post, including Hedgehunter in the Grand National. Last year’s figures were also flattered by the impact of the Euro 2004 football championships, when Greece, the rank outsider, won.

Mr Harding said: “It wasn’t any one big race or event in particular. It’s been the week-in, week-out results that have gone against us. Nothing has that big an impact now.”

He said that a “massive” amount of money had been wagered on the outcome of the Ashes cricket series — about £50 million across the betting industry — although he did not expect to make a big profit as large amounts had been bet on both teams. He pointed out that in the first nine weeks of the second half margins had begun to return to normal, with the gross win — what punters leave behind — up 5.5 per cent across its betting shops, telephone betting and online businesses compared with the first half.

Despite the profits decline, William Hill lifted the interim dividend by 11 per cent to 6.1p (5.5p) and Mr Harding vowed to maintain a progressive dividend policy.

The first-half gross win in its online gambling division rose by 17 per cent, primarily because of a 151 per cent increase in poker income.

The shares fell 17½p to 573½p on profit-taking.

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