William Hill shares dive 11% on profit alert

(Close): William Hill shares closed down more than 11% after the bookmaker warned on profits.

It said online trading had been hit by tougher regulation and "the worst Cheltenham results in recent history".

It now expects full-year operating profit to be between £260m and £280m, down from £291.4m last year. As a result, the FTSE 250 company saw its shares drop nearly 40p to 331p.

However, the benchmark FTSE 100 ended flat, up 6.4 points at 6199.1.

Top riser on the FTSE 100 was B&Q owner Kingfisher. Its shares finished up 6% despite reporting a 20% drop in full-year profits to £512m.

However, when restructuring costs were stripped out, underlying profits were a better-than-expected £686m.

William Hill

William Hill said there were two main factors behind the weaker-than-expected performance from its online business.

It said it had seen "an acceleration in the number of time-outs and automatic self-exclusions over recent weeks", measures which allow punters to halt gambling with a bookmaker.

William Hill said that while the trend was "still evolving, we estimate that, should these trends persist around current levels, the consequent lower revenues will reduce online's profits by £20-25m in 2016".

Secondly, its profit margins were lower than expected because of European football results and last week's Cheltenham horseracing festival, where bookmakers were hit by large a number of favourites winning races.

William Hill said that despite its online problems, the broader group continued "to trade well" and was in line with expectations.

The company also said it was in "advanced discussions" to invest in Openbet, a gaming software firm.

Sterling weak

Elsewhere on the London market, shares in Sports Direct were having another bad day, down a further 5.6% after dropping about 10% on Tuesday.

Earlier the retailer had issued a statement saying that it expected full-year underlying earnings to be "at or around the bottom" of a previously estimated range. The statement was issued following comments that founder Mike Ashley made to the Times newspaper on Tuesday.

On the currency markets, the pound remained weak after having fallen sharply on Tuesday in the wake of the terror attacks in Brussels, which were seen as increasing the likelihood of the UK voting to leave the EU.

On Wednesday, sterling fell almost 1% against the dollar to $1.4087. Against the euro, it lost 0.4% to €1.2623.