Tom Waterhouse has finally turned a profit, according to the new owner of his business, British betting agency William Hill.
In a trading update on Friday, William Hill reported the Tom Waterhouse business ”recorded its first monthly profit in December 2013”.
A rare foray into the black will be a welcome relief for the controversial racing identity, although his performance for the whole year wasn’t quite so rosy.
For the 2013 calendar year, which also serves as William Hill’s financial year, the Tom Waterhouse business is expected to report a $3 million loss on a customer base of about 75,000.
William Hill acquired the business in August last year for $30 million up front and a further $70 million depending on Waterhouse managing to engineer a significant profit from the business by the end of 2015.
According to BRW, not all that cash went to Waterhouse himself, as he only owns around 25% of the business, with the rest held by investors.
Waterhouse gives the impression of being a much bigger fish than he actually is thanks to spending an estimated $35 million in advertising annually.
It may be overexposure, but December’s results give support to his business model of spending up on advertising to gain market share.
It’s a market that’s only getting bigger, with IBISWorld recording the sports betting industry as growing by about 15% a year over the past five years.
Luckily for Waterhouse, he was able to sell to a wealthy established business in William Hill with a far lower return on equity requirements.
But in order to unlock that $70 million earn out, Waterhouse will need to generate $30 million in profit by 2015.
One month in the black is a long way off $30 million profit, although cutting back on advertising now the business name is established and the synergies with William Hill mean profitability should continue to improve.
It looks like Waterhouse’s gamble might just be paying off.