William Hill showed a return to form today after a turnaround in sporting results helped the bookmaker lift margins to more normal levels.

The group’s recovery in the fourth quarter of 2009 followed a difficult summer, when Premier League football matches yielded few draws and plenty of victories for favoured teams such as Manchester United and Chelsea.

The pattern has changed in recent months and meant gross margins for 2009 returned to the normal range of between 17% and 18%. Net revenues for the final quarter were up by 6%, leading to a 4% gain for the year as a whole and full-year earnings of around £250m.

Shares rose 6% amid upgrades to City profit forecasts, but analysts warned this year will have got off to a difficult start due to the icy weather, which has caused high levels of horse racing and football cancellations.

William Hill made no mention of current trading in its brief update today.

Wyn Ellis, an analyst at Numis Securities, increased his projection for 2010 earnings by 4% to £280m.

However, he added: “We believe that the outlook for land-based gaming remains difficult and uncertain – cyclical recovery is not a given and rises in unemployment could weigh heavily.

“There are also potential tax risks and the seemingly inexorable rise in machine income cannot continue indefinitely.

“We also perceive long term structural challenges as horse racing continues to decline and the challenge of the internet mounts.”

William Hill said its online operation delivered a strong performance in the fourth quarter, with earnings for the full-year up 35%.