Bookie takes a punt on the stock market

Business Profile: As World Cup fever mounts, David Harding has timed the William Hill float perfectly

At first glance David Harding does not seem like the obvious sort of chief executive to be guiding the bookmaker William Hill to its £1bn stock market flotation next month. Clean-cut and lean, he looks more likely to spend time at the gym than in one of his company's smoke-filled chain of bookies. And a glance at his CV shows a career path that has taken him from Jaguar Cars to PA Consulting and on to Charles Schwab and Prudential. Not obvious schooling for the 3.20 at Haydock Park.

But over breakfast at a City of London restaurant where he wolfs down scrambled egg and baked beans, it becomes clear that this man likes a bet. "Oh yes. As a student (studying economics at Lanchester Polytechnic, now Coventry University) we used to bet with our grant money and then spend the rest of the time working in pubs to make it up. I walked out of a casino with a couple of grand once."

He has lost a fair bit too, though his most painful experience came on the stock market rather than the gee-gees. A keen sharedealer, he came a cropper in the dot.com boom. "I probably lost £100,000 in total, which I'd painstakingly built up. I was in start-ups, mobile, cable. I got out thinking, 'this is crazy'. Then it kept going up so I got back in again and lost the lot. It's made me much more cautious. I now follow the Warren Buffett approach to investment. I only invest in things with long-term prospects that I understand."

Mr Harding, 46, seems remarkably philosophical about the loss: "These things happen."

Now he tends to bet on golf, a sport he once nurtured hopes of playing professionally. "At 16 I was playing off four (handicap). But that was never going to be good enough. I got a leg injury playing rugby and people told me it would be silly trying to be a pro."

So while David Harding is no John Brown, the William Hill chairman who, legend has it, once won enough from Coral to buy a Bentley, he is sufficiently imbued with the subject to know all the odds. He even carries the Racing Post tucked inside his copy of the Financial Times. "I like having a stake in things. I want to be a player, to have an influence."

Indeed he has the punter's trait of wanting to back his hunches, a desire which has led him to quit certain jobs along the way when he thought the going did not suit him.

He left the marketing department at Sir John Egan's Jaguar for PA Consulting "because I wanted to understand more how companies operate." He loved it for three years before the excitement paled. "You'd hand in a report and watch them not implement it. I hated that."

And in his early years after graduating he followed an MBA at Warwick University with a sudden decision to do two years' voluntary work in Papua New Guinea. "It was an adventure," he explains. "I spent half the time in the bush policing an international timber operation."

After that it was into telecommunications, where he worked for the precursor to One2One, and then on to Charles Schwab Europe and Prudential, where he was managing director of the Life and Pensions Business, and latterly deputy chief executive of the Pru-owned Scottish Amicable. He got the call to become chief executive of William Hill in autumn 2000.

He now finds himself negotiating a different kind of jungle – the London IPO market. It is a treacherous place after the disappointing HMV debut and the cut-price Punch Taverns float. But Mr Harding believes the odds are in his favour. "I genuinely believe the market will make rational decisions on a company's merits. There is a price for every company. What happened with HMV set the tone. Punch showed there was some common sense. People are starting to distinguish between these companies."

Contrasting William Hill with HMV he says. "We've set out our stall rather differently. We have a strong track record of growth and we are paying a reasonable dividend (the yield will be 3.5 to 4 per cent)."

The company has certainly timed its flotation with all the skill of a Grand National champion. Taking place in mid-June means it will be able to capitalise on World Cup fever. The retail offer closes on 14 June with the shares due to start conditional dealings on 17 June. So England could be out of the tournament by then. But though 95,000 private investors lost out on William Hill three years ago when its float was pulled in favour of a sale to CinVen and CVC Capital Partners, Mr Harding believes the appetite will still be there. "It's the ideal sort of stock. It's a brand and a business they understand."

Mr Harding believes institutions will like the growth plans too. "We've had the tax change and de-regulation is on the agenda. And the internet is a proven medium for us now and made £9m profit last year."

The strategy is "more of the same" with growth coming from longer opening hours, more betting options on a wider range of sports and a continued drive behind the telephone and online betting businesses. Recent unusual bets include a race between a pigeon and a greyhound ("the pigeon had done well in training but in the race itself it just dived"). William Hill was also taking bets on whether David Beckham's foot would heal in time for the first game against Sweden but has closed the book fearing inside information could start to come into play.

Mr Harding believes William Hill could add about 400 UK betting shops to its chain of 1,500 without falling foul of the competition authorities. Other possibilities include a move into casinos. "There are no obvious synergies but it is something we might look at."

If the float goes well Mr Harding will find himself with £4.5m of shares, funds that could go towards the renovation of the big barn he has bought in Warwickshire.

He is hoping there will be no barriers in the way of the William Hill float this time as he embarks on two weeks of presentations with institutions in at least six different countries. The odds are that it will get away. Indeed, Mr Harding would no doubt take bets on it.

DAVID HARDING FORM GUIDE

Career History

Chief executive, William Hill; Jaguar Cars, PA Consulting, Mercury One2One, Charles Schwab, Prudential.

Interests

Golf, private investing, travel and one-pot cooking of chillies and curries.

Salary

£300,000 plus £100,000 bonus.

Business influence

"Sir John Egan at Jaguar. I remember giving a presentation and I was basically showing how clever I was. He took me aside afterwards and said: 'Business is about giving the customer what they want better and cheaper than everyone else. All the rest is just bullshit.' I've never forgotten that."