Ladbroke moves to rebuild image in City: Chairman-designate promises greater openness and hints at new non-executives

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The Independent Online
JOHN JACKSON, the chairman-designate at Ladbroke, has promised a period of greater openness with the City and the press following the group's backfiring attempt to prevent the circulation of 'scurrilous rumours' about the former chairman, Cyril Stein.

He also hinted that he may appoint new non-executive directors to the Ladbroke board in the near future.

Mr Jackson's remarks appear to herald a new phase at the company. Mr Stein was well known for his autocratic style and his reluctance to release information about the company's activities.

'My instinct', he said, 'is to be very open.' If he is as good as his word, the change will be welcomed in the City.

Mr Jackson's recent behaviour, however, may cast doubt on such promises. Two weeks ago, the betting to hotels group obtained an injunction against the Mail on Sunday preventing the publication of rumours relating to Mr Stein's resignation, which it said were 'entirely false and highly damaging'.

The result has been a spate of unwelcome publicity, which has upset Ladbroke shares and cast doubt on the new management's abilities to rebuild the company's image.

Mr Jackson said the City did not fully appreciate that the company was in fact 'very confident in itself'.

Some analysts have been negative about Ladbroke's shares for some time, worried that its pounds 1.3bn debts, combined with a weakened trading performance, will eventually force it to change its high dividend policy or sell assets cheaply. Ladbroke is currently the highest-yielding share in the FT-SE 100, but Mr Jackson said the company would not be a forced seller of any of its major assets.

He would not be drawn on whether there are plans to pay less generous dividends to conserve cash resources.

However, he hinted that the board will be strengthened in the near future by the appointment of one or two new non-executive directors, probably with experience in relevant industries. 'It's only natural that the composition of the board should be a subject for a new chairman to think about,' he said.

Mr Jackson himself is chairman at a number of other companies, including Howden, EDS-Scicon, Graseby and Brown & Jackson. He said he will be re-organising his commitments to leave more time for the Ladbroke job. 'It's extremely important that I'm accessible to management at all times,' he said.

Meanwhile, Syspas, the risk-management specialist, has described Ladbroke's financial position as 'fundamentally healthy'. The company, it said, has 'substantial financial strength represented by over pounds 3bn of fixed assets funded mainly by pounds 2.5bn of net worth . . . A company with such underlying strength should not have difficulty in managing itself out of that situation.'

Mr Jackson said he had met one or two of the group's bankers since last month's announcement that he was to take over as chairman, and that the meetings had been cordial.

He arrived at Ladbroke as a non-executive director in 1980 at the invitation of the late Sir Kenneth Cork, shortly after the company had suffered the embarrassment of losing its casino gaming licence. It was Mr Stein who was eventually forced to admit that it had broken gaming rules.

That episode cast a shadow over Mr Stein's reign and the company has often been the subject of bearish stock market rumours ever since. Mr Stein himself is a private man and in recent years he avoided personal publicity, withdrawing into a close circle of friends.

One blue-chip merchant bank said last week that it had avoided approaching Ladbroke for advisory business for the whole time Mr Stein was at the helm. 'Now things are different, and Ladbroke is an eminently attractive potential client.'

Since Mr Jackson's appointment, he has received a number of greetings from City well-wishers, who have added, almost without exception, that if he ever needed their advice they would be ready and willing to be commissioned. For the time being he is sticking with the financial advisers he has got. They include Charterhouse, Ladbroke's merchant bank.

'Everybody is expecting something dramatic to happen immediately,' he said. 'But in fact we are just pausing for thought.'

(Photograph omitted)