Mitch Garber, the chief executive of PartyGaming, shocked the City yesterday with the news thathe will leave the gaming group which he joined two years ago. The Canadian national said hewould not renew his current contract when it ends on 1 May 2009,which gives the company14 months to find a replacement. Headhunters have already been hired to review both internaland external candidates.
The decision was a personal one based on Mr Garber's desire to return to North America with his family, the company said. The news came as the company revealed below-target revenues for last year. Total net revenues were down nearly 60 per cent at $476m (£241m), largely due to comparisons with 2006 following the ban on internet gaming in theUS towards the end of that year.
PartyGaming said revenues in the past five weeks had been slightly below expectations – up 4 per cent on January – but that earnings were in line with hopes. But underlying profits fromcontinuing operations rose nearly 120 per cent to $111.7m(£56.7m), while the number of active players using its casino and poker websites climbed to 1.1 million in2007 from 749,000 in 2006.
Shares in the company fell 9 per cent due to the uncertainty over succession coupled with afear that the drop in revenue may lead to a fall in profits. The house broker Dresdner Kleinwort sold more than £20m of shares at 23.5p yesterday which put further pressure on the stock. The shares fell 2.25p to 25.25p. Mr Garber took the helm in April 2006, just months before the US in effect outlawed online gaming. PartyGaming lost 80 per cent of its business overnight, causing its share price to plummet by almost 75 per cent.
But since then, Mr Garber, 43, has overseen a transformation of the world's biggest poker group into an international company with games played in 12 languages. He said: "PartyGaming is an extraordinary company. The challenges we have faced and overcome in the last 18 months have been no less extraordinary... I personally take great pride in the fact that the company is delivering on its business strategy and is in great shape to exploit its full potential in the future."Reuse content