Ladbrokes began a hunt for a new chief executive yesterday after the bookmaker ousted its boss Richard Glynn.
Mr Glynn oversaw a string of profit warnings as the company struggled to keep pace with rivals making hay in an online gambling boom.
He will stay on into 2015 until a successor is found. Sources said the parting was “amicable”, but the board, which made its final decision on Tuesday night, agreed following discussions with the former Sporting Index boss that fresh blood was needed to lead the bookie for the next five years.
Mr Glynn, who earned a basic £580,000 salary, is understood to be in talks over a pay-off. He bolstered the group’s weak online presence and managed the roll-out of thousands of new betting terminals across its betting shops ahead of the World Cup, but progress was slow as the digital overhaul disrupted trading more than expected.
The sector has also faced several regulatory crackdowns as politicians focused on “crack cocaine” betting terminals and hit the industry with a new tax regime this week.
Investors have also endured five years of misery since Mr Glynn joined, with shares currently cheaper than in April 2010 when he joined. The company said its board “acknowledges that the recovery programme has taken longer to deliver than initially anticipated”.
Mr Glynn said: “We have faced significant operational challenges, as well as economic and regulatory headwinds. However, I am pleased that the business is fundamentally stronger than it was.”
The City was more sceptical. Panmure Gordon’s Karl Burns said: “We believe the timing of the decision is strange … The industry has only just begun to pay UK point of consumption tax, while the digital turnaround remains at an early stage. And there remains considerable uncertainty ahead for UK retail, particularly fixed odd betting terminals.”
The chief executive was given a special package on joining to get the share price up, which could have earned him as much as £12m.
But, aside from one brief period when the shares went above £2 last year – earning the chief executive nearly £4m in shares – Ladbrokes has underperformed.
The shares were up 0.5p at 114p yesterday but began the year at 180p. Rival William Hill’s shares have almost doubled in the past five years. Ladbrokes will consider internal and external candidates for what remains one of the most prized jobs in the sector, despite its recent woes. “Mr Glynn has done a lot of the heavy lifting so the job looks more attractive,” said one source.
Names mooted include Henry Birch, the former boss of William Hill Online, now leading gaming group Rank; and Paddy Power chief executive Patrick Kennedy is free next year but has said he will never compete against his old firm.
In a update alongside the succession announcement, Ladbrokes said it was “trading in line with expectations”.Reuse content