Ladbroke yesterday announced that Tommaso Zanzotto was quitting as the head of the company's Hilton International hotel chain, but denied recent speculation that his pending departure was due to disagreements with other directors.
Mr Zanzotto was head-hunted from American Express just 18 months ago. He will leave early next year, when Ladbroke may well be concluding a deal to buy Hilton Hotels Corporation in the US.
Peter George, chief executive of Ladbroke which also yesterday announced interim results, said Mr Zanzotto had "informed me several months ago" that he wished to leave next year.
"There have been no disagreements. He believed the role of chief executive of Hilton was evolving very differently to what he had expected," Mr George added.
No compensation will be paid to Mr Zanzotto, who is on a two-year contract paying pounds 325,000 annually. Mr Zanzotto said he had no plans about his next job.
Mr George said the departure "did not indicate" a change in the direction of Hilton, which was the star performer in the interim results with a rise in group pre-tax profits from pounds 51.9m to pounds 59.8m. The interim dividend is held at 2.4p.
Operating profits from hotels climbed from pounds 48.8m to pounds 65.8m, reflecting increased occupancy levels around the world and better room rates with the exception of the African and Middle Eastern regions.
The impact of the National Lottery and the hot summer weather took a heavy toll on the betting and gaming businesses, which recorded a drop in operating profits from pounds 49.2m to pounds 37.4m. The division's performance was also hampered by an unspecified fall in international credit betting, a business which is geared to a small number of "high-staking" clients.
Problems in betting and gaming look set to continue. "We believe the lottery will reduce betting turnover in the UK by 8 per cent in 1995," said Mr George, who reiterated his call for the Government to reduce betting duty.
Analysts calculate that full year profits from the betting and gaming division will fall from pounds 97.7m to pounds 77m, contrasting sharply with Hilton which is expected to improve from pounds 126.8m to pounds 150m. They expect group pre-tax profits to rise from pounds 128.5m to around pounds 150m.
Besides the benefit of management and marketing changes made at Hilton, the hotels side is benefiting from the economic recovery in its main markets, particularly the UK.
Unification of the Hilton name through a deal to buy the US business would be a good move, according to analysts. Hilton was split into two hotel companies in the early 1960s.
Mr George said talks with Hilton Hotels Corporation, headed by Baron Hilton, were continuing. "It is no secret that both parties believe that closer links would be more beneficial to shareholders. They are both heads and tails of the same coin."
He added that Ladbroke was keen to expand its interests in casinos, but contrary to recent speculation he said that "we are not talking to Rank", owner of the Claremont in London and several provincial casinos.Reuse content