William Hill has ousted chief executive James Henderson after just two years - so what's gone wrong at the bookie?

The company is looking for an external candidate to take over as chief executive after the online business stalled under Mr Henderson, a 31-year veteran of the group who started as a trainee manager and worked his way up to the top

William Hill's online business was a faller during James Henderson's tenure

Two years ago William Hill placed a bet on veteran insider James Henderson. The wager hasn’t paid off.

Mr Henderson took over at a company that appeared to be firing on all cylinders, with its great rival Ladbrokes disappearing in its rear view mirror. Hill’s results used to be as reliable as the Irish horses trained by Willie Mullins.

No longer, and in the wake of a second brutal profit warning in six months, in part blamed on the aforementioned trainer’s stunning success at the Cheltenham Festival, the bookie has pulled the plug.

The problems went beyond a bad Cheltenham - every bookie suffered at jump racing’s annual shindig. The real issue for Hill’s is that its online business has gone lame with its rivals causing up the back straight.

Online is everything in today’s gambling market. Hill’s says its betting shops are ticking over but they’re not going to provide the growth it needs. It has to get the online business humming again, and that means keeping its customers happy, and kicking them the odd bonus or two.

William Hill has faced other challenges during Mr Henderson’s tenure. The bookie watched from the sidelines as its main rivals walked up the aisle. Betfair is wedded to Paddy Power, while Ladbrokes tied a Coral knot, although the competition authorities may yet spoil the honeymoon. Among the smaller fry, GVC got together with Bwin.Party.

Mr Henderson wasn’t even able to catch a bouquet.

He had romances. William Hill notably played footsie with online gambling outfit 888 last year. But the wedding was cancelled after one of 888’s biggest shareholders complained that the dowry wasn’t big enough.

The inability to get to the registry office has left William Hill exposed. A rising burden of tax and regulation was the catalyst for its rivals’ nuptials. The logic being that if you get bigger you can cut costs and use that to compensate for the hit to your profit caused by those issues.

It hasn't helped Mr Henderson’s case that predecessor Ralph Topping, another Hills lifer, was quite the M&A casanova. His conquests included buying Playtech’s 29pc stake in digital business William Hill Online, acquiring the Australian and Spanish operations of Sportingbet and taking on Australian bookmaker tomwaterhouse.com.

Of course, when a CEO stumbles, at least some of their problems can be traced back to their predecessor. Mr Henderson was forced to spend a lot of time integrating those Aussie businesses and making them work.

Perhaps too much time. While he was doing that the online business was struggling, staff were leaving, the wheels were falling off. He’ll get a pay off of his £550,000 salary, plus benefits and some shares from pre-existing incentive schemes so he’ll be able to live comfortably enough while he considers his next move.

His successor might demand rather more than that. Hill’s wants him or her to have had CEO experience, digital experience (in particular), international growth experience. Betting industry experience would hurt. The company is going to find it tough to find someone who ticks all of those boxes.

Bookies have long struggled to find good chief executives. Hill’s paid Mr Topping a fortune to stay put before turning to Mr Henderson. What will help with the search is that job ought to be an attractive one. The brand is prestigious, the problems ought to be fixable, and all those deals the bookie has missed out on could represent an opportunity. While rivals are distracted by bolting businesses together, Hill’s could steal a march.

That gives finance chief Philip Bowcock a chance as he takes over as interim chief executive. Chairman Gareth Davis says he has been straight with him. Mr Bowcock is not at the head of the shortlist for the permanent appointment. But it might take as long as a year to get a replacement in place. If Mr Bowcock can get a grip on things during that time and the business starts to turn around he won’t be short of suitors. If Mr Davis struggles to find an acceptable alternative from outside the organisation, who knows. Right now William Hill could do with a few lightly backed outsiders coming in.