Shareholders in UK based gaming operator Ladbrokes have issued a warning to the board that the company must immediately look improve performance, after Ladbrokes published its fourth profit warning to shareholders in 2013. UK News and business sources have commented that the shareholders and boards are prepared willing to give CEO Richard Glynn a further 12 months to turn-around company operations and performance. Mr Glynn has thus far recieved £1m in free shares as part of his CEO bonus scheme.
Ladbrokes woes in 2013 have been well documented by UK and industry media. A the core of the companies list of issues, has been Ladbrokes poor digital performance, which has seen the company report figures of £17.5m below expected company target. The situation has been tougher on Ladbrokes as PLC competitors in igaming Paddy Power and William Hill have witnessed strong growth in 2013, which have been boosted by growth in mobile verticals.
CEO Richard Glynn was hired from UK sports spread betting firm Sporting Index in April 2010, with the key focus to establish Ladbrokes as the leader in digital gaming. Glynn was acquired to the position of CEO with a lucrative package that included a £12 million bonus scheme that would be triggered if the operator reached certain growth targets.
Shareholders have been keen to point out that Mr Glynn and the board have continually changed strategies and focus of its digital operations. They fear that Ladbrokes may have lost too much ground to key competitors in the digital space. One top ten shareholder told UK business newspapers that the digital performance of Ladbrokes was ”completely unacceptable at any level’
Peter Erskine, chairman of Ladbrokes, sprung to Mr Glynn’s defence, issuing a statement as part of the group’s interim management statement on Thursday. Erskine commented that the board were “fully confident” that the current management team can deliver the group’s latest digital strategy, which he insisted, is “the right one”.
However business and industry commentators have labelled this as the kiss of death by the board to Glynn, many feel that the CEO will be ousted in the coming months as the company looks to restructure and bring in new blood for 2014.
2013 performance by Ladbrokes has been closely monitored by the city, as rumours have began to circulate of a possible takeover. Simon Davies, analyst at Canaccord Genuitycommented to UK newspaper ‘The Daily Telegraph’, ‘the performance of the digital business has been “beyond disappointing’, he further added that online profits have tumbled from £63m to less than £14m during Mr Glynn’s tenure.