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 Simon Bowers |
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| • New boss
Richard Glynn says Ladbrokes has 'lost touch with customers' • Group
reports profit of £104m, slightly ahead of expectations • New
management team brought in after boardroom shakeup Richard Glynn, the chief executive of Ladbrokes, has delivered a withering assessment of the group's past failures and outlined a radical management revamp to help Britain's largest bookmaker catch up with better-performing rivals. Delivering his verdict on the business he inherited this year from his predecessor Chris Bell, Glynn described Ladbrokes as a bookmaker riddled with "operational weaknesses". In his assessment, which followed a three-month business review carried out with the help of the turnaround advisers AlixPartners, he said that there had been "too much brand over-reliance, and too much wasted investment, too little strategic focus, too little e-excellence, too many sub-optimal supply terms ... too many priorities, and, in truth, too many excuses. "As a direct consequence we have lost touch with our customers; we have fallen behind in [betting shop slot] machines; we have made expensive and visible international mistakes. We have operated inefficiently and perhaps lost brand resonance." In particular Glynn highlighted failures to keep pace with fast-changing trends in online bookmaking, especially popular innovations in so-called "live betting", allowing punters to get odds that shifted in real time as a race or match progressed. The Ladbrokes chief executive is well-versed in the technical challenges of live betting, having made his name building up Sporting Index, the online spread-betting company. As part of a management overhaul, John O'Reilly, who oversaw the group's international and online operations and has been at Ladbrokes for 18 years, is to leave. He had been widely tipped as a successor to Bell before Ladbrokes' disastrous foray into the Italian market and the poor performance of its web offering. Taking over the group's e-commerce operations as well as strategic development responsibilities is Gary McIlraith, hired from AlixPartners. Also joining to take charge of the high street shops is Coral's Nick Rust. Ladbrokes, like its closest rival, William Hill, had seen its earnings soar for much of the past decade, largely on the back of a 2001 tax change that allowed bookmakers to install four highly lucrative touch-screen roulette machines in each shop. These terminals now generate about 40% of shop takings but growth from them has stalled in the past two years. Meanwhile, the two bookmaking groups have found themselves outflanked on the internet – companies such as Bet365, Bwin, Sportingbet and Unibet have made large market-share gains across Europe. Glynn said that the group's international expansion plans were no longer likely to involve Ladbrokes consumer branding. Its joint venture business in Spain already trades under the Sportium brand, and a recently agreed venture with Canal+ in France will carry a Canal branding. "The Ladbrokes name may not have the same resonance with overseas consumers," he said. Summing up, Glynn said: "We have to become digital and retail experts. We have to achieve this either organically or, if the right opportunity presents itself, through other means." This was a reference to Ladbrokes' relatively strong balance sheet, which provides room for acquisitions after a £275m rights issue last year. Glynn was delivering his strategic vision for Ladbrokes as the group reported underlying operating profit, excluding the impact of its volatile high-rollers division, of £104m, slightly ahead of expectations. The amount won from punters during the football World Cup was a record £26m. Nigel Parson, a gaming analyst at Evolution Securities, said: "Glynn has a lot to do to close the gap with William Hill and develop a credible online strategy. His maiden results statement reads well, but now the hard work starts." Shares in the bookmaker closed up 8.6p at 147.3p. |
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