Objection from shareholders could hamper the board once more over the company’s ongoing search for a permanent CEO, a process now believed to be drawing to a close.
Delivered in tandem with William Hill’s full year report (which saw adjusted profits come in £1.5m above its second revised-down expectation), chairman Gareth Davis said: “at the outset of the CEO process, we made it clear that we would carry out a thorough search and that it could take some time.
“I am pleased to say that we are now entering the final stages and expect to complete an announcement in a few weeks’ time.”The group’s interim chief exec Philip Bpwcock is now belived to be the favourite to fill the role going forward; a decision Parvus is understood to object due to his lack of experience in the industry.
Bowcock joined Hill only 14 months ago, having previously worked as chief finance officer for Cineworld. Nevertheless insiders say the board is not split on Bowcock and are due to discus the matter at the start of March. Delays however, are not off the cards.
Other potentials cited by those involved include Andy McCue, former CEO of Paddy Power. McCue is said to have required powers to appoint his own management team, which Hill denied.
Others approached have been Kenny Alexander of GVC, who also turned the offer down, and former COO at Betfair Mark Brooker who refused the top job but joined the board in the Autumn.
The company’s performance is undoubtedly souring the bid; problems working with the current leadership have been cited by some of these unwitting candidates; as has the impending shift in retail regulations, which are expected to put significant strain on a particularly exposed William Hill.
Another factor could be Hill’s stingy approach to bonuses. Among the figures in Hill’s full year results is a drop in short-term remunerations for directors, from £2.5m in 2015 to £1.5m in 2016. Poor performance is perhaps good reason to lower your rewards, but some believe this is keeping suitors at bay. And there aren’t all that many to choose from.
“I think for the gaming industry [on] the whole, there is a narrow talent pool at the top of the industry,” said Simon French, an analyst at Cenkos. Part of the task is appoint someone with experience in the digital realm, an area which, although improving at the back end of the year, Hill has found specifically frustrating.
The problem, French considers, is that “a lot of the entrepreneurs who were founders of the internet gaming companies have done well and cashed out. As the industry matures, these companies need a different skill set.”
Adding to Hill’s HR void, chair Gareth Davis also announced his intention to slip away: “I would envisage, once an orderly handover has been completed, to be in a position to retire from the moard before the time of the 2018 AGM.”
Despite these sour notes, markets were cheered by the group’s full year postings, with shares climbing by five percent – the largest and most welcomed lift in a long time.
Operating profit may have fallen by 10 percent, but revenues grew by one percent and there were strong signs of recovery towards the end of the year, said analysts. Most of everything else they already knew.
“2016 was a tumultuous year for William Hill, with failed mergers, poor trading, topped off by disappointing sporting results at the back end of the year; a new CEO is yet to be appointed,” said Greg Johnson, analyst with Shore Capital.
However, Hill had ensured that all these difficulties “had been well flagged” throughout the period, leaving investors pleasantly surprised at recent “signs of life.”
“We are encouraged that momentum is beginning to accelerate (from a low base) although the risk around machine stakes is likely to continue to weigh on the price.”