BOOKMAKER Paddy Power kicked off a search for a new chief executive yesterday after announcing that veteran boss Patrick Kennedy would step down in 2015 following nearly ten years in the role.
“I have always had a personal view that after 10 years at the helm, change is good, both for the business and the individual,” said Kennedy.
Paddy Power’s shares fell four per cent yesterday to 56.70p after the Irish bookmaker also warned that football results in March had resulted in its two worst weekends ever for football profitability and would hurt its first-half results.
“Given the group’s very impressive track record under his tenure, this is likely to lead to a period of uncertainty for investors with questions in relation to succession and the group’s willingness and ability to pursue significant strategic opportunities in the interim period,” said Davy analyst David Jennings.
For its full year results the firm expects the March hit to be offset by sales growth and the later-than-expected introduction of an Irish online and phone betting tax. The amount of money staked by users rose 15 per cent in the year to date and total revenue was five per cent higher.
PROFILE: PATRICK KENNEDY
The news that Patrick Kennedy will step down next April surprised investors yesterday. Under Kennedy’s leadership the bookmaker has gone from strength to strength with its shares rising nearly 400 per cent since 2006. Kennedy has been, at times, a controversial figure provoking outrage with stunts such as taking bets on the Oscar Pistorius murder trial and the skin colour of the new pope. He first joined the group in an executive capacity in September 2005 and became chief executive in January 2006. Prior to Paddy Power Kennedy was finance chief at Greencore Group, having previously worked as director of group development.
“He has overseen a period of exceptional development and growth in Paddy Power: in 2005, we earned pre-tax profit of €31m (£25.23m) last year it was €141m,” said chairman Nigel Northridge. Kennedy yesterday said he was uncertain what his next move would be, only that he would never work for one of Paddy Power’s competitors. “A key question now is what this means for the group’s ability to execute large strategic transactions in the interim,” said Davy analyst David Jennings. With no successor named and a search underway, investors will have to wait a little longer to find out who will lead Paddy Power for the next decade.