The board of directors for UK sportsbook operator William Hill is replacing CEO James Henderson after two years on the job, because of struggling revenue for online sports betting, according to media reports.
William Hill sacks CEO
The news came via a release at William Hill’s corporate website, with no details on the reasoning:
The Board of William Hill PLC (LSE: WMH) announces that James Henderson is stepping down as Chief Executive Officer with immediate effect. Philip Bowcock, Chief Financial Officer, has been appointed Interim CEO. The search for a permanent replacement has been instigated.
Chairman Gareth Davis commented:
“James’s career with William Hill has spanned over 30 years covering the Retail, Online and international businesses. We would like to thank him for his significant contribution and we wish him all the best for the future. Philip has a clear set of priorities as Interim CEO, principally the continued turnaround of the Online business. We will confirm a successor in the coming months.”
So why is Henderson out?
William Hill made no indication of why it was cutting ties with the CEO in its press release. But Bloomberg reported that it was because of the “U.K. bookmaker’s struggle to keep pace in the fast-growing world of online betting” after an interview with Davis:
“Online is such a huge bellwether and as market leader we have high expectations,” Davis said. “We have stalled abruptly and lost share significantly in the last year or so.”
The Financial Times, chalked it up to market forces:
His departure comes after a difficult time for the group, which has found itself suddenly isolated in an industry hit by harsher regulation and higher taxes. William Hill, once the clear leader in the sector, has faced an increase in competition from its rivals, which have gained strength in a difficult market by joining forces. Betfair and Paddy Power last year agreed a merger, and Ladbrokes and Gala Coral are also combining.
The signs were visible in Q1 numbers
The ouster of Henderson would almost seem inevitable, given the underperformance of online sports betting in the first quarter.
While William Hill’s US operation showed solid growth, net revenues worldwide were lackluster in Q1. Online sports betting revenues fell by 17 percent in the first quarter; William Hill also tapped a new managing director of online to deal with the problems on that front.
Henderson had this to say at the time:
It has been a tough start to the year in Online, which is being impacted by both regulatory change and a gross win margin below normalised levels for the period due to a disappointing Cheltenham festival and unfavourable European football results. Trends in recent weeks remain in line with the guidance we gave in March.
Despite Henderson’s departure, William Hill said “trading remains in line with the previous guidance of £260-280m of operating profit in 2016.” Q2 results will be out at the start of August; those will include revenue from the Euro 2016 soccer tournament, expected to be a big moneymaker for European books.
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