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Tuesday, 18 December, 2018

Paddy Power Betfair shares slump as CEO Corcoran reveals departure

Paddy Power Betfair: £6bn merger was overseen by Corcoran
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Shares in Paddy Power Betfair went on the slide on Monday after it was revealed that Breon Corcoran was stepping down as CEO after 16 years with the business.

Corcoran, 46, who led the £6 billion-plus merger between Paddy Power and Betfair and has been widely regarded as a success in the role, indicated he wanted to do something else with his career before it was too late.

No date was given for his departure but his successor has already been found, with Peter Jackson announced as his replacement. Jackson, boss of payment processing group Worldpay, was already an independent non-executive director at Paddy Power Betfair.

When the stock exchange opened the reaction was negative, with shares falling 8.5 per cent from Friday's closing value to their lowest level in 21 months. They ended the day 4.67 per cent down at £75.50.

Breon Corcoran: we've built a business that's a structural winner and has a very bright future

To some surprise rumours had emerged at the weekend that Corcoran could quit, and a press release confirmed the news, suggesting his intentions had been known for some time, with Jackson's appointment having followed "a rigorous and extensive succession process".

Corcoran said: “I've been privileged to work with many exceptional people over the last 16 years and the business has a talented, stable and motivated management team. We've built a business that's a structural winner and has a very bright future.

"This was a very difficult decision to make, and there's never a good time to leave, but this is the right decision for me and my family, and following the successful completion of the merger integration it's an opportune time for the business too. I look forward to watching the continued success of Paddy Power Betfair as a shareholder.”

Jackson, 41, has been CEO of Worldpay's UK arm since March this year, having previously held the same role at Travelex. He has been a member of the board since 2016, having been an independent, non-executive director of Betfair since 2013.

He said: "I'm excited about the prospect of joining the Paddy Power Betfair executive team. Paddy Power Betfair has some of the leading brands in the global gaming industry and the business has great prospects. I look forward to leading the team, and continuing to serve our global customer base.”

Peter Jackson: set to replace Breon Corcoran as Paddy Power Betfair CEO

Ivor Jones, an analyst with City brokers Peel Hunt, said: "Breon has been there a long time, 16 years in total. It makes sense for a pretty substantially well-off man to go and find something else to do.

"I don't know the replacement but he sounds a credible person having been on the Betfair board since the time of the IPO [initial public offering] and has had extensive experience in several businesses. The board all know him and know he has executive experience. It seems like an excellent way of managing a succession of a business."

Unusually, news of Corcoran's departure was accompanied by some details of the group's interim financial results 24 hours before they were due to be unveiled on Tuesday morning.

Revenue for the six months ended June 30, 2017 grew nine per cent and earnings before interest, tax, depreciation and amortisation [Ebitda] was up 21 per cent. The company said it would also confirm trading was in line with expectations and provide guidance for full-year [2017] underlying Ebitda of between £445-465 million.

Of the financial results, Jones added: "Possibly people had been hoping for good trading news tomorrow, an upgrade. Given what William Hill and Ladbrokes have said about sporting margins in their interim results, it seems unlikely Paddy Power would have had a stellar first half."

Jones also referenced ongoing uncertainty over gaming machines and whether government will restrict stakes. 

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This was a very difficult decision to make but this is the right decision for me and my family
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