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The musical chairs continue at Paddy Power Betfair this morning, with CFO Alex Gersh set to leave his role after six years for personal reasons. The betting chain has seen a significant period of transition in the upper echelons of the business, with a long list non-executive directors as well as the head of marketing Johnny Devitt (February) and Australia chief Cormac Barry (January) moving on following the departure of former CEO (and ex-Betfair chief) Breon Corcoran in January.
It seems that new CEO Peter Jackson is creating a new fellowship at the top of the business.
While shares are trading marginally offside (down just under 1%), the latest in a string of departures/changes has left shareholders relatively unfazed. This suggests that those invested in the company have much more pressing issues on their mind than a continued changing of the guard; specifically, the final ruling in a review of fixed-odds betting by the UK government that looks likely to see the maximum stake reduced from £100 to £20, perhaps even below £10. A long-running saga that threatens to change the landscape of UK high street betting, analysts have estimated that bookies may face a £150m black hole that needs to be filled.
Even more pressing are Wednesday’s full-year results, the first to be presented by new CEO Jackson. Although healthy improvements are expected to both revenues and EBITDA, there are concerns about whether the company’s online business will deliver a widely hoped for uptick to offset the aforementioned regulatory cloud.
Henry Croft, Research Analyst, 5 March 2018
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