GVC boss de­cides to cash in his chips

The gam­bling gi­ant’s founder has called time on his 13-year reign af­ter sur­viv­ing a num­ber of mis­steps at the owner of Lad­brokes

The Daily Telegraph - Business - - Front Page - By Oliver Gill and Si­mon Foy

KENNY ALEXAN­DER, the ex­ec­u­tive cred­ited with trans­form­ing GVC from gam­bling min­now to one of Bri­tain’s big­gest op­er­a­tors, has an­nounced his re­tire­ment just weeks af­ter in­sist­ing he was here to stay.

Mr Alexan­der said he wanted to spend more time with his fam­ily af­ter 13 years at the helm. Op­er­at­ing chief

Shay Segev will take over at the owner of Lad­brokes and Co­ral to­day.

Mr Alexan­der said: “I have spent the last four months work­ing from home and re­flect­ing on my fu­ture plans. This feels like the right mo­ment. While it is never easy to hand the ba­ton on, it has been very clear for a num­ber of years now that Shay is the right per­son to suc­ceed me.”

Shares fell 5pc to 864p in noon trade. The stock has re­cov­ered most of its virus-in­duced losses af­ter slump­ing to about 325p in mid-March.

The an­nounce­ment came as GVC re­ported “en­cour­ag­ing” trad­ing. Net gam­ing rev­enue fell 22pc in the sec­ond quar­ter due to store clo­sures, but on­line rev­enues were up by more than a fifth.

It ex­pects first-half core prof­its to be in the range of £340m to £350m.

Well, what were the odds on that? Less than 12 months af­ter declar­ing he would stay on for “at the very least” an­other three years, GVC’s “roll-up king” Kenny Alexan­der is off, tak­ing the share price with him too by the looks of things. The gam­bling gi­ant’s stock tum­bled as much as 5pc, equiv­a­lent to £240m, on the news that the ar­chi­tect of GVC’s re­mark­able rise is leav­ing af­ter 13 years.

Still it makes a change from past wipe­outs, like the time he and then-chair­man Lee Feld­man sold £20m worth of shares at the rather pre­cise num­ber 666p, leav­ing him with an equally pre­cise 666,666 shares.

The lit­tle devil. Only days ear­lier Alexan­der had com­plained that the stock mar­ket had sorely un­der­val­ued the book­maker. So was it a joke or had he been spend­ing too much time round a Ouija board? A “co­in­ci­dence” ap­par­ently. It cer­tainly wasn’t in the least bit funny for other in­vestors – the share price crashed 18pc in one day.

But there was also an­other mat­ter: the pair had signed off on each other’s share sales, con­trary to good prac­tice which states that a di­rec­tor should get the ap­proval of an in­de­pen­dent col­league be­fore of­fload­ing stock.

Alexan­der fol­lowed up that stunt with a 42pc in­vestor re­volt against an eye-wa­ter­ing £19m pay packet at the com­pany’s AGM, which it in­ex­pli­ca­bly chose to hold in Gibraltar.

Then to com­plete his win­ning streak, Alexan­der forgot to dis­close that one of the peo­ple that GVC had handed its Turk­ish wing to was some­one that he owned a stud farm in Ayr­shire with. Whoops.

But does any of it mat­ter? Well, yes and no. If you were one of the lucky ones who took a punt on GVC 13 years ago when it was an AIM-listed min­now worth just £25m and held on for the ride, you’d still be count­ing your win­nings.

Alexan­der has turned the bookie into a £5bn bet­ting and gam­ing be­he­moth and FTSE 100 con­stituent through a flurry of trail­blaz­ing deals in­clud­ing 2017’s takeover of Lad­brokes Co­ral.

No won­der then the com­pany has been able to get away with some of these shenani­gans. The City is fa­mously meek on cor­po­rate gov­er­nance mis­de­meanours when a stock is head­ing in the right di­rec­tion and GVC’s share price has re­cov­ered quickly ev­ery time, so if there’s lit­tle last­ing dam­age then why all the fuss?

Well, be­cause there’s al­ways a chance that the next foul-up is more costly. Take Boohoo, where founder Mah­mud Ka­mani wields enor­mous power as the largest share­holder and ex­ec­u­tive chair­man. Al­leged sup­ply chain abuses have seen the chain go from hero to zero and its share price roughly halve in the space of days with no ob­vi­ous cat­a­lyst for it to bounce back any time soon.

An in­ves­ti­ga­tion by top QC Ali­son Le­vitt should help re­pair the com­pany’s rep­u­ta­tion and re­build trust with share­hold­ers but that isn’t set to be con­cluded un­til next year. If there had been greater board in­de­pen­dence, the whole af­fair might have been avoided in the first place.

With Alexan­der fi­nally cash­ing in his chips, there is now a golden op­por­tu­nity for GVC to clean up its act for good.

‘The City is meek on gov­er­nance when a stock is head­ing in the right di­rec­tion’

Cen­trica’s strong-arm tac­tics

So this is what Cen­trica chair­man Scott Whe­way meant back when he said the com­pany had ap­pointed “the right leader” to “nav­i­gate… through and be­yond the Covid-19 cri­sis”.

That was in April and by June, for­mer fi­nance chief Chris O’Shea had un­veiled 5,000 job cuts.

Not con­tent with ax­ing roughly a fifth of its fa­mously loyal staff dur­ing the worst eco­nomic cri­sis in liv­ing mem­ory, a cri­sis that many have coura­geously con­tin­ued to work through, the com­pany be­hind Bri­tish Gas is now at­tempt­ing to strong-arm the rest of the work­force into ac­cept­ing new pay and con­di­tions.

If the re­main­ing 21,000 em­ploy­ees don’t ac­qui­esce, Cen­trica is pre­par­ing to force the changes through with some­thing called an s.188 no­tice, un­der which they could be made re­dun­dant be­fore be­ing of­fered their old jobs back on re­vised terms.

The de­plorable move is be­ing jus­ti­fied on the grounds that the com­pany wants to cre­ate “a more cus­tomer-fo­cused busi­ness model”.

An­other way of look­ing at it is that the work­force is pay­ing the price for years of in­com­pe­tence at the top.

Too greedy for their slice

The his­tory of Pizza Ex­press is a fa­mil­iar one. For the first three decades it barely grew at all. It then achieved na­tional sta­tus dur­ing a decade on the pub­lic mar­kets but in­stead of stop­ping there it kept on grow­ing and grow­ing un­der a suc­ces­sion of buy­out firms.

Now, stuck with 600 branches glob­ally and debts of £1.1bn, its lenders are hav­ing to bail the chain out and close scores of restau­rants. An­other great UK name led blindly to the brink by the dead hand of pri­vate eq­uity.

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