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
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.