Ladbrokes fires Ames ahead of Q2 results

Ladbrokes director of product Richard Ames has left the company just days before the operator is to announce profits from its online business have more than halved compared to last year, with the relaunch of its sportsbook delayed until early 2013.

Ames, who was one of the few senior members of staff left from the previous regime of former CEO Chris Bell and who remains a director of the company, joined the Ladbrokes in 2005 as managing director of UK and Irish retail. He was promoted to managing director of product as part of Glynn’s personnel reshuffle in a bid to double the company’s share price by 2015, nicknamed ‘Project Galvanise’.

Ladbrokes released a statement at 1pm this afternoon announcing that Ames had “ceased to perform his executive duties with immediate effect” but that he would remain a director of the company with a further announcement regarding his departure to be made “in due course”.

The company added that it would provide additional information on “any management changes” during its interim results announcement on Thursday morning.

The restructuring also saw an overhaul of Lads’ egaming team, with 18-year veteran John O’Reilly leaving in November 2010 alongside former egaming MD Ed Andrewes, with Gary McIlraith joining as director of digital channels, international and strategy. However, a further reshuffle just six months later saw McIlraith depart with Glynn looking to pursue a “new, cross-channel, centralised” business with Ames placed in charge of product, Nick Rust as group head of channels, and Stephen Vowles as group director of customers. The Daily Telegraph reports that following Ames’ departure, Rust will now take over his responsibilities, suggesting a further shift in approach.

Other senior members of staff to depart since Glynn’s appointment include CIO Mitthu Sridhara; international development director Kevin Hopgood; and former trading director John Thompson, who is currently appealing his dismissal.

Ladbrokes issued a profit warning in June this year in which it blamed poor sportsbook margin and the delayed delivery of a number of technology projects for profits for the first half of 2012 falling to a predicted £16m ““ half the amount posted for the same period in 2011.

The warning came after Ladbrokes posted a 3.5% year-on-year decline in egaming revenues in its full-year results of 2011. Despite this decline, Glynn still received a bonus of almost £500,000, though no awards were made to Ladbrokes’ directors under the performance share plan, as the company failed to meet targets for total shareholder return and earnings per share.

The redeveloped sportsbook platform ““ designed in-house as part of a £50m investment in boosting the company’s online presence ““ was originally due to be relaunched before the Euro 2012 football championships in June is understood to have been further delayed. The Telegraph reports that Glynn is set to announce that the sportsbook will not go live until the end of the year, resulting in Ladbrokes missing the Olympics and the start of the 2012-13 Premier League football season.

The Times newspaper today reports that Glynn could be considering a move to acquire betting exchange operator Betdaq for up to £50m. The two companies began talks in January this year over a deal which would see Ladbrokes buy in the betting exchange’s pricing and trading solutions to bolster its underperforming online division. Betdaq, under the guise of Global Betting Exchange, was founded in 2000 by Irish billionaire Demot Desmond as a rival to Betfair, however its market share is small in comparison. Desmond is the majority shareholder of Scottish football club Celtic and holds a 2% stake in Ladbrokes.

The decision to focus on what Glynn termed “organic” development was taken after separate discussions to acquire 888 and Sportingbet were halted with Glynn hinting that the price had deterred him from going through with the 888 deal, explaining at the time that the deal “wasn’t in the shareholders’ interests” and blaming “legacy issues”, including Sportingbet’s Turkish business, for the collapse of the other deal.

Commenting on the upheaval at the time, Simon French of Panmure Gordon urged Glynn and his board to “restore credibility” to resolve Ladbrokes’ “self-inflicted problems” as the company slipped further behind William Hill, which posted a 23% year-on-year rise in profits on Friday.

“Management needs to restore credibility to close the valuation discount between itself and key peer, William Hill. We would still prefer the group to appoint a dedicated Head of Digital to oversee day to day operations in this division,” French explained.

At the time of writing Ladbrokes’ share price stood at 160p, down 1.54%.

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Senior departures from Ladbrokes since Glynn’s arrival:

Kevin Hopgood, international development director, left March 2012 – 35 years at Ladbrokes

John O’Reilly, executive director, left November 2010 ““ 18 years with the company

Richard Ames, managing director of product, left July 2012 ““ 7 years

Richard Andrew, product and services director, left April 2012 ““ 6 years at Ladbrokes

Mittu Sridhara, Group CIO, left May 2012 ““ 4 years with the company

Ed Andrewes, managing director of egaming, left April 2011 ““ 3 years with the company

John Thompson, head of trading, left June 2012 ““ 18 months with Ladbrokes

Gary McIlraith, director of digital channels, international and strategy, left June 2011 ““ 11 months with company