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Falling share price and executive departures bedevil Betfair

Written 5.23.11 :

TROUBLE AT THE WORLD'S LARGEST BETTING EXCHANGE?
 
Falling share price and executive departures bedevil Betfair
 
Following a recent employee poll that showed a disquieting belief that the company lacks direction, Betfair directors are currently wrestling with problems that include a declining share price and the resignation of several middle managers, reports the Guardian newspaper in a weekend article.
 
The departures this year have included Mathias Entenmann, chief product and services officer; Charlie Palmer, head of mobile; and Robin Osmond, chief executive of financial betting exchange LMAX.
 
Lee Cowles, director of UK sports and gaming, is understood to have told staff he will also be leaving.
 
"These have been joined by director of European and public affairs Tim Phillips, head of strategic programmes Emily Foges, director of site products and services Rob Glynne, head of sports exchange products Alex Deacon, IS director Tony Rigby, and Don Fotsch, vice-president of global user experience," the Guardian report reveals.
 
Meanwhile, the group's shares, which listed at GBP13 last autumn, have slumped from around GBP10 in early April.
 
"The latest sell-off, which saw the price hit a low of 778p, is thought to have been triggered by predictions that next month's results announcement will be lacklustre, heaping more pressure on chief executive, David Yu," reports the newspaper. "Analysts at Investec, who have a 445p share price target, predict pre-tax profits of GBP21.9 million for the 12 months to April the same as in 2010."
 
A source reportedly "close to Betfair" told the Guardian that the company had lost too many good managers, and that there is no leadership.
 
"It is a given that there will be no growth [in the annual results] as for a long time the company has been running hard to stand still," the source said. "If good decisions were made and proper structures put in place the company would be able to accelerate quickly."
 
The source said that employees have been primed to expect no bonuses in 2011.
 
A spokeswoman for Betfair gave the company line, saying: "We are a growing business and in the past 12 months our headcount has grown by more than 20 percent. We are always looking to bring great people into the business and are actively recruiting at the moment to make sure we have the best people in every role."
 
On the results of the staff survey, she added: "Like any good employer we want to hear everyone's views on how we can keep getting better."



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