Paddy Power Plc (PWL) fell the most in almost six months after Chief Executive Officer Patrick Kennedy said he’ll leave Ireland’s largest bookmaker after leading the way into online betting during almost a decade in charge.
Kennedy will step down in April 2015 after heading up Paddy Power since January 2006, the Dublin-based gaming company said today.
The departure marks the exit of one of the longest-standing Irish CEOs after he pushed Paddy Power to expand online and outside of Ireland, as well as consistently drawing publicity for the company through a series of novelty bets. Since 2006, the company’s shares have more than quadrupled, giving the company a market value of 2.8 billion euros ($3.9 billion).
Kennedy’s departure plans are “likely to lead to a period of uncertainty for investors,” said David Jennings, an analyst at securities firm Davy in Dublin, who has a neutral rating on the stock. “There’ll be questions in relation to succession and the group’s willingness and ability to pursue significant strategic opportunities in the interim period.”
The company’s shares dropped as much as 5.5 percent, the most in intraday trading since Nov. 22, and traded at 56.84 euros, down 4.1 percent as of 9:06 a.m. in Dublin.
“After ten years at the helm, change is good, both for the business and the individual,” Kennedy said in a statement. “It’s as fun and as interesting a job as anyone could have.”
Kennedy cultivated an image for Paddy Power in the U.K. that was “cheeky and fun,” he told Bloomberg News in a 2011 interview. The company emblazoned its logo across Danish footballer Nicklas Bendtner’s underpants during a game in 2012, which he revealed when he scored. Customers can also wager on the manner in which Wikileaks founder Julian Assange will leave the Ecuadorean embassy in London.
Paddy Power also took bets on the outcome of the ongoing trial of Oscar Pistorius, who’s accused of murdering Reeva Steenkamp, and said it would refund all losing bets if the double-amputee South African athlete was found not guilty and were to “walk.”
Watchdog agency Advertising Standards Authority for Ireland, which received 65 complaints over the offering, found it breached marketing rules and told Paddy Power not to use it again, according to the ASAI’s website.
Kennedy was paid a total of 1.4 million euros in 2013, according to the company’s annual report. He joined Paddy Power’s board when he was chief financial officer of Greencore Group Plc (GNC), according to a company filing. He previously held roles with KPMG LLP and McKinsey & Co., the filing shows.
Paddy Power’s net revenue for 2014 through May 11 increased 17 percent in constant currencies, even after poor results in January and March and two of the worst weekends ever for making money on football bets, the company said today. The company said it expects “positive top-line momentum” to help offset these results for the rest of the year.
Kennedy “led the company on an aggressive expansion plan, which has transformed the industry by revolutionizing online betting,” said Mark Murnane, head of trading at spread-betting firm Shelbourne Markets in Dublin. “He’s synonymous with Paddy Power and his clear success as CEO over close to a decade adds shareholder value.”
To contact the reporter on this story: Donal Griffin in Dublin at firstname.lastname@example.org
To contact the editors responsible for this story: Dara Doyle at email@example.com David Risser