Sydney: Tabcorp Holdings, Australia’s biggest gambling company, fired its chief executive officer, Matthew Slatter, three weeks after reporting a profit slump that forced him to scrap plans to open casinos overseas.
Elmer Funke Kupper, head of the Australian unit, will take charge until a replacement is found, the Melbourne company said in a statement Wednesday. Slatter, 49, had been chief executive since October 2002 and left the company immediately.
Tabcorp’s first-half profit fell 22 percent as Slatter struggled to integrate computer systems at betting shops. Earnings growth lagged rivals Tattersall’s and Publishing & Broadcasting after paying to settle a dispute over live horse race broadcasts that cut revenue.
„There has definitely been pressure from investors for an improvement in performance,“ said Atul Lele, who helps manage the equivalent of AUD 350 million at White Funds Management in Sydney, including Tabcorp shares. „Companies have got to be careful with their outlook statements and actually deliver on them as this market is all about delivering.“
Tabcorp shares have returned 80 percent, including dividends since Slatter took the top job, compared with the benchmark index’s 134 percent total return, according to data compiled by Bloomberg.
After paying 2.2 billion Australian dollars, or AUD 1.7 billion, for wagering company Tab in 2004, Tabcorp still has not finished integrating the purchase, taking 30 million dollars in charges in the first half for restructuring and combining technology systems for betting shops.
„Most of it has gone well, some of it has not,“ Funke Kupper said on a conference call Wednesday.
Slatter also agreed to pay 27.5 million dollars annually to horse racing clubs in Sydney and Melbourne to end the standoff on broadcast rights that prevented gamblers watching the biggest events in betting shops. The dispute slowed wagering sales growth.
Last year’s 1.9 billion dollar bid for Unitab, the nation’s second-largest wagering company, was blocked by antitrust regulators and in 2005 Slatter withdrew from bidding to build Singapore’s first casino because he could not compete with bids from Las Vegas rivals. Melbourne-based Tattersall’s bought Unitab for 2 billion dollars in September.
The profit slump led Tabcorp to shelve international expansion for at least 18 months, including talks with Virgin Group to open a casino in Macao.
Tabcorp’s new chief executive will have to negotiate the renewal of slot machine and betting licenses with the Victorian state government that the company depends on for more than half its sales.
The company’s monopoly on off- track betting in Victoria and its duopoly with Tattersall’s for the state’s 27,500 slot machines both end in 2012. The government said it will decide this year who will get the license.
The company’s chairman, Michael Robinson, who plans to retire in November, expects a search for international and internal candidates to replace Slatter will take as long as four months.
Gaining approval to appoint a chief executive officer from outside the company will probably take another four months because of the multiple jurisdictions in which Tabcorp operates, Robinson said on a conference call.
Funke Kupper, hired by Slatter in January 2006, said he wants the top job. Other internal candidates may include the casinos head, Walter Bugno, and the chief financial officer, Matt Bekier, said Lele of White Funds.
„They do have a strong suite of individuals in there in that second tier but it’s clear the company needs a new leader to take them forward,“ Lele said. „Having a new CEO come in to shepherd through the license process will be important.“
Robinson met Tuesday with Slatter Tuesday after the latter returned from an overseas trip.
„We both concluded at the end of that discussion that it would be best if he left,“ Robinson said,
Before joining Tabcorp, Slatter was chief financial officer of AXA Asia Pacific Holdings, the Australian unit of Europe’s second-biggest insurer.
Funke Kupper was previously head of Asia-Pacific business for Australia & New Zealand Banking Group, the third- largest Australian bank.
Food chain’s chief resigns
Restaurant Brands New Zealand, a fast-food restaurant franchisee whose earnings probably halved last year, said the company’s chief executive officer, Vicki Salmon, resigned.
Salmon, who was hired to run the company in December 2003, will be replaced by Russel Creedy, the company’s director of commercial services, until a permanent replacement is found, it said.
Restaurant Brands, which owns the nation’s KFC, Pizza Hut and Starbucks Coffee franchises, is the second-worst performing stock on New Zealand’s benchmark NZX 50 index in the past 12 months, amid a slide in sales of pizza and costs to revamp its chicken outlets. The company last year took a charge to sell its unprofitable pizza stores in Australia.
Shares of Restaurant Brands fell 1 cent, or 0.9 percent, to 1.09 New Zealand dollars, or 75 cents, in Wellington.
Salmon also quit as a director. She was on the board when the company was formed in 1997 after Pepsico sold its New Zealand KFC and Pizza Hut restaurants in an initial public offering.