Paddy Power bets safe as insider to take on CEO role in 2015
Paddy Power has bet on its own head of retail operations, Andy McCue, after announcing that he'll replace out-going chief executive Patrick Kennedy.
Mr McCue (39) has been with the company for eight years and been a member of the group's management committee for the last five years.
Analysts said the appointment from within the Paddy Power ranks was unsurprising given the strength of its executive talent pool.
A Scotsman, Mr McCue heads up Paddy Power's retail business in Ireland and the UK, a post he took on last year after a major management reshuffle at the group.
He's also responsible for the group's regulatory and public affairs. Paddy Power has a portfolio of about 550 shops across Ireland and the UK.
Those outlets in the UK saw combined operating profit jump 26pc in the first half of this year to €9.5m.
Profits at the Irish stores in the same period climbed 13pc to €8.6m, with the amounts staked by customers at outlets here having risen 11pc to €548m in the first six months of 2014.
Paddy Power chairman Nigel Northridge said that the company's nominations committee undertook a "comprehensive international search" for a new chief executive.
"We were very pleased, if unsurprised, with the calibre of the candidates from inside and outside the business," he said.
Mr Northridge added that Mr McCue had an "outstanding track record and has consistently demonstrated strong leadership across the business".
Patrick Kennedy also welcomed the appointment of Mr McCue, who will take up his new post on January 1 and immediately joins the board. Mr Kennedy previously didn't rule out remaining as a non- executive director of Paddy Power once his tenure as CEO ends.
But he said a decade running the company was enough.
"Change is a good thing for both the business and the individual," he said in May.
"I've always felt that 10 years in a role like this is enough time at the helm. It's no more complicated or exciting than that."
Paddy Power chief financial officer Cormac McCarthy had immediately ruled himself out of the CEO race.
Other likely contenders for the hot seat were thought to include Cormac Barry, who heads the company's Australian arm, and Peter Donovan, who has headed Paddy Power's online operations since 2009.
Mr McCue is an economics and management graduate of Cambridge University.
He also holds a Masters in Finance from London Business School. Prior to joining Paddy Power he was a principal with OC&C Strategy Consultants and a manager at Andersen.
He said that Mr Kennedy had "transformed" the Paddy Power business over the last 10 years and said he intended to build on that legacy.
Analysts reacted positively to Mr McCue's appointment.
Last week, Paddy Power blamed a run of results that favoured punters for hitting its first-half profits, which fell 14pc to €60.1m despite its net revenue climbing 7pc to €396.5m.
The company also said that its Italian business, which it launched in 2012, will take longer than expected to break even and won't do so now until the middle of 2016 following slower than anticipated market growth.