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By Sarah Young
LONDON (Reuters) - British bookmaker Ladbrokes (L:LAD) said it would replace under-pressure chief executive Richard Glynn after five years in charge, seeking a new leader to help strengthen its online operations.
Shares in Ladbrokes traded almost two percent higher at 9.20 a.m. on Wednesday, reflecting hopes that the change would enable the company to close the gap on market leader William Hill (L:WMH) and compete better in the growing online sector.
"The feeling out there is that maybe a CEO change might change the fortune of the business in a positive direction," Panmure analyst Karl Burns said.
Ladbrokes, Britain's second largest bookmaker, reassured investors that it was trading in line with its expectations for 2014 and was confident of progress next year.
It said that Glynn had agreed to continue as CEO into 2015 to oversee what it termed an orderly succession, with the search for a new boss to start shortly.
Analysts said that Glynn's position had been under threat after profit warnings last year caused by problems in its online business. In its statement, Ladbrokes emphasised said that Glynn's mandate had been to turn around the company within five years when he took the job in 2010.
The new CEO will face a tough challenge.
The British gambling industry must absorb additional taxes totalling almost 400 million pounds over the coming year and also faces tighter regulation of betting shops.
William Hill and Irish bookmaker Paddy Power (I:PAP) have both promoted company insiders to the CEO job in the last six months.
However, Ladbrokes might look to bring in someone from outside the company.
"We would expect the group to appoint an external candidate given the recently announced departure of Nick Rust who would have been the most likely internal appointment," Cenkos analyst Simon French said, referring to Ladbrokes' retail director.
Rust is leaving Ladbrokes to become the chief executive of the British Horseracing Authority.
Shares in Ladbrokes are down 24 percent over the last six months, lagging William Hill which is flat in the period.
(Reporting by Sarah Young; editing by Kate Holton/Keith Weir)