Aristocrat shares dip on announcement
Australian slot-machine giant Aristocrat Leisure, Ltd. announced that Jamie Odell, the company’s chief executive and managing director for the past eight years, will retire at the end of February. The company’s board appointed Trevor Croker, Aristocrat executive vice president for global products, to succeed Odell as CEO.
“An orderly and phased transition process has begun, with Jamie continuing to lead the business until Trevor assumes the CEO role formally from March 1, 2017,” the company said in a statement.
The company reported that Croker, who is CEO-elect pending regulatory approvals, will relocate to the U.S. in 2017 to assume the permanent CEO role. “North America generates Aristocrat’s largest revenues,” the company said, “and offers the business its most significant strategic opportunities.”
It was in North America that Odell did the most to turn Aristocrat’s business around, bringing in game design talent and pursuing licensed brands to boost the company’s gaming operations business. During Odell’s tenure, Aristocrat’s market capitalization grew from AUD1.7 billion (US$1.3 billion) to an all-time high of approximately AUD10.6 billion.
“The board respects Jamie’s decision to depart at the end of February 2017 after a remarkably successful eight-year tenure that has transformed the business,” said the chairman of the board of Aristocrat, Ian Blackburne.
“I am proud of everything our team has achieved at Aristocrat over the past eight years,” Odell said in a statement. “We have established sustained momentum in our core business, and made significant progress in driving recurring revenues, exiting distracting businesses, executing accretive mergers and acquisitions and overhauling our organizational culture and structures.”
Croker joined Aristocrat with Odell in 2009 from beverage company Fosters. He served as managing director of Australia and New Zealand, led the company’s operations in the Asia Pacific region, and served as interim chief digital officer before being appointed executive vice president.
“The board is delighted to name Trevor Croker CEO (elect) of Aristocrat,” Blackburne said. “Trevor has played a key part in Aristocrat’s successful turnaround and outstanding growth, having worked closely with Jamie Odell and other key leaders as a member of the executive leadership team over the past seven years.”
Aristocrat’s shares on the Australian Securities Exchange initially fell nearly 12 percent on the announcement of Odell’s retirement, before rallying to end Wednesday with a 5.9 percent dip.
Analysts were favorable of Croker’s selection to succeed Odell. “While an external candidate was considered, an internal candidate should cause less disruption to the business, in our view,” said a note from analysts Matt Ryan, David Fabris and Catherine Mai of banking group UBS AG. “Aristocrat’s market cap has increased by more than six times during Jamie Odell’s tenure and so as a result, we believe the CEO succession could concern some investors, (but) the core driver of game performance (and sales) are the game designers and sales team, which remain in place.”
The bank also said the strategy of the business was “already in place”, identifying it as continuing “to grow share in core Class III markets,” and to expand into stepper products, and Class II slots.
“Investment in the business remains high, with research and development as a percentage of sales still at approximately 11 percent, having grown by almost 100 percent in the past three years,” said UBS.
