Trevor Croker (pictured) is a “strong internal appointment” as the next chief executive for Australia-based slot machine maker Aristocrat Leisure Ltd, said a note from banking group UBS AG.
Mr Croker was named on Wednesday as chief executive-elect – subject to any necessary regulatory approvals – for when current boss Jamie Odell steps down in February 2017 after eight years at the helm. The latter announcement was also given on Wednesday.
“While an external candidate was considered, an internal candidate should cause less disruption to the business, in our view,” said the note from analysts Matt Ryan, David Fabris and Catherine Mai.
The bank noted Mr Croker had joined Aristocrat in 2009 and had worked closely with Mr Odell, holding operational and strategic roles including managing director of Australia and New Zealand – also covering the Asia Pacific region. The institution added that Mr Croker had also worked as interim chief digital officer, and most recently as executive vice president global products and insights.
Aristocrat’s shares had fallen by as much as 12 percent on the Australian Securities Exchange on Wednesday – a correction greater than the overall Australian market’s decline following news of the poll victory of Donald Trump as U.S. president-elect. The casino equipment maker’s shares rallied in later Wednesday trading, closing 5.9 percent down on the day.
“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,” noted UBS in its Wednesday memo.
But the UBS team added: “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,” a reference to casino slot machines, and to expand further into segments where Aristocrat currently had lighter penetration; including revenue participation with casino operators, digital and stepper products, and Class II video lottery gaming machines.
“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.
