ALL 0.05% $46.97 aristocrat leisure limited

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  1. 4 Posts.
    April 4, 2003
    Aristocrat Leisure (ALL) shares have been halted this morning pending an announcement that has been speculated to disclose the resignations of chief executive Des Randall and chief financial officer Lionel Jeyaraj following a review of the company’s North and South American businesses in light of its dismal full-year profit result.

    Today’s media has reported that long-time Aristocrat executive David Creary, now group general manager of Aristocrat Technologies, would replace Mr Randall.

    Aristocrat’s expected statement regarding a management review of operations comes after a tale of sorry excuses for recent profit downgrades that has seen its shares fall around 70% in the past 12 months.

    In early February Aristocrat shares were smacked lower after the company cut its full year profit forecasts by 26% to $80.2 million, blaming a failed South American deal.

    The company previously indicated it was confident of meeting a market consensus forecast of $109 million.

    However in a “clarifying” announcement the company blamed the profit downgrade due to its North and South American businesses failing to meet management’s targets.

    Last month Aristocrat ousted three of its top executives in the US.

    Yesterday Aristocrat shares jumped on the rumours of the impending resignation of Mr Randall and Mr Jeyaraj.

    Other rumours- although not given the same exposure as the aforementioned talk- were of potential asset writedowns or a possible buyout from PBL to diversify its gaming business.

    SHAW Stockbroking analyst David Cooper said following the response to the resignation rumours investors may view “a new approach by fresh leadership” as an opportunity to venture back into what is the world’s second largest poker machine manufacturer.

    Mr Cooper laid out both sides of the case for Aristocrat. On the positive side, he said, the business remains viable on an ongoing basis.

    “Global markets remain large with a growing market share. Deregulation in the UK sees excellent opportunities in that market in 2004, an event which may provide a significant boost to earnings,” Mr Cooper said.

    However on the downside “issues are yet to be resolved, with no detail of a cleanup of the US operations, existing management remain operational while there is clearly very strong market support for their removal, and flat growth prospects for the current year.”

    Aristocrat shares are halted at $1.65

    This report is published by SHAW Stockbroking ("SHAW")

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