Aristocrat begins hunt for new boss

Their departures appear to have ended a purge of senior executives begun after a $28.8 million profit downgrade was announced two months ago.

Also yesterday, the company's chairman, John Ducker, announced more than $16 million in write-downs following the restructuring of several contracts in South America and changes to management in North America. The write-downs are expected to drag first-half earnings into the red.

Final payouts for Mr Randall and Mr Jeyaraj were still being negotiated, Mr Ducker said. He said there would be ``no giveaways".

``There was an encouragement to both gentlemen to depart," he said.

Mr Ducker said that if Mr Randall had designs on the company's $4.1 million house at Balmoral, he would have to buy it at market prices.

Investors welcomed the management changes, pushing the shares 14c higher to $1.79.

Shares in Aristocrat have more than halved in value since February 7, when it downgraded its full-year profit forecast from $109 million to $80.2 million.

Mr Ducker said he was confident that the changes to senior management, coupled with improved operational and communication systems, including greater scrutiny of contracts in South America and ensuring the board was fully informed, would begin to repair the company's tattered reputation.

``Frankly, we bungled the announcement [about the profit downgrade] and the market punished us severely for the mistake," he said. ``Since then the board focus has been in finding out what went wrong . . . and fixing them."

Mr Randall left Aristocrat during the week, while Mr Jeyaraj is expected to leave at the end of June.

Aristocrat's group general manager of sales, David Creary, has been promoted to acting chief executive while Aristocrat searches for a new chief executive and a chief financial officer.

Helping him will be former Aristocrat executive director Stephen Cohn, who has agreed to help the board's overhaul of the company.

Aristocrat said trading conditions in the first half had been tough, with Australian earnings expected to drop.

Earnings in Japan are expected to be in line with the previous corresponding period, while other regions are expected to improve.

CCZ Equities analyst Tony Waters said that, apart from the write-downs, Aristocrat's North American operations seemed to be performing well, but expressed concern about the lack of changes at board level.

``I think it is strange that the whole onus is being put on senior management . . . There could be another final chapter to play out."