The resignation of Sun International CEO Graeme Stephens, which was announced late on Friday, has been met with surprise by shareholders.
Chief financial officer Anthony Lemming will take over in May 2017.
Shareholders queried why Stephens, who became CEO in February 2013, was stepping down amid crucial developments in the company that include the launch of Time Square, set to be the second-largest casino in SA, and the company’s offshore expansion into Latin America through a merger with Dreams.
Stephens would not elaborate on his new position on Sunday. On Monday New Zealand media reported that he has been appointed as the new CEO of SkyCity Entertainment Group, quashing speculation that he was headed for the financial services industry.
In a statement released after the markets closed on Friday, Sun International said that by the time Stephens left in April 2017, he would have achieved all the major objectives set for him by the company’s board.
Avior Capital Markets analyst De Wet Schutte said it was unfortunate that the initiatives the group had embarked on during Stephens’ tenure would come through only in the bottom line after his departure.
Stephens had been instrumental in steering the group in a new and sustainable direction, Schutte added.
"He certainly kept analysts on their toes by concluding a series of landmark deals for the company during his tenure. I think people will look back at his time at the helm and, among other things, appreciate the fact that he reduced Sun International’s over reliance on the Grandwest casino," he said.
Electus Fund Managers equity analyst Damon Buss said Stephens had driven several projects that would add significant value to the group.
"We have been concerned that Sun International had taken on too much all at once. Anthony Lemming is very capable and has been very involved with all the projects Graeme has driven. Being a more conservative individual, we hope that Anthony beds down the current projects so that they start producing the strong cashflows they should and allow the business to de-gear its stretched balance sheet," said Buss.
In the company’s statement, the Sun International board said it believed that its strategy remained relevant. The board said the short-to medium-term focus would be on bedding down some of the initiatives undertaken by the company.
"In line with Sun International’s succession plans, Anthony has been groomed to succeed Graeme and has been integrally involved in all aspects of the strategy, and is ideally suited to step into the CE role," the company said.
With Marc Hasenfuss