The market is trying to understand the abrupt departure of CEO Marcel von Aulock, who says it’s about quitting on a high note.

Marcel von Aulock’s resignation as CEO of Tsogo Sun is the latest in a line of somewhat unexpected CEO exits. First was Asher Bohbot of EOH, then Thabo Dloti from Liberty. Alan Olivier leaves Grindrod at the end of July after 30 years with the group; and André Meyer of Life Healthcare is also going.

At the end of the month, Von Aulock (42) will leave the company where he has worked since 1999, when he was 23, and which he has run for the past six years.

While it was known that Bohbot would at some point vacate his post and that Dloti had strategic differences with Liberty’s board, Von Aulock’s exit is an abrupt one.

By way of explanation, he says: “The danger of waiting too long [to leave] is that you make bad decisions in the business. You don’t want to do that — you want to leave on a high.”

Von Aulock is leaving a business that is “in great nick”, he says. And though he has nothing lined up, he won’t agree to another job while he’s still in this one. “I don’t want to work somewhere else for the hell of it. I’m looking forward to deciding what I want to do without the day-to-day pressure of running a big corporate.”

Von Aulock has spent his whole working life in hotels — which have always been his passion — much of that at Tsogo.

“This is a fantastic hotel group … we’ve pushed through so many transactions over the past few years. It’s not a natural thing to walk and say you’re done and are leaving.”

The market, however, is still trying to understand what’s behind the “abrupt break-up” between Von Aulock and the group.

Speculation is that he resigned because of differences over acquisitions with Tsogo’s parent company, Hosken Consolidated Investments (HCI). Rumour is that he wasn’t happy with a deal selling properties to the Hospitality Property Fund, which sounds as if it may have been driven more by the board and HCI CEO Johnny Copelyn than by Von Aulock.

But Von Aulock denies this. “The Hospitality Fund is a great asset for Tsogo and one of the deals I’m most proud of. To reach its full potential it needs scale and Tsogo needs to put additional hotels into the fund to give it critical mass.”

Tsogo had said it may increase its stake to as much as 60% as part of an exchange if it reaches an agreement to sell more hotel assets to the fund.

Judged by what he has done with Tsogo — and compared with the performance of its rival, Sun International — Von Aulock has been an excellent CEO, says Jean Pierre Verster, portfolio manager at Fairtree Capital. He’s had a long tenure and brought exposure to gambling and hospitality alike, which has helped the group through a soft gaming period.

“Tsogo is doing much better than competitors,” says Verster.

The group’s share price is down more than 12% over the past year, but up 35% over the past five years. In comparison, Sun International is down more than 20% over the past year and over the past five years.

Tsogo is Africa’s biggest hotel and gaming group. Its high-profile assets include Gold Reef City and entertainment destination Montecasino, and it has interests in Nigeria, Kenya and Mozambique.

The group is looking to buy more hotel assets in the UK through International Hotel Properties, a European hotel company in which it has a 25% stake.

It’s not all plain sailing though. Apart from the impact of the dire consumer environment, Tsogo’s three Gauteng casinos are expected to report revenue down by R200m in the year to March, following the opening of rival Sun International’s new Time Square casino in Menlyn near Pretoria. And while Cape Town has attracted more overseas visitors than usual, many of whom go on safari experiences, gaming is under pressure.

Von Aulock will be replaced from within the company by MD Jacques Booysen.

Source: Financial Mail – Adele Shevel