GGRAsia – Aristocrat 1H normalised profit up 41pct, flags dividend

Aristocrat 1H normalised profit up 41pct, flags dividend

May 19, 2022 Newsdesk Industry Talk, Latest News, Top of the deck

Slot machine maker and online gaming content provider Aristocrat Leisure Ltd reported interim normalised profit after tax and amortisation that rose 40.9 percent year-on-year, to AUD580.1 million (US$403.9 million), compared to just under AUD412.0 million in the prior-year period.

It declared a dividend of AUD0.26 per ordinary fully-paid share for the six months to March 31, payable on July 1.

Aristocrat also announced in one of its Thursday filings a programme to buy back – on market – up to AUD500-million worth of its shares.

The half-year result was on operating revenue that rose 23.1 percent year-on-year, to AUD2.75 billion. Earnings before interest, taxation, depreciation and amortisation (EBITDA) were up 30.3 percent year-on-year, to AUD970.3 million.

The group said that its business for casino slot machines in its ‘international’ segment – referred to as ‘International Class III’ – “grew post-tax earnings by AUD28.7 million due to new, large openings in the Philippines” gaming market, while other “Asian and European markets continued to emerge slowly post Covid-19 lockdowns”.

The firm quoted its segmental earnings based on reported currency and normalised for significant items. It added that segment profit was stated before amortisation of acquired intangibles.

Segment revenue in International Class III was AUD64.0 million, up 281.0 percent year-on-year. That segment’s profit was AUD29.9 million, compared to an AUD8.7-million loss in the prior-year period.

The international segment was dwarfed by the AUD1.15 billion revenue produced by the Americas casino market for the period, a year-on-year gain of 41.5 percent. Segment profit for the Americas was AUD663.6 million, up 61.2 percent year-on-year.

The group’s online social games segment – Pixel United – generated AUD1.31 billion in interim revenue, up 10.0 percent year-on-year. Profit from the segment was up 6.6 percent, at AUD428.3 million.

The firm said in commentary that the Pixel United interim results included “management and recognition of additional costs to protect our people and business in the context of the conflict in Ukraine.”

In February, Aristocrat had said it had restructured its business into three parts: real-money online gaming, the casino equipment business, known as Aristocrat Gaming, and Pixel United, formerly known as Aristocrat Digital, which is the umbrella for the group’s social gaming brands – Product Madness, Plarium, and Big Fish Games.

The firm said in its interim results: “Aristocrat is accelerating implementation of our ‘build and buy’ strategy to scale in online real money gaming (RMG).”

It added: “Online RMG is a logical growth and diversification opportunity that is highly complementary to both the Aristocrat Gaming and Pixel United businesses.”

Trevor Croker, group chief executive and managing director, said in prepared remarks in a press release on Thursday: “We anticipate being live with iGaming products in two jurisdictions in the U.S. by the end of calendar year 2022.”

The firm’s closing net debt for the reporting period was AUD523.5 million, versus a net cash position of AUD1.33 billion in the first half, 2021.

“Aristocrat enters the second half with excellent fundamentals and strong operational momentum, a robust balance sheet and an abundance of opportunity to accelerate our growth strategy,” the group CEO was quoted as saying.