GGRAsia – Aristocrat 1H profit up on tax benefit, revenue grows

Aristocrat 1H profit up on tax benefit, revenue grows

May 21, 2020 Newsdesk Latest News, Top of the deck, World

Casino slot machine maker and digital casino games provider Aristocrat Leisure Ltd said its half-year profit rose due to the recognition of a deferred tax asset. In a Thursday statement, the company confirmed the suspension of its dividend amid the Covid-19 pandemic.

The firm reported a statutory half-year profit after tax of nearly AUD1.31 billion (US$856.6 million), up 277.2 percent from the prior-year period. It said such profit was boosted by an income tax benefit of AUD925.2 million.

Aristocrat said that group-wide on a normalised basis – taking account of profit before amortisation of acquired intangibles – its profit after tax was AUD305.9 million, down 14.2 percent from a year earlier.

Group revenue in the six months to March 31 increased 7 percent year-on-year to AUD2.25 billion. Revenue in the land-based segment fell by 6 percent in year-on-year terms.

“Declines across all land‐based businesses in the period,” were “driven mainly by Covid‐19 with customer venue closures globally, leading to halting of capital spend by customers and limited gaming operations revenue during the month of March 2020,” stated the group in commentary on its half-year results.

Decline in land-based business had been offset by a 19-percent increase in revenue in the digital division. The digital business “delivered double-digit growth in bookings, revenue and profit over the period, compared to the prior corresponding period,” said Aristocrat.

Group earnings before interest, taxation, depreciation and amortisation (EBITDA) were 7.7-percent lower than the prior corresponding period, at AUD707.6 million. The company said its EBITDA margin “remains strong” at 31.4 percent, despite decreasing against the prior corresponding period “due to the lower share of land‐based revenue as a result of Covid‐19 impacts” and further investment.

Aristocrat has recently strengthened its liquidity with a new US$500-million term-loan B facility, that will mature in October 2024. Following settlement of the exercise, the group’s total term-loan debt will amount to US$2.35 billion.

Aristocrat chief executive and managing director, Trevor Croker, was quoted in Thursday’s release as saying: “Aristocrat delivered a result for the half year to 31 March 2020 that demonstrates our core strengths and the relevance of our product-led strategy, despite the unprecedented challenges generated by the Covid-19 pandemic.”

He added: “Our strong balance sheet, ample liquidity and excellent financial fundamentals position us to emerge from this period strongly, while allowing us full optionality to continue to invest for long-term growth.”

In late April, the gaming supplier said it would be standing down about 1,000 staff and cutting down jobs, as part of efforts to “mitigate the impacts” of the coronavirus pandemic on the group’s business.