Has Aristocrat Leisure finally seen off the spate of poor news that has damaged its reputation with investors over the past couple of years?
Yesterday’s surprise trading update for 2009 indeed holds out that hope.
The shares jumped more than 13% in an early reaction to a forecast for a higher than expected trading profit for 2009.
The shares ended up 44c, or 11%, at $4.51.
Aristocrat said it now expects its operating profit to be around $116 million for the year ended last December.
However, the company said it will book abnormal provisions totalling $187.3 million, leading to a full-year loss, because of the settlement of a class action with investors in a US bond issue.
Aristocrat said in its statement that it "confirms that it expects to exceed market consensus estimates for operating profit before non-recurring items for the year ended 31 December 2009.
"The Company’s operating profit (pre abnormal items) after tax and minority interest is expected to be approximately $116 million for the year ended 31 December 2009.
"The Company also confirms it will recognise an abnormal provision of $187.3 million (after tax) in its 2009 financial accounts relating to the expected damages liability associated with the U.S. Convertible Bonds matter. This figure includes interest calculated to 30 April 2010.
"The decision to recognise an abnormal provision does not in any way pre suppose the US District Court’s final pending judgment on damages or any Company decision to appeal some or all aspects of the case.
"The Company and the Bondholders have made final submissions to the District Court and now await the Court’s final judgment in the case.
"Total abnormals for the year will include the impairment of multi-terminal gaming businesses, intellectual property litigation settlement, property sales and restructuring costs.
"The Company therefore will report a loss (post abnormal items) after tax and minority interest for the year ended 31 December 2009.
"These results remain subject to completion of year end procedures including the completion of the audit and Board approval, and therefore may change before finalisation," the company concluded.
Aristocrat will release its final results for the full year ended 2009 on February 23.
And it was also good news from Ramsay Health Care yesterday which revealed a sharp upgrade in interim earnings.
The company’s shares jumped more than 7% at one stage after the upgrade.
They closed at $11.90, up 3.7%, or 43c.
The company said "first half core NPAT result for the 6 months ended 31 December 2009 is likely to be 32-34% higher than the corresponding period in the previous year.
"This is subject to finalisation of the half year accounts as well as external audit review."
Directors said the strong growth in core after tax profits "is a result of better than expected performance in the UK and Australian businesses.
"Ramsay’s UK operations have benefited from internal cost restructuring in the second half of the 2009 fiscal year, as well as the realisation of cost efficiencies in the first half of the 2010 fiscal year.
"In addition, the Australian operating performance has been slightly ahead of expectations and overall interest costs have been lower than expected as a result of proactive interest rate management.
"As a result, the core NPAT growth of the Group for the full 2010 fiscal year is, barring unforeseen circumstances, expected to be in the range of 18-20%, which compares to earlier core NPAT guidance of 12-14% growth over the prior year.
"This upgraded core NPAT guidance of 18-20% growth would translate into core EPS growth of 10-12% for fiscal 2010.
"Further commentary on Ramsay’s performance in the first half of the fiscal year and the outlook for the business will be provided at the half yearly results announcement on 25 February 2010."
And education provider Navitas says it lifted profit by 45% in the first half of fiscal 2010 on higher student enrollments.
Net profit for the six months to December 31 grew to $27.5 million from $19 million in the previous corresponding period.
Total revenue rose 24% to $270.2 million.
Navitas chief executive officer, Rod Jones, said in the statement that the result had been driven largely by student and partner recognition of the company’s academic outcomes.
"Ultimately, our revenues and earnings are driven by student enrollments across our operating divisions," Mr Jones said in a statement.
"Providing high quality educational services in a supportive learning environment has established our reputation for excellence and generated growth in those enrollments.
"In turn, we are delivering value to our students, our university and program partners and our shareholders alike."
Navitas now expects annual earnings before interest, taxes, depreciation and amortisation (EBITDA) of between $94 million and $97 million.
Half year EBITDA was up 43% at $43.4 million.
Navitas said its annual EBITDA forecast was dependent particularly on the success of the University Programs (UP) divisions enrollments for the March 2010 Semester and the level of start up costs for investment in new colleges.
