Majestic Half Year Helps Aristocrat Buck the Trend

Shares in Aristocrat Leisure (ALL) managed to ride out Thursday’s stockmarket battering after the gaming machine company revealed a solid rise in revenues, earnings and dividend for the six months to March.

The shares rose 6.7% to $33.73 as the wider market sold off in reaction to Wall Street’s Wednesday tumble.

The local market was off 1.65%, so the performance by Aristocrat shares was solid, as were the interim figures

Helping buoy the share price was news of a share buyback of half a billion which return some of the $1.3 billion raised late in 2021 to help finance the $5 billion Playtech bid which failed in February of this year.

Interim dividend was boosted to 26 cents a share from 15 cents an increase of 73% which was clearly made possible by that failed Playtech deal.

Had it been successful, shareholders would have faced no appreciable capital management returns for a while until Aristocrat merged and then reshaped the combined company with all the attendant costs.

Revenue for the half was up 23.1% for the half to more than $2.7 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 30% to $970 million on a reported basis and was up 27% higher on a constant currency basis from the March, 2021 half year.

The company said what it called ‘normalised profit after tax and before amortisation of acquired intangibles (NPATA)’ was up 41% at $580 million in reported terms and 37% in constant currency terms.

“The Group continued to invest strongly in people, product and innovation which delivered further profitable organic growth across Aristocrat Gaming and Pixel United portfolios, with above- industry performance in key segments and genres driving additional share growth despite mixed market conditions,’ directors said.

Aristocrat CEO Trevor Croker, said in the earnings release, “Aristocrat delivered an impressive and resilient performance despite mixed operational conditions and challenges. We took comprehensive action to protect our people and business, while investing strongly to accelerate our growth strategy going forward.

“Our sustained investment in talent, technology and product enables us to continue to take share wherever we play and delivered significant top and bottom-line growth in the first half of fiscal 2022.

“We are accelerating the implementation of our ‘build and buy’ strategy to scale in online Real Money Gaming, which provides further channels for us to distribute our world-leading content. Our ambition is to be the leading gaming platform in the global online RMG industry, and we anticipate being live with i-Gaming products in two jurisdictions in the US by the end of calendar year 2022.

“We continue to make progress in our sustainability efforts, including our commitment to responsible gameplay, and to adopting a Group-wide science-based emissions reduction target by the end of calendar year 2023.

“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,” Mr Croker concluded.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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