GGRAsia – Aristocrat profit up 41pct, US$1bln bid for social casino

Aristocrat profit up 41pct, US$1bln bid for social casino

Nov 30, 2017 Newsdesk Latest News, Top of the deck, World

Australia-based slot machine maker Aristocrat Leisure Ltd on Thursday reported net profit after tax for the fiscal year ending September 30 as up 41.3 percent year-on-year, on revenue up a more modest 15.3 percent.

Such profit was AUD495.1 million (US$375.5 million), compared to AUD350.5 million in the prior-year period. In that previous financial year, group net profit after tax had soared by 88 percent.

The firm also announced on Thursday a US$990-million cash acquisition of social casino brand Big Fish Games Inc, a U.S.-based, wholly-owned unit of horse racetrack operator Churchill Downs Inc.

Aristocrat said the deal would make its digital business the “second-largest social casino publisher globally by revenue”, citing research from Eilers and Krejcik Gaming LLC.

For the latest 12-month reporting period, the Aristocrat board authorised a final dividend of AUD0.20 per share – in aggregate AUD127.7 million – franked at 100 percent.

The company said total dividends for financial year 2017 of AUD0.34 per share represented a 36.0-percent – or AUD0.09 per share – increase on the prior corresponding period. The final dividend is likely to be declared and paid on December 20.

“The group’s ability to frank dividends will be considered going forward, depending on its franking balance and forecast position,” said the firm in one of several Thursday filings to the Australian Securities Exchange.

Revenue for fiscal 2017 was up 15.3 percent, at AUD2.45 billion, compared to nearly AUD2.13 billion a year earlier.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the latest 12-month period amounted to AUD1.00 billion, compared to AUD806 million a year earlier. EBITDA margin improved by 2.9 percentage points, to 40.8 percent.

The group’s net debt to EBITDA ratio improved by 50 percent year-on-year, to 0.6 times.The company’s net debt in cash terms narrowed by 35.1 percent, to AUD652.3 million.

Trevor Croker, Aristocrat’s chief executive, said in a prepared statement the firm had achieved “high quality” results “against a backdrop of mostly flat markets and increasing competitive pressure”.

The CEO added that 52 percent of group revenues came from recurring sources during the reporting period, noting also that there had been growth in outright sales.

Donald Carducci, an analyst at JP Morgan Securities Australia Ltd said in a Thursday note: “Aristocrat Leisure has strong recurring revenues, and has been consistently gaining market share in North American gaming operations, growing well in a flat market.”

He added the gaming supplier had been “focusing on diversifying sources and geographies of revenue,” and that the Big Fish acquisition was “expected to be basic adjusted earnings per ordinary share-accretive from the first year of ownership,” with the transaction due to be completed in the first quarter of calendar year 2018.

Aristocrat gave on Thursday a brief forecast for fiscal 2018, saying it anticipated continued business growth, but noted – referring to commercial casino gaming equipment in international markets including Asia Pacific – there was likely to be “moderating performance in the International Class III segment driven by a reduction in new casino openings in financial year 2018.” The firm however added it would be “maintaining [its] leading ship share positions”.