Leading gaming company Aristocrat (ASX: ALL) reports impressive financial results with double-digit revenue growth and soaring profits. Revenue from ordinary activities surged by 12.2% to reach $3,080.4 million, while profit before tax soared by 42.6% to $852.8 million. After-tax profit also saw a remarkable increase of 27.3% to $653 million, highlighting the Company’s strong performance across key markets.
Despite supply chain disruptions and mixed operating conditions in key markets, Aristocrat achieved outstanding performance in North American Gaming Operations and global Outright Sales. Pixel United, the Company’s subsidiary, saw a 16.4% decline in EBITDA amid a softer mobile gaming environment due to the Russia-Ukraine conflict.
Aristocrat Gaming remained the leading supplier in the US market, achieving portfolio performance of 1.4 times the floor average. Its games featured prominently in industry rankings, with inclusion in the top 25 premium leased games, Class II Mechanical Reel games, and Class II Video Reel games.
In Australia and New Zealand, Aristocrat faced a challenging operating environment characterized by regulatory uncertainty and increased competition. Its profit fell by 15.6%.
The Company continued its expansion into strategic adjacencies, including the Video Lottery Terminal (VLT) segments in Canada, Oregon, Illinois, and New York, as well as the Central Determinant System (CDS) segment in Washington and Historical Horse Racing (HHR) markets in Kentucky, Louisiana, and New Hampshire. It also looked to enter low-cost regions, like Spain and Poland.
Aristocrat’s capital expenditure of $173.1 million supported further investment in Gaming Operations to fuel future growth. Despite a slight increase in gearing, the Company’s net debt to EBITDA ratio remained strong at (0.2)x at the end of the period.
The Company has allocated $372 million to market-leading design and development (D&D) activities, further strengthening and expanding its product portfolios. Additionally, $42 million was invested in Anaxi, supporting Aristocrat’s entry into online Real Money Gaming (RMG) as part of its growth strategy. The Company also invested $240 million in User Acquisition (UA) to enhance mobile portfolio performance and position itself for future growth.
Furthermore, Aristocrat demonstrated its commitment to shareholders by returning $166 million in surplus cash through share buy-backs over the six-month period. This marked progress towards the completion of the Company’s up to $1.0 billion on-market share buy-back program.
The entry into online Real Money Gaming (RMG) through the Anaxi acquisition aligns with the Company’s strategy to expand into adjacent markets. Additionally, the investment in User Acquisition (UA) reflects Aristocrat’s commitment to optimizing its mobile portfolio performance and positioning itself for future growth.
Looking ahead, it aims to drive further share growth in key markets and genres. As the sector continues to evolve, Aristocrat’s performance serves as a powerful testament to the resilience and profitability of the Australian gambling industry, attracting increased investment and fostering a climate of innovation and competition.
Alinda is a Business Reporter for The Sentiment
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