Aristocrat Leisure Delivers Strong Half-Year Operating Revenue
Gaming technologies provider, Aristocrat Leisure has released its half-year results for the period ending 31 March 2020. Accounting for the unprecedented series of events that have occurred, the results further reflect the underlying strengths and resilience of the firm’s product-led strategy. The beauty of Aristocrat lies within its ability to generate its revenue both through land and digital channels. Undeniably, results were significantly impacted by the COVID-19 related shut down of land-based consumers. This is evident in the 29 per cent dip in volumes in the six months as venue closures subsequently led to the halting of capital spending by consumers.
Nevertheless, the North America Gaming Operations remained resilient. Specifically, Class III Premium installed base surged close to 10 per cent to 23,728 units backed by Aristocrat’s leading penetration of state-of-the-art hardware configurations. The firm was once again crowned the ‘Best Overall Supplier of Slot Content’ at the Annual EK Gaming Slot awards in March 2020. Moving forward, land-based operations are expected to reconvene on a phased basis. The gradual acceleration of gaming floors will be witnessed alongside the increase in consumer confidence and the easing of travel restrictions in the near future.
On the other hand, digital revenue grew 18.5 per cent to that of US$696 million. From an operational standpoint, the outstanding performance was driven by substantial growth in RAID: Shadow Legend, reaping US$160 million in bookings. Additionally, the solid performance of Cashman Casino was also backed by a 30 per cent increase in average books per daily active user to US$0.50. The firm’s digital segment has proven to be its next rising star.
This is because under the leadership of Digital CEO Mike Lang, a newly formed Digital Leadership Team, reinforces the role it plays in the Aristocrat’s growth. Moving forward, Aristrocrat’s focus will be centred on technological improvements to spur growth across both digital and land-based revenues. Collectively, the group’s revenue came in at $2.25 billion, a 7 per cent increase relative to the prior corresponding period. The figure includes the 6 per cent decline in land-based revenues, which was offset significantly by the 19 per cent growth in digital revenue.
Back in November 2019, the firm recognised a deferred tax asset of approximately $1 billion. Consequently, even though profit for the half-year came in at $1.3 billion, the deferral drove net profit in the six months to $305 million, a 14 per cent decline relative to the prior corresponding period. Nevertheless, Aristocrat believes that the deferral will generate significant cash tax savings over the long term. More broadly speaking, the firm has adopted prudent measures to enhance its liquidity and balance sheet position. These include the suspension of FY2020 interim dividend, the successful securitisation of an incremental US$500 million Term Loan B facility and a $100 million reduction in second half operating expenditure relative to the prior corresponding period.
By Caroline Wong
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