Aristocrat Provides to Market its Full Year Financial Results
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Aristocrat Releases Financial Results for the Year

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  • Normalised results are broadly down
  • Total dividends for the year declined 82.1 per cent
  • A stable balance sheet and ample liquidity allow for the group to take advantage of market conditions

Aristocrat Leisure Limited (ASX:ALL) provides its financial results for the year ended the 30 September 2020. Generally speaking, the company’s financial results for the period are significantly lower than the prior corresponding period, which is, in turn, a reflection of complications due to Covid-19. Notably, the business’ normalized results are all down, while Aristocrat’s balance sheet remains rather robust as well.

Breaking down the group’s performance, notable figures include a 5.9 per cent decline in operating revenue, to A$4.139 billion. This decline is attributable to the Covid-19 closures, which facilitated a 32 per cent decrease in gaming revenue. In addition to this, the company outlines a decline in earnings before interest, tax, depreciation and amortisation (EBITDA) of 31.8 per cent, to A$1.089 billion. Moreover, net profit after tax dropped 52.6 per cent to A$357.1 million, reflecting the heightened costs and impacts of the Covid-19 pandemic on the group’s operations. In turn, this has facilitated a large decline in earnings per share of 52.5 per cent, from 118 cents to 56 cents. As such, Aristocrat has cut its total dividend paid per share from 56 cents to 10 cents. This represents a decline of 82.1 per cent, further reinforcing the weakened position of the company.

Interestingly, taking into account the recognition of a $1.1 billion deferred tax asset, the company’s profit after tax rose 97.2 per cent to A$1.377 billion, with net profit after tax and amortisation growing from A$840.4 million to $1.497 billion, an increase of 78.2 per cent. Providing further positive sentiment, Aristocrat’s closing net debt/cash position is A$1.567 billion. This represents a decrease of 29.5 per cent. As it relates to this aspect of the company’s financial results, Aristocrat outlines a liquidity optimisation strategy, providing the group with nearly A$2 billion in liquidity at the end of the period.

Despite the material impacts of Covid-19 on the company’s operations, the stable balance sheet positions Aristocrat to perform well in improving economic conditions. This view is reinforced by company CEO and Managing Director, Trevor Croker, emphasising the robust nature of the business, as well as its successful performance throughout the Covid-19 pandemic. The CEO further highlights Aristocrat’s steady balance sheet, with robust liquidity and cash flows, allowing for total optionality to take advantage of underlying market conditions. Again, despite the impact on the company’s financials, the stable balance sheet, as well as an ever improving global economic environment, investors may see the company continuing to perform well through the new financial year.

Caroline Wong

Caroline Wong is a Research Analyst at KOSEC – Kodari Securities. She writes on markets and focuses on ASX Top 300 companies. Email Caroline at c.wong@kosec.com.au.

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