Aristocrat Leisure (ALL) | SNAPSHOT
Profile: Aristocrat Leisure (ALL) develops, manufactures and distributes gaming platforms and products. This includes ‘pokie’ or ‘slot’ machines sold in North & South America, ANZ and internationally. Its products include Lightning Link and Dragon Link. It also produces online/digital games, such as RAID: Shadow Legends, through its Plarium, Big Fish Games and Product Madness businesses.
History: ALL was established in 1953. In the 1960s, ALL began expanding into overseas markets. In 1996, ALL listed on the ASX. In 2013, ALL acquired Product Madness, a mobile, app and online gaming company. In 2014, ALL acquired Video Gaming Technologies and in 2017, ALL acquired Plarium Global, a free-to-play mobile, social and web-based game developer. In 2018, ALL acquired Big Fish, a global publisher of free-to-play mobile and desktop games.
Earnings composition: The America land-based gaming division contributed $1.9bn (44%) of FY19 revenue. The Digital division generated $1.8bn (41%) of revenue in FY19. Australia and New Zealand generated $456m (10%) of FY19 revenues and International reported $205m (5%).
Most recent result – FY19: Normalised profit after tax and before amortisation of acquired intangibles (NPATA) increased 23% on the prior corresponding period (pcp) to $894m (up 14% on constant currency). Americas revenue increased 14% on a constant currency basis to US$1.36bn, as platform sales increased 30% to 17.3k units. In American Gaming Operations, where ALL receives a portion of gambling revenue, the total number of participation units (machines) increased 8.7% to 48.2k. Digital revenue increased 24% to US$1.25bn. ANZ revenue was in line with FY18 at A$455m – where price increases offset volume declines. A 34-cent dividend was declared, bringing total dividends for the year to 56c, up from 46c in FY18.
Company guidance: ALL expects growth in Digital bookings, aided by recently released new games. User acquisition spend in Digital is expected to remain 25-28% of Digital revenues. Design and development expense is expected to remain in line with prior years as a percentage of revenue. A moderate increase in SG&A is expected. ALL announced a change to its tax structure, which is expected to reduce tax expense in the US, and guided to FY20 effective tax rate of 23.5-24.5%.
Important dates: AGM is scheduled for 20 February 2020. 1H20 results are scheduled for 21 May 2020.
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