Aristocrat records yearly revenue increase as Playtech bid hangs in balance

| By Nosa Omoigui
Aristocrat Leisure Limited (ASX) recorded revenue of A$4.74bn (£2.54bn/€3.02bn/$3.43bn) for its 2021 fiscal year, representing a 14.4% year-on-year rise.

Digital revenue was the biggest contributor to the total, generating AUD$2.47bn for the financial year running from 1 October 2020 to 30 September 2021. The strong digital showing (a 4.6% increase on the year prior) was aided by the performance of Aristocrat’s mobile games business.

The company operated seven of the top 100 mobile games in the US market, and continued to be a top five mobile games publisher in Western markets.

Revenue from the Americas increased 33.4% to AUD$1.82bn, aided by an increase in the number of gaming machines installed across the region. In Australia and New Zealand revenue was AUD$399.8m – a 42.5% increase which was hindered by pandemic-related venue closures across New South Wales and Victoria during the last quarter.

The region the company refers to as International Class 3, comprising slot machine sales in other markets around the world, reported revenue of AUD$44.9m, a 65.8% decline from 2020. This was largely due to land-based closures and operating restrictions resulting from the novel coronavirus (Covid-19) pandemic slowing sales.

Turning to costs, unallocated expenses for the year were AUD$641.9m, up 13.4% from last year. Design and development expenses were AUD$527.6m, corporate expenses came to AUD$112.0m, while foregin exchange losses amounted to AUD$2.3m.

Normalised profit after tax and before amortisation of acquired intangibles (NPATA) for the period came to AUD$864.7m, which was an increase of 81.4% from last year. Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 43.0% for the year to AUD$1.54bn, with a margin of 32.6%.

“The results and momentum we’ve delivered this year demonstrates the successful execution of our growth strategy,” Aristocrat chief executive and managing director Trevor Croker said.

“We continued to take share and deliver above-category organic growth over the year through sustained investment in outstanding product, people and capability, and further strengthening our business fundamentals.”

Following the year-end Aristocrat agreed terms on the acquisition of Playtech in a £2.7bn deal in October. However, it faces competition to complete the deal, with a counter proposal from Gopher Investments potentially on its way.

Playtech also received a preliminary approach from JKO Play today (18 November), headed by Formula 1 team owner Eddie Jordan and Keith O’Loughlin.

Croker added: “Aristocrat’s recommended offer to acquire Playtech, announced after period end, is another demonstration of our appetite to accelerate the implementation of our strategy through accretive M&A, in particular where it can deliver new capabilities and access to significant growth opportunities.

“We are focused on achieving necessary approvals, and continue to expect the acquisition to complete in the second quarter of calendar year 2022.”

He added that he business was entering its 2022 fiscal year with ”excellent operational momentum, business resilience, and an appetite to continue to invest organically and through M&A to accelerate our growth strategy”.

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