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Aristocrat Leisure Limitedâs (ASX:ALL) CEO, Mr. Trevor Croker shared the companyâs performance and trading outlook at Annual General Meeting 2019. In FY 2018, the companyâs profit increased by 34% to $729.6 Mn as compared to the last year. In a 34% profit growth rate, 17% was delivered by the performance of existing businesses, 12% came from digital acquisitions and the remaining 5% driven by their lower effective tax rate. At the same time, revenue increased by 48% in reported terms, to an all-time high of over $3.6 Bn.
Aristocratâs growth momentum, generation of strong free cash flows and capacity to continue to reduce gearing levels has allowed the Board to deliver a 35% increase in dividends to 46 cents per share in 2018, consistent with their commitment to increase dividends progressively over time.
The companyâs great games, differentiated hardware, and enhanced customer services helped it to maintain their market share, and thus enabling it to record profit in Australia, and New Zealand (ANZ). The North America EBITA growth was driven by another outstanding performance in gaming operations, with units increasing by 15% to over 44,000 units along with a modest expansion in their market-leading average fee per day.
The company achieved around 25% growth in their Class III North American premium gaming operations footprint, to over 20,000 units, while also growing their Class II footprint over 8%. This was supported by a 2.2% improvement in overall average fee per day. This progress was fuelled by penetration of leading hardware configurations including the ARC Double, Helix, and RELM XL cabinets, together with top performing exclusive titles such as Lightning Link, Dragon Link, Buffalo Grand, and 5 Dragons Grand. Growth in Class II gaming operations was driven by the ongoing success of the Ovation video product and penetration into new gaming jurisdictions outside of Oklahoma.
With their two acquisitions, Big Fish Gaming and Plarium combined, their digital businesses accounted for almost a third of Group segment profit over the period.
On the trading outlook, Mr. Croker said that they are committed towards continuous investment in innovation and leverage their growing scale and capability to lift efficiency and create capacity for sustainable growth in the financial year 2019. Their land-based outright sales are expected to show incremental gains in attractive North American adjacencies, in addition to maintaining market-leading share positions across key for sale segments globally including in APAC region with no significant casino expansions planned in FY2019. Their land-based gaming operations are expected to expand across its total gaming operations installed base, leveraging their broadening portfolio, while maintaining market-leading average fee per day performance. Their digital segment is expected to show further growth in the number of bookings supported by new game releases. The companyâs UA spend expected to remain between 25% and 28% of overall digital revenues, with the higher relative spend reflective of an increased number of games releases planned for Financial Year 2019.
The company anticipates lifting D&D investment across Land-based and Digital, in absolute dollar terms, while remaining broadly in line with the financial year 2018 as a percentage of sales.   The company anticipate moderate growth in corporate costs for their larger, complex and diverse businesses. It also expects tax reduction by 100 bps to 150 bps in the Groupâs effective tax rate as compared to the financial year 2018.
In seasonality, the company expect second half earnings of FY2019 to be skewed, reflecting the timing of an increased pipeline of digital game releases across a broad range of genres and corresponding UA investment.
In another update, Mr. SW Morro and Mrs. AM Tansey were re-elected as a Directors of Aristocrat on per the company poll results. Additionally, 116,390 Performance Share Rights were granted to Mr. Trevor Croker, the Chief Executive Officer, and Managing Director.
On stock information, Aristocrat Leisure Ltd. last traded at $25.590 up 3.856% as on February 21, 2019 with the market capitalization of ~$15.73 Bn. Its current PE multiple is at 28.99x. Its 52 weeks high has been noted at $33.06, and 52 weeks low at $20.66. Its absolute return for the last 3 months, 1 year, and 5 years are -2.92%, 1.69%, and 401.83% respectively.
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