Poker machine maker Aristocrat Leisure (ALL) sees continued strong annual profit growth after lifting its first half earnings 9% and revealing a 14% rise in interim dividend to 8c a share.
It was a result the market liked yesterday, with the shares up more than 3% to $5.34.
Aristocrat said net profit rose to $57.4 million in the six months to March 31, thanks to a higher market share in the United States, which offset weakness at home in Australia.
"Increased profitability in North America was driven by outstanding share growth in our gaming operations footprint and average fee per day, together with a higher average selling price and share growth in the outright sales segment," chief executive Jamie Odell said in a statement yesterday.
While profit in Australia was down, he said the company’s market share had improved (which doesn’t mean much – a higher share of a less profitable market is a weak outcome).
Aristocrat said it expects strong profit growth for the full year.
Directors said the result "was driven by improving operational delivery, particularly share growth in the critical US gaming operations segment, as well as foreign exchange and tax benefits.
"Share growth across the US and Australian outright sales markets, the maintenance of Aristocrat’s leading position in Asia Pacific and a five-fold growth in revenues in Aristocrat’s online business also contributed to the result.”
ALL 1Y – Aristocrat lifts first-half earnings by 9pc
The 8c a share is equal to a high, representing 77% of ‘normalised’ earnings and an indication of how much the company wants to keep shareholders happy. Revenue rose 7.6% to just over $412 million.
While cash flow improved, debt jumped more than 26% to nearly $234 million, a big increase and something to watch over the rest of the year.
"Over the six months to 31 March 2014, Aristocrat made demonstrable progress in its product-led, share-taking strategy," director said.
"Across key markets, the Group closed portfolio gaps, better targeted game development and technology resources at key segments and improved front-end sales execution.
"Aristocrat’s gaming operations footprint increased 18.6%, with a 6.1% increase in average fee per day compared to the prior corresponding period. Share gains were also achieved in outright sale segments in both the US and Australia, with performance in the major markets of New South Wales and Queensland a particular highlight.”
