Shares in poker machine giant Aristocrat Leisure dipped 3% yesterday as the company confirmed guidance in late October for a record full year result.
The shares dropped 3.6% to $45.64 despite the company confirming that underlying net profit jumped more than 80% to $865 million for the year to September 30.
Perhaps investors failed to look past the headline result of a 40% drop in net profit after tax to $820 million from 2019-20 when it was bolstered by a $1 billion tax benefit (one of the reasons why statutory earnings figures can be so misleading).
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) rose 43% to $1.542.9 billion from 2019-20.
The rise in the underlying profit for the year means Aristocrat is back close to pre-pandemic levels as casinos and other customers resumed buying its gaming machines.
Revenue jumped 14.4% to $4.7 billion (an increase of 25% in constant currency terms), with a handy 27.5% boost in its pokies business and a 15% jump in its mobile video game division which is where much of the growth has come in recent years.
The solid rebound in revenue and earnings saw the board confirm a final dividend of 26 cents a share, taking the full year payout to 41 cents, substantially higher than the pandemic restricted 10 cents a share payment a year ago.
“The results and momentum we’ve delivered this year demonstrates the successful execution of our growth strategy,” Aristocrat CEO Trevor Croker said in the statement to the ASX.
Aristocrat last month announced it would buy the UK-based online casino group Playtech for $5 billion, and launched a $1.3 billion equity raising to fund the deal.
Mr Croker said the deal was “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”.
There has been talk that Playtech’s second biggest investor, Gopher Investments was launching a counter bid, but nothing has been heard on that score for several weeks, although it has asked Playtech for due diligence.
A second company called JKO Play Limited, which is backed by former Formula One team owner Irishman, Eddie Jordan, is also reportedly seeking due diligence information to develop a takeover offer.
