Home Finance Aristocrat lauds strategic investment as revenues rise 13% to AU$6.3bn by 2023

Aristocrat lauds strategic investment as revenues rise 13% to AU$6.3bn by 2023

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Aristocrat Leisure said its ongoing strategic investment and diversification plans helped push revenue up 13.0% to AU$6.30bn (PS3.28bn/EUR3.77bn/US$4.09bn) in its 2023 financial year.

Aristocrat’s reported revenue in 2023 was only one area of growth. Gaming and Technology reported widespread successes, as EBITDA and other measures of profitability rose.

Trevor Croker, the CEO and managing Director of Anaxi, lauded the recent acquisitions when reflecting on the year. This includes Roxor Gaming, acquired in January 2023. It led to the development of Anaxi’s online division.

Aristocrat has also made a deal to acquire NeoGames for $1.20bn, which was signed in May. This purchase should be completed before calendar year 2024’s H1 end.

Croker stated that the results of 2023 clearly showed the impact from strategic acquisitions. Croker said that Aristocrat will continue to look for new business opportunities in the future, and there’s still room for growth.

Croker stated, “I am proud of the quality result we announce today.” Aristocrat’s growth over this period is a testament to its ongoing strength, our competitiveness, and the diversification and resilience of the portfolio. It also reflects the solid fundamentals and the sound fundamentals within the markets where we are active.

We have also been able accelerate our investment to support our growth strategy. Our strategic investments in order to diversify and grow Aristocrat were particularly beneficial.

This was backed by an outstanding gaming performance that more than compensated for an industry-wide moderated demand in mobile games. Diversification and scale are fundamental strengths to our business.

We continued to make investments to expand in verticals and adjacencies that are attractive to us, while building resilience into our portfolio. This includes executing the ‘build-and-buy’ strategy for online RMG.

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Aristocrat’s Pixel United business generated the highest revenue in the year to 30 September.

Pixel United accounted for $2.65bn or 42.1% of the total revenue generated in 2017. It was a 2.3% increase over last year. However, the overall revenue share dropped from 46.5% to 45.5%. Aristocrat explains that this is due to a drop in mobile markets globally and the company’s exit from Russia.

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Aristocrat reported that while Pixel United generated the highest revenue, its other segments had seen greater growth. The gaming revenue, which is derived from customers in North America, increased by 14.0% to $1.85bn.

Aristocrat claims that North American customers investing more money in high-performing products has helped to boost gaming growth. It noted an increased penetration for both the Neptune Single Cabinet and MarsX Portrait cabinet.

Class III revenue from outright purchases and gaming, which is derived through contracts with clients in the Americas and Australia, New Zealand and International segments, increased by 32.0%, to reach $1.80bn.

Aristocrat reported that it benefited from a faster than expected pandemic recovery and better conditions in Europe as well as an increased penetration of products with high performance in North America.

EBITDA growth and NPATA in 2023

Spending costs rose 15.2%, to $3.55 billion. Aristocrat reported increased expenses in design and development as well as selling, administrative, and finance.

The result was a profit before tax of 1,67bn dollars, an increase of 35.8% from the previous year. Business paid income tax of $216.3m but also noted an impact from foreign exchange of $23.1m and another $5.0m due to fair value interest rate hedge.

The net result for the entire year was $1.48bn. Aristocrat reported that this figure was down 4.8% from $1.56bn in the prior year. However, the 2022 numbers included a $592.2m foreign exchange positive impact, which distorted the comparison.

The net profit for the period was $1.54bn, 46.7% more than in previous years. Normalised EBITDA was $2.11bn in the year, an increase of 33.2%.

Croker stated, “We will navigate the challenges ahead with an eye on the performance of our portfolio and seizing the strategic opportunities that are in front of us. This includes achieving the online RMG strategies with the proposed purchase of NeoGames, which is expected to close during the first half calendar year 2024.”

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