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Aristocrat announces an “outstanding” first half amid record revenue and earnings

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Aristocrat Leisure’s CEO and managing Director Trevor Croker has praised the performance of the Group during the first six months of the 2024 Financial Year, noting that the Gaming Segment was a major driver for revenue growth and profit increases.

For the six months to 31 March, revenue at Aristocrat hit AU$3.27bn (PS1.72bn/EUR2.01bn/US$2.19bn). The revenue is up 6.1% compared to H1 of last year. This growth comes from all segments.

Aristocrat has announced that it is changing the way in which financial data will be reported. This announcement was made before the release of the results. The acquisition of NeoGames was completed at the end of April. The Anaxi division and NeoGames are managed under the name ‘Aristocrat Interactive. Moti malul, former NeoGames’ CEO, is now the CEO of this entity.

Aristocrat now reports results in H1 for its three main segments, Aristocrat Gaming (Aristocrat Gaming), Pixel United (Aristocrat Interactive) and Aristocrat Interactive. Aristocrat says that this better aligns with its growth strategy, management structure, and strategic goals.

Aristocrat can rejoice that all of its segments have seen growth year on year in the first half. In Q1, gaming accounted for $1.83bn of Aristocrat’s revenue. Pixel United was at $1.33bn, and Interactive brought in $109.4m.

This led not only to a rise in revenue but also EBITDA, net profit and EBITDA. Croker praised the increase, calling it “outstanding”.

He said, “This is yet another outstanding result that reflects Aristocrat’s ability to adapt and grow market share while driving profitability in different operating environments.”

We delivered strong EBITDA and revenue growth in the first half. The record performance of Aristocrat Gaming, led by a North America gaming operation result that was exceptional, and the strong growth at Aristocrat Interactive were key to this. Pixel United also achieved better profitability in spite of mixed market conditions.”

Aristocrat’s growth is driven by gaming

Aristocrat starts its segment-by-segment analysis of the results by celebrating the Gaming division. The segment’s revenue increased by 8.3% on an annual basis to $1.83bn. This was a record-breaking quarter.

Aristocrat attributes this to the strong performance of its gaming operations in North America, which the company says is a reflection of an expanding installed base. The overall sales figures in North America were higher than in other regions, despite the 9.0% decline in regional unit sales.

Pixel United’s revenue increased by 0.9%, to $1.33bn despite bookings falling. Aristocrat’s social casino franchises in this segment performed better than the market. Aristocrat’s overall Margin also increased, reaching 35.0%. This is due to a greater focus on optimisation of user acquisition and efficiency in operations.

The new Interactive segment also saw a 52.2% increase in revenue to $109.4m. Aristocrat claimed that this growth was due to the continued scaling of its igaming business in North America, Europe and Canada. Aristocrat’s igaming strategy includes launches in North America, Canada, and the UK with major operators, as well as its growing games portfolio, and the impact of Roxor’s acquisition.

Profits continue to rise despite higher costs in H1

The cost of revenue, however, was slightly less than the previous year at $1.37bn. Aristocrat did, however, note an increase across the board in several operating cost areas.

Design and Development costs were $424.9m higher than the average operating cost of $527.6m. Finance costs were higher as well, at $79.2m.

The impact of the revenue increase was such that before-tax profits increased by 12.8%, to $961.7m. Net profit after tax was $711.3m. This is an 8.9% increase.

Aristocrat noted that other factors also impacted the bottom line in H1. Aristocrat also noted other factors that impacted the bottom line for H1. These included an $83.8m impact on foreign exchange rates and a loss of $13.4m in fair value interest rate hedge. Aristocrat’s H1 net profit was $614.1m. This is up 39.0% on the previous year.

EBITDA also grew 12.2%, to $1.20bn.

Croker stated that the results “reinforce resilience and scale, which are fundamental strengths for our company. This is supported by a focus on operating efficiency and maximizing operational leverage.”

The company will focus its efforts on portfolio performance, capturing strategic opportunities, including the integration of NeoGames, and positioning Aristocrat Interactive in order to reach full potential during this new chapter in Aristocrat’s growth.

Aristocrat to undergo strategic review

Aristocrat used its H1 results to announce details about a upcoming strategic review. The review will be focused on the casual and core gaming assets of Aristocrat: Big Fish Games, Plarium Global and other.

It said that with its expanded Interactive division now sitting next to Gaming, the group has “clear” opportunities to leverage their strengths in gaming content. Aristocrat’s gaming content, enhanced technology and social Casino are spread across multiple verticals.

In this context, the group will conduct a review of its casual and core gaming assets. Aristocrat has stressed that no decision had been taken and it will evaluate all options in order to maximize shareholder value and continue the success of this business. Aristocrat is expected to provide additional details on this review at the appropriate time.

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