Aristocrat Leisure (ASX:ALL) share price in focus after FY 2020 results

The Aristocrat Leisure Limited (ASX:ALL) share price will be in focus today after the release of its full year results for FY 2020…
The post Aristocrat Leisure (ASX:ALL) share price in focus after FY 2020 results appeared first on Motley Fool Australia. –

Disappointing results

The Aristocrat Leisure Limited (ASX: ALL) share price will be on watch on Wednesday after the release of its full year results for FY 2020.

How did Aristocrat Leisure perform in FY 2020?

As was widely expected, the COVID-19 pandemic weighed heavily on the gaming technology company’s performance and led to declines in both sales and profits.

For the 12 months ended 30 September, Aristocrat reported a 5.9% decline in operating revenue to $4,139.1 million and a 31.8% reduction in earnings before interest, tax, depreciation and amortisation (EBITDA) to $1,089.4 million.

This reflects a 32% decrease in Aristocrat Gaming (Land-based) revenue, driven by the impact of COVID-19 customer venue closures and social distancing restrictions, which was almost offset by 29% growth in Aristocrat Digital revenue.

On the bottom line, the company posted a 78.2% increase in reported net profit after tax before amortisation (NPATA) to $1,497.2 million. However, this was due to the recognition of a $1.1 billion deferred tax asset following company structure changes.

On a normalised basis, NPATA fell a sizeable 46.7% to $476.6 million. However, this was a touch ahead of expectations, with analysts at Goldman Sachs forecasting NPATA of $471 million.

Due to the Aristocrat board’s confidence in its strengthening performance, it has declared a final fully franked dividend of 10 cents per share.

Segment performance.

The Aristocrat Gaming segment may have posted a sharp decline in revenue, but it has continued to perform strongly in respect to its installed base and average fees.

The company’s Class III premium and Class II installed bases grew 5.9% and 0.3% respectively, thanks to continued penetration of leading hardware configurations and high-performing game titles.

Its market-leading average adjusted fee per day increased 1.1% to US$51 (normalised to exclude the number of days machines were not operating due to COVID-19 impacts).

The company’s Aristocrat Digital segment delivered double-digit growth in bookings, revenue, and profit during FY 2020. It notes that its RAID: Shadow Legends game continued its impressive growth trajectory, generating US$368 million in bookings.

Its aggressive investment in User Acquisition (UA) was maintained to support growth, with total UA spend increasing 1.7 percentage points to 28% of Digital revenue.

The Average Bookings Per Daily Active User (ABPDAU) grew almost 44% to US$0.59. This was due to the successful focus on DAU quality, the scaling of RAID: Shadow Legends, and strong performance across the Social Casino portfolio, supported by COVID-19 related tailwinds.

FY 2021 outlook.

No guidance has been provided for FY 2021.

However, management advised that it expects to maintain or enhance its market-leading positions in Gaming Operations, measured by the number of machines that are operating and game performance.

It also expects further growth in Digital bookings, with its UA spend expected to remain between 25% and 28% of overall Digital revenues.

An increase in selling, general and administrative expense is expected across the business. This is due to the company continuing to scale and deliver its growth strategy. This includes continuing to identify adjacencies that expand its capabilities to create new business and growth through product, distribution, and investment.

Aristocrat’s Chief Executive Officer and Managing Director, Trevor Croker, commented: “A strong balance sheet, ample liquidity and robust cash flows provide us with full optionality to continue to invest behind our refined growth strategy and take advantage of acceleration opportunities in the period ahead.”

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Aristocrat Leisure (ASX:ALL) share price in focus after FY 2020 results appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!