Aristocrat Leisure books higher profit and revenue on growth in US market

One of the world’s biggest pokie machine businesses will ramp up its spending in design and development as it looks to move games online and increase its presence in North America.

Gaming giant Aristocrat Leisure will ramp up its spending in design and development while eyeing further opportunities in the US after double-digit growth in both revenue and profit in the past ­financial year.

The Sydney-based group will tip 12-13 per cent of revenue generated over the 2024 fiscal year into D&D – more than the 11-12 per cent in the prior 12 months – with a focus on technology as it looks to move games online and drive growth in emerging markets.

Aristocrat delivered a better than expected annual profit of $1.33bn for the 12 months to September 30, a 21 per cent increase, or 13 per cent in constant currency terms. Revenue increased 13 per cent to $6.3bn, with underlying earnings rising to $2.1bn, from $1.85bn a year ago.

Growth in Aristocrat Gaming was driven by a “high-performing” portfolio and execution in North America, which also saw unit sales and average selling price per unit increasing 25.5 per cent and 14.1 per cent respectively over the year.

Aristocrat recently launched a new NFL slot machine game in US casinos to coincide with the current season that has proved popular with younger, male audiences.

Chief executive Trevor Croker said Aristocrat would look to take advantage of new opportunities that emerged now that it had access to 80 per cent of the North American market.

“There are still markets in North America that we don’t participate in and will enter over time,” he said. “With our Pixel business, we want to focus on growing our footprint in North America with our games, given that it’s the leading global market for mobile games.”

Its Anaxi business would transition to a build-and-buy strategy, which would have access to seven operators in six countries across eight jurisdictions.

Aristocrat chair Neil Chatfield with CEO Trevor Croker at its headquarters in Macquarie Park, Sydney. Picture: Britta Campion/The Australian

“It gives us around 80 per cent access to the North American market through Pennsylvania, New Jersey and Michigan, so we feel good that our content is resonating with the players in those markets and that there’s opportunity to continue to expand and grow there,” Mr Croker said.

Pixel United performance was affected by mixed market conditions, as overall mobile bookings moderated, which Mr Croker said Aristocrat was right-sizing until the market went back into growth.

Aristocrat noted that the Australian market was flat in the past 12 months as it faced a “challenging operating environment with regulatory uncertainty”. The company completed Australia’s first cashless gaming trial amid moves by the NSW government to shift away from the use of cash when playing the pokies, and was taking “lessons learned” to help develop the next generation of trial technology.

“The first half was really around a lot of regulatory uncertainty, with elections and gaming policy being debated pretty widely around the country,” Mr Croker said.

Aristocrat shares fell 1 per cent to $39.48, as Citi analysts said investors were focused on the increased spend in D&D, which was 6 per cent more than what it had forecast.

Mr Croker said: “D&D is largely going to be around technology to increase our footprint across business verticals such as scaling the Anaxi business to allow us to move games from other businesses and then continue to support the gaming and the Pixel businesses in their portfolios to take share in the markets they participate in.

“We will continue to navigate challenges with a focus on portfolio performance and capturing the significant strategic opportunities in front of us, including delivering on our online RMG strategy with the proposed acquisition of NeoGames to close in the first half of calendar 2024.”

Aristocrat will pay a final fully franked dividend of 34c a share, taking the total for the year to 64c a share for the year – up 23 per cent from 52c a share a year earlier.

Originally published as Aristocrat Leisure books higher profit and revenue on growth in US market