Aristocrat bets on its strategy as CEO says the company will return to growth this year

Aristocrat Leisure CEO Trevor Croker says the gaming firm is on track to return to growth after a ‘unique and challenging’ 2020.

Aristocrat has been developing “cashless and cleanliness innovation” in the US market.

Aristocrat Leisure chief executive Trevor Croker says the poker machine maker is on track to return to growth in 2021 as it bounces back from COVID-19 casino and gaming venue shutdowns.

Mr Croker said Aristocrat - which got $13.3m from the federal government‘s JobKeeper wage subsidy scheme in the year to September 30 - had entered 2021 with “excellent operation momentum”.

He said 2020 was “a unique and challenging year” in which normalised full-year net profit dived 46.7 per cent to $476.6m and revenue eased 5.9 per cent $4.1bn.

“But (2020 was) also a year that revealed Aristocrat’s strengths and gave us an opportunity to improve and extend our strategic advantages,” Mr Croker said at the group’s annual meeting on Friday.

“We’ve strived to seize that opportunity, and while we cannot be sure of how the pandemic will affect our operating environment in future, we have entered the 2021 financial year with excellent operation momentum, a proven strategy, strong team engagement and belief.

“Based on trading performance to date across our gaming and digital operations, Aristocrat reiterates the outlook guidance provided in November 2020. Specifically, we plan for continued growth over the 2021 fiscal full year”.

The upbeat comments come as chief executives of some of Australia’s biggest companies have signalled growing optimism the post COVID-19 world is beginning to emerge as vaccination programs begin.

Mr Croker said the group’s effective tax rate expected to remain around 24-25 per cent, “reflective of current corporate tax rates and regional earnings mix”.

Meanwhile, he expected further growth in digital bookings, with user acquisition spend expected to remain between 25-28 per cent of overall digital revenues

“We remain ready to invest to accelerate our strategy. During fiscal 2020, we concluded two deals to acquire access to more world-class game development capability in digital. Investments in the proven game studios Neskin and Proteus signalled the company’s intent.

“We’re also investing more in customer experience leadership – or CX as we describe it. CX is all about unlocking new value streams by delivering customers and gaming patrons connected products and services.

“During the reporting period, our new CX team successfully launched our first mobile loyalty products for a major US customer, while also developing and delivering cashless and cleanliness innovations in the North American market.

“In the context of COVID, and with the encouragement of our customers, we will continue to significantly escalate our focus on convergence products and services as part of our strategy.”

Aristocrat maintained its final dividend to pay shareholders a dividend last year, despite accessing JobKeeper payments and suffering a halving of full-year net profit.

It cancelled its interim dividend as the pandemic hit, while the board and management took a voluntary 20 per cent pay cut from May 1 to September 30. Mr Croker, meanwhile, took a 30 per cent pay cut for that period.

“The board recognises that many shareholders rely on dividends throughout the year. Whilst it was appropriate to cancel the interim dividend and maximise the group’s capacity to manage through an uncertain and COVID impacted period, we do want to express our thanks for shareholders’ support,” Aristocrat chairman Neil Chatfield said.

“As a board, we believe the final dividend we authorised of 10c per share in respect of the period ended September 30, 2020 was prudent and in shareholders’ interests, as well as a strong demonstration of our confidence in the future, notwithstanding the ongoing uncertainty and consequences of the pandemic.”

After hitting a low of $14.81 in March, Aristocrat shares have since more than doubled, rising to $30.59.