Aristocrat share price dives despite 27% profit boost

The Aristocrat Leisure Limited (ASX: ALL) share price is down 7% in early trade.

Shares in the S&P/ASX 200 Index (ASX: XJO) gaming technology company closed yesterday trading for $37.88 and are currently changing hands for $35.24 apiece.

This comes following the release of Aristocrat’s financial results for the 12 months ending 30 September.

Here are the highlights.

Aristocrat share price slides as profits soar

• Revenue of $5.57 billion, up 17.7% year on year
• Normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.85 billion, an increase of 20% from the prior year
• Normalised profit after tax and before amortisation of acquired intangibles (NPATA) of $1.10 billion, up 27% in reported terms and 20% in constant currency
• Total dividends of 52 cents per share, fully franked, an increase of 26.8% from the prior corresponding 12 months

What else happened over the 12 months?

The Aristocrat share price failed to receive a lift this morning from the company’s strong balance sheet. As at 30 September the company had a net cash position of $564 million and liquidity of $3.8 billion.

Aristocrat reported that its Gaming and Pixel United assets continued to grow and diversify over the 12 months, driven by “exceptional performance” in North American Gaming Operations and global Outright Sales.

Its Americas margin expanded by 2.7% to 56.1%. This was achieved despite headwinds from supply chain disruptions and mixed operating conditions across its core markets.

On the downside, and possibly pressuring the Aristocrat share price today, overall mobile bookings at its Pixel United segment “moderated” from their post-COVID levels in the prior reporting year.

The company’s Ukrainian operations were impacted by Russia’s invasion, with Aristocrat assisting most of its Ukrainian workforce to relocate to safer places.

What did management say?

Commenting on the results, CEO Trevor Croker said:

Aristocrat’s performance underlines the ongoing implementation of our growth strategy. Throughout the year, we continued to invest in competitive product portfolios to drive further share growth across key segments, greater operational diversification and deeper business capability…

As we look ahead, we believe that Aristocrat’s outstanding product portfolios, growing operational resilience and capability, along with a highly engaged team and strong culture, positions us well to maintain our momentum despite uncertain conditions.

It may be that these “uncertain conditions” are spooking ASX 200 investors this morning and pressuring the Aristocrat share price.

What’s next?

The company reported it expects to deliver NPATA growth over the full year to 30 September 2023.

Aristocrat said it will continue to seek opportunities for future growth, including markets in Poland, Spain and Canada, as well as bringing forward additional game development capabilities.

Looking ahead, the company expects continued “strong revenue and profit growth” from its Aristocrat Gaming segment.

Potentially dragging on the Aristocrat share price is the expectation of continuing lower growth in bookings and profit from Pixel United, compared to recent years.

Aristocrat share price snapshot

With today’s intraday fall factored in, the Aristocrat share price is down 22% year to date. That compares to a calendar year loss of 6% posted by the ASX 200.

The post Aristocrat share price dives despite 27% profit boost appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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