Aristocrat’s financial forecast bumped up after strong digital performance

By William Brown Updated
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Australian gaming manufacturer Aristocrat’s digital arm saw strong growth in downloads of its social casino games in the first half of the 2021 financial year, according to analysts from JP Morgan Australia.

Asia Gaming Brief reports that not only have the number of downloads and number of daily active users held strong, in-game monetisation and bookings are also higher than initial expectations, pushing JP Morgan to upgrade its earnings forecast for Aristocrat by 5.8 per cent in the financial year.

“Industry feedback and discussions with ALL management suggests the number of downloads have decreased across certain casual games.

“This is consistent with our previous note, however, we acknowledge in-game monetisation and bookings have moved in the opposite direction and are higher than expectations.”

Aristocrat’s digital arm has been long seen by analysts as a beacon of growth for the company.

In the 2020 financial year, whilst casino closures and travel restrictions caused overall group revenue to fall to $4.1 billion, the company’s 29 per cent growth in digital went a long way to offset a 35 per cent drop in land-based revenue.

Last February, Aristocrat chief executive officer Trevor Croker said the company plans to “significantly escalate” its focus on convergence products and services, which may involve mergers and acquisitions.

JP Morgan said it expects Aristocrat to post NPATA of A$260 million, down 29.4 per cent year-on-year, with digital EBITDA up 22.7 per cent to A$364.8 million.

Aristocrat Leisure’s portfolio of social and casual casino games include Cashman Casino Las Vegas Slows, EverMerge, Lightning Link Casino Slots and Robot Showdown, among others.

JP Morgan said another four games are close to soft launch and that the company has anywhere between 12 to 15 games in the pipeline at any point in time.

Aristocrat flags new poker machine rollout 

Australian gaming machine manufacturer Aristocrat Leisure has announced it will launch a new product with responsible gaming features.

GGR Asia reported in March that the digital games provider plans to launch its new product during the first quarter of 2021, with the product approved in some Australian states.

“We continue to bring forward options that have the potential to empower players and support our responsible game play commitments,” Aristocrat chief executive and managing director Trevor Croker said.

A second generation of electronic gaming machines with responsible gaming features, that the company calls Flexiplay, was trialled in 2019 and has been approved by regulators in New South Wales and Queensland.

“Flexiplay allows players to voluntarily set time limits and quarantine winnings from being played down, via the timer and piggy bank functions.” Mr Croker said.

He added: “We are preparing to place the first of these games in the market in the first quarter.

“We look forward to learning more from the release of Flexiplay, and to applying the lessons to further product-based responsible gaming innovation in the future.”

Aristocrat said its normalised profit for the 12-month period ended September 30 declined by 46.7 per cent.

The firm reported a normalised full-year profit after tax of A$476.6 million.

Aristocrat’s reported profit was up 97.2 per cent to almost A$1.38 billion, impacted by the recognition of a A$1.1 billion deferred tax asset.

Group operating revenue in the 12 months to September 30 decreased 5.9 per cent year-on-year to A$4.14 billion.

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