ARISTOCRAT'S US EXPANSION DELIVERS BUMPER PROFIT

Written on the 30 November 2017 by Ben Hall

ARISTOCRAT'S US EXPANSION DELIVERS BUMPER PROFIT

POKER machine maker Aristocrat has made the most of its expansion into the US lifting its annual net profit by 41.3 per cent to $495.1 million.

The US expansion included the acquisition of Seattle-based social gaming company Big Fish Games for $A1.4 billion and Aristrocrat says it expects the solid growth to continue through until the end of FY18.

CEO Trevor Croker says Aristocrat did face increased competition but managed to deliver another strong result.

"Industry-leading content, hardware and technology, coupled with effective execution focused on our highest-value opportunities, once again underpinned our performance," Croker says.

"Going forward, Aristocrat will continue to target high-quality growth, with the benefit of our established performance momentum, broadening capabilities, strong balance sheet and growing recurring revenue base."

Aristocrat says the acquisition of Big Fish Games will help drive revenue growth even further. Big Fish is a global publisher of free-to-play games that focus on specific segments, including social casino, social gaming and premium paid games and has well-known brands such as Gummy Drop! and Fairway Solitaire.

Big Fish will operate as a stand-alone business alongside Aristocrat's other social gaming operations, Product Madness and Plarium.

"The strategic and financial benefits from the acquisition are highly compelling," Croker says.

"The acquisition of Big Fish will immediately provide scale across our entire digital platform, following the recent acquisition of Plarium, which expanded our digital business into the fast-growing social gaming market."

Big Fish has about 700 employees and five studios in Seattle and Oakland in the US.

The solid results follow on from Aristrocrat's half year profit rise of 57 per cent and revenue lift of 22 percent, which was also led by growth in the United States.

The company, however, still faces the uncertainty of a legal case involving one of its machines.

The landmark pro-bono legal test which was undertaken by Maurice Blackburn lawyers to highlight the "deceptive and misleading behaviour" of pokies manufacturers and venues will begin in the Federal Court with Aristocrat and James Packer's Crown Resorts as defendants in the case.

The first-of-its-kind case will focus on the design of poker machines which allegedly contribute to players being deliberately deceived on their prospects of winning, in particular the design of the "Dolphin Treasure" machine. The potential financial ramifications of this lawsuit on Aristocrat are unclear.

It was new CEO and MD Croker's first big test since he replaced Jamie O'Dell in early 2017, with Aristocrat recording its 10th consecutive period of growth with its half year results in March.

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Business News Australia

 
Author: Ben Hall

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