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Aristocrat Leisure hits 52 week low on Australian Stock Exchange

Mon, Dec 24, 1:17pm by Head Editor

Gaming company Aristocrat Leisure dropped its share price on the Australian Stock Exchange (ASX) to a 52-week low of $20.92 last Thursday, highlighting a fall of 33% in the past four months. It has since lifted to $21.11 at close of business on Friday 21 December.

Previously, the price of shares for the organisation had been at an all-time high of $33.06 in July 2018.

Aristocrat today has a global gaming presence, through a number of acquisitions the company has evolved from a predominantly physical poker machine business, into a diversified gaming operation.

Social gaming a key component of Aristocrat’s business

To complement its physical gaming presence, which is evident across major casinos globally, including the famous Las Vegas strip, the company has expanded its operations into social gaming.

Aristocrat estimates the global size of these two markets to be US$4.5 billion for the casino market and US$45.9 billion for the social gaming market.

It is estimated that over the next three years, the gaming market is expected to grow by 13% per annum to around US$73 billion.

In 2017, Aristocrat acquired social games developer Plarium and casino platform Big Fish who are seen as key pieces in facilitating the company’s growth.

Aristocrat are now considered the world’s second largest provider of social online games behind the Israel-based mobile games company, Playtika.

Online and mobile gaming is considered “capital-light” and with the company appearing to move towards a digital focus, it is expected there should be a boost to margins over time, according to ASX market advice website The Motley Fool. It adds that the large addressable market also provides great opportunities when compared to the more saturated pokie market.

With Aristocrat a large player in casino games it is considered a smaller player in the bigger social games market.

The Motley Fool reports that revenue growth in casino games has slowed in recent months, affecting the share price and expectations for the stock. The slowdown appears to have been felt across the industry, with Aristocrat maintaining market share.

Aristocrat’s revenue grew by 48% to $3.6 billion and profit by 25% to $616 million in the last financial year.

Aristocrat Leisure’s profit strong despite share price decrease

One of the world’s leading providers of gaming solutions, Aristocrat Leisure’s recent Australian profit announcement of $542.6 million was stated to be “driven by strong organic growth … driven by an increasingly broad and competitive product portfolio together with effective execution and a focus on customers and innovation,” according to Aristocrat chief executive Trevor Croker.

At the recent profit announcement, he added that “through the acquisitions of Big Fish and Plarium we learned a lot about customer acquisition, data science, live operations – things what we didn’t know. They’ve brought immeasurable value to us in the way we look at these things.”

The digital side of the business, now represents 27% of the company’s profit.

The company is licensed in 240 gaming jurisdictions across 90 countries in the world.

Aside from the company’s spinning reel slot machines, the company has interests in gambling systems, i.e. a computerised network systems that manage slot machines.

It also offers computerised card game simulations, electronic table games and linked jackpot systems, including Hyperlink.

The United States-based subsidiary of Aristocrat Leisure, Aristocrat Technologies, recently celebrated the launch of their new $45 million headquarters in Summerlin, Las Vegas just over a week ago. Chairman, Dr. Ian Blackburne cut the blue ribbon to officially unveil the 180,000 square-foot location.

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