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Poker machine maker Aristocrat Leisure enjoys a strong year

Tue, Dec 4, 3:11pm by Staff Writer

Poker machine maker Aristocrat Leisure has enjoyed a profitable year to September 30, with net profit after tax of A$729.6 million.

The company has posted a 34 per cent profit after strong performance in North America and gains in its digital business.

The company will spend big in acquiring users across its booming digital business, with chief executive Trevor Croker declaring he will not shy away from investing in marketing, design and development during the next 12 months.

The result came after an estimate of A$741 million by analysts at Morgan Stanley.

There was a 54 per cent increase in Aristocrat Leisure’s spend on design and development, which was higher than the marked had anticipated.

As a result, the company’s share price dipped 9 per cent in early trade last week but recovered to trade down 4.6 per cent to be at $A24.19.

Aristocrat wants to develop its digital assets

The North American and Australian market is a challenging one for poker machine manufacturers due to ‘low churn rates’ or the failure of operators to swap old machines for new ones.

“We’ve delivered 34 per cent growth against the market delivering 5 per cent. Not a bad start,” Mr Croker told The Australian Financial Review.

“The other thing is we take a long-term focus and we’ve fully focused our investment in D&D (design and development) and user acquisition, which are the two drivers for growth for our organisation.”

The company spent A$1.9 billion in acquiring digital groups Big Fish and Plarium and they have added technology and skills that have been applied across the company’s digital assets.

“Through the acquisitions of Big Fish and Plarium we learned a lot about customer acquisition, data science, liver operations – things we didn’t know,” Mr Croker said.

Profits from the group’s Americans business jumped 16 per cent to A$650 million, with its Australian business posting a record result, with total revenue jumping 48 per cent to A$3.6 billion.

Aristocrat Leisure is one of the world’s leading providers of gaming solutions. It is licensed in 240 jurisdictions and 90 countries around the world.

The company employs more than 5,000 people worldwide and was founded in 1953. It provides a diverse range of products and services including electronic gaming machines, social gaming and casino management systems.

Poker machines in Australia are unlike those anywhere else in the world. Most jurisdictions allow deposits of any cash denomination and can be loaded up with thousands of dollars in just a moment.

They can be played every few seconds, with enough jackpots reaching into the tens of thousands on offer for players. If played at their maximum bet and maximum speed, they can consume between A$600-1200 per hour.

A report conducted by the Productivity Commission found that 25 per cent of Australians play a poker machine once in any given year, with only four per cent playing once a week or more.

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