The chairman of Australian slot supplier Aristocrat Leisure Limited used the company’s annual general meeting to stress that the company continues to perform at a high level, recording a 15 percent rise in revenue to a record $2.45 billion despite a flat market and new competition.
Earnings before EBITDA also rose 24 percent as compared to the prior year, with an operating cash flow of over $799 million, up 17 percent.
“This result was achieved right across the group’s global portfolio,” said Aristocrat Chairman Dr. Ian Blackburne at the meeting, “in particular with outstanding momentum in the Americas, significant growth in the digital and international Class III segments and sustained strength in our Australian business.”
Aristocrat CEO and Managing Director Trevor Croker added that a number of strategic acquisitions have allowed the supplier to evolve its business and drive growth. “The business is significantly bigger, and more geographically and operationally diverse than at any time in our history—and now includes a material presence in unregulated, large and fast-growing non-casino game segments,” Croker said.
“We have constructed a robust platform upon which we have built, and will continue to pursue, market-leading positions wherever strategic opportunities present across the total global land-based and digital gaming market.”
Croker also commented that Aristocrat expects a year-on-year reduction of around 3 percent in the group’s effective tax rate for the fiscal year ending September 30, 2018, resulting in a US$6.5 million gain for the company.
“In terms of Aristocrat’s effective tax rate for the 2018 fiscal year, our initial assessment is that it will reduce by around 3 percentage points compared to the effective tax rate that applied over the 2017 fiscal year,” Crocker said. “This includes a provisional non-cash net benefit of approximately US$6.5 million, reflecting the one-off revaluation of the group’s U.S. net deferred tax liability.”
The reduction is due to the U.S. Tax Cuts and Jobs Act, passed in December, which cut the corporate income tax rate from 35 percent to 21 percent.
“While Aristocrat derives a significant proportion of group earnings from North America, current transfer pricing agreements have the effect of repatriating earnings to Australia, which limits the potential benefits of the reduction in U.S. corporate tax rates for the group,” Croker said.
Aristocrat’s net profit after tax for fiscal year 2017 was up 41.3 percent year-on-year. Profit was AUD495.1 million (US$386.2 million), compared to AUD350.5 million in the prior-year period.
“We are continuing to work through a detailed analysis of the impacts of these reforms on our business, including potential re-investment of a portion of benefits back into the business,” he said.
“Going forward, we will intensify our focus on recruiting, developing and retaining outstanding leadership, creative and technical talent, and entrenching a shared culture that drives both performance and industry-leading responsibility and sustainability. I have great confidence in our core business continuing to deliver, and am energized by the incremental growth opportunities from our total digital business.”
