Aristocrat posts strong 2012 profits
Two recent online and social gaming deals foundations for company to invest further and capitalise on "new, high growth distribution channels", CEO says.
Slot manufacturer and gaming solutions provider Aristocrat Leisure has revealed profits of AU$91.7m for the first nine months of 2012, ahead of guidance issued in August and a 69% increase on the same period last year.
From January to 30 September this year Aristocrat generated Net Profit After Tax (NPAT) of $45.5m, a 128.6% increase compared to the nine months to 30 September 2011 with results reflecting “on-going improvements in operational delivery and share gains across all key markets, with more competitive product portfolios driving performance momentum in line with the group’s strategy”, the company said in a statement.
Aristocrat, that generates the vast majority of its revenue from land-based contracts, saw earnings growth of more than 53.5% and revenue growth of 25.4% in the 12 months to 30 September 2012 with EBIT growth of 75.7% and revenue growth of 29.7% in the first nine months of this year.
Jamie Odell, chief executive and managing director, said: “We’ve created positive momentum by taking share from our competitors and growing sustainable value in difficult conditions in key markets around the world.
“Our game content, hardware and systems products are continuously improving, as is our focus on targeting the most profitable markets and segments,” he added.
The company’s previous attempts to enter the online space have centred largely around partnership deals, particularly in the US however as Odell said in today’s announcement it has recently been “prepared to capitalise on new, high growth distribution channels” with the its strengthened balance sheet enabling it to consider investing strategically.
In November eGaming Review exclusively revealed that it would switch from a long-term partnership agreement with GameAccount Network to instead replicate its Internet Gaming System, principally for land-based US casino customers, after talks to buy the gaming software specialists for a multi-million pound sum over the summer broke down.
The deal will see GameAccount Network continue to develop and distribute Aristocrat games into Europe for the foreseeable future and for Aristocrat to buy and replicate GameAccount Network’s IGS without GameAccount Network’s games content, in order to achieve operational and technical independence over time.
The two companies originally struck a multi-year US partnership in August last year with Aristocrat setting up hardware in Nevada and licensing GameAccount Network’s IGS and its games content to Aristocrat in order for it to sign-up some of its 300 existing US land-based casino clients online with a range of freeplay slots, casino table games and skill games, including recreational poker variants. This solution became the Aristocrat ‘nLive solution in the US and premiered at G2E in 2011.
In April this year, GameAccount Network and Aristocrat launched their first joint freeplay online casino website hosted in Nevada, Myliveonlinecasino.com for the Maryland Live! Casino, while in October Aristocrat launched a freeplay casino for Michigan’s Island Resort & Casino.
More recently it has examined the merits of entering the social casino space and after a period of due diligence this week announced it had agreed a deal to acquire Product Madness for an undisclosed fee.
The acquisition will aim to boost Aristocrat’s online business and see it provide social gaming content to its casino customers as well as generating revenues via Product Madness’ own player base.
San Francisco-headquartered Product Madness was founded in 2007 by Lior Shiff and Jose Brotons, and is ranked in the top five operators in the social casino slot genre on Facebook, with more than 500,000 daily active users. It ranked 12th in the inaugural Power 25 published by eGR’s sister magazine Social Casino Intelligence in August.
“Recently announced acquisitions position us to compete in the expanding online and social gaming markets,” Odell said. “These strategic steps, coupled with our investment in outstanding creative and technical talent, will deliver real value for the business over the medium term as the industry evolves.
“Major new game releases across all key markets, continued cost discipline and the benefit of efficiency and culture measures are expected to drive a further lift in operational performance over the current financial year, despite sustained headwinds.
“Over the coming year, Aristocrat expects to continue to deliver growth across our global portfolio, fundamentally driven once again by higher game and product quality and exceptional operational performance,” Odell added.