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Sydney, Feb 26, 2008 (ABN Newswire) - Gaming developer and marketer Aristocrat Leisure (ALL) delivered a 3.4% increase in full year net profit, reflecting difficult overall market conditions across its largest regions – Australia, North America and Japan.
Net profit rose to $247.1 million for the year ended 31 December 2007, from $240.1 million the previous corresponding period.
The profit increase sat well with investors as it was slightly above its earlier forecast of $240.1 million.
Shares jumped 9.8% to $10.87 in early morning trade before easing to $10.63.
"2007 was a particularly challenging year for the industry," managing director Paul Oneile said.
"While these market conditions impacted trading in our core businesses, I am particularly pleased with our results in emerging markets, where we have captured a significant share of new opportunities," he said.
Despite the difficult market conditions and the impact of the stronger Australian dollar, total segment revenue increased by $50.7 million (up 4.6%) to $1,160.5 million.
The group reported earnings before interest, tax, and research and development costs of $1.12 billion, up 4.4% from previous year's $1.07 billion.
The Australian market was impacted by the introduction of non-smoking legislation coupled with delays in the approval and take up of Ticket-in Ticket-out technology.
Revenue for Australia increased by 1.4% to $280 million, while profits remained flat.
North American revenue declined and profit fell when measured in local currency terms, but Aristocrat says it expects the recent approvals in California and Florida to significantly grow overall market demand in North America.
Japanese revenue improved by $40.8 million, with a total of 29,843 units sold, a significant improvement on 2006.
New gaming regulation in Japan has created uncertainty in the sector, with the number of Pachinko halls having fallen by about 15%.
Pachinko machines are a cross between a pinball machine and a video slot machine and are produced by Sammy (amongst other companies), a company Aristocrat said it continues to have long term working relationship.
"Since the full transition to Regulation 5 in the final quarter of the year, there appears to have been a positive change in operator sentiment, with selling prices stabilising and a heightened operator interest in the group's products," Aristocrat said.
In addition, Aristocrat said strong growth was reported from businesses in emerging markets, with underlying profitability in Asia-Pacific (up 107%), Europe (up 174%), South America (up 39%) and South Africa (up 49%), reflecting the group's growing presence in these regions.
"The 2008 result will be influenced by a range of key factors, including the ultimate size of the North American video market, a continuation of positive sentiment in Japan and the successful global rollout of ViridianTM Gen7TM, in addition to the level of foreign exchange rates.
"The Group's business fundamentals of improved pricing, cost leveraging and strong cash flows remain intact," the group said.
Aristocrat declared a dividend of 25 cents per share, bringing the total dividend for 2007 to 49 cents per share.
This represents a 36.1% increase in the total dividend payout of 36 cents in 2006.
Earnings per share were at 53 cents compared to 51.2 cents in 2006.
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