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Digital on the rise but land-based COVID struggle sees Aristocrat profit fall 12.8% in 1H20

Australian slot machine giant Aristocrat Leisure Limited reported a 12.8% decline in net profit after tax and before amortization to AU$368.1 million and 7.7% fall in EBITDA to AU$707.6 million in the six months to 31 March 2020 as COVID-19 began to make its presence felt.

The depressed results came despite a 7% increase in group-wide revenue to AU$2.25 billion, boosted by strong growth in the company’s digital segment where revenue rose 27.3% to AU$1.04 billion and profit by 20.9% to AU$297.4 million.

However, Aristocrat suffered declines in all of its land-based segments: Australia and New Zealand saw revenue fall 10.8% to AU$205.6 million, the Americas by 4.8% to AU$911 million and International by 6.4% to AU$90.6 million.

Aristocrat CEO and Managing Director Trevor Croker said the half-year result, “demonstrates our core strengths and the relevance of our product-led strategy, despite the unprecedented challenges generated by the COVID-19 pandemic.

“Our progress in driving share through outstanding product and diversifying revenue streams – including across attractive Digital genres and titles – are also evident in this result.

“Particularly in this uncertain period, we will continue to focus on what we can control and do all we can to protect the health and wellbeing of employees, customers and suppliers.

“We will also continue to drive our strategic advantages in product, with aggressive investment in our core growth engines of Design and Development and User Acquisition to target share and continue to diversify our portfolios.

“In land-based, we will execute our ambitious plans to partner and grow with our customers as conditions improve. And in Digital, we will accelerate execution of our portfolio-based growth strategy as we further mature and scale the organization.

“Our strong balance sheet, ample liquidity and excellent financial fundamentals position us to emerge from this period strongly, while allowing us full optionality to continue to invest for long-term growth.”

Aristocrat cited available liquidity of AU$1.8 billion as of 31 March 2020. The company recently announced it would suspend its FY20 interim dividend to further enhance liquidity.

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