Aristocrat Leisure Limited (ASX: ALL) has just reported its FY21 half-year result. Should investors bet on the Aristocrat Leisure share price?
Aristocrat Leisure’s half-year result
The business reports both a normalised result and a statutory result. Normalised numbers are after excluding the impact of certain significant items.
Revenue fell by 1% to $2.23 billion in the six months to 31 March 2021. This was despite all of the gaming impacts due to COVID-19 during the period and foreign currency exchange headwinds. On a constant currency basis, revenue rose 10.7%.
There was good performance in digital, the Americas and ANZ gaming.
Normalised EBITDA (EBITDA explained) rose by 6% to $750.3 million, with the normalised EBITDA margin improving from 31.4% to 33.7%.
Normalised net profit after tax (NPAT) rose by 18.4% to $362.2 million whilst normalised NPATA grew 11.8% to $411.6 million. NPATA here stands for net profit after tax and before amortisation of acquired intangibles. Normalised profit / earnings per share (EPS) rose 18.6% to 56.8 cents.
Reported net profit after tax fell by 73.5% to $346.5 million. Statutory NPATA fell 71% to $395.9 million.
Operating cashflow declined by 42.2% to $358.2 million.
Despite all of that, the gambling machine maker revealed that its net debt improved by 40.9% to $1.33 billion.
Interim dividend
The Aristocrat Leisure board decided to declare a dividend of 15 cents per share. The company didn’t declare a dividend 12 months ago, so that was a large improvement.
Outlook for Aristocrat Leisure and the share price
Aristocrat Leisure said that it’s planning for strong growth over the full year to 30 September 2021.
It’s expecting enhanced market-leading positions with its gaming operations, measured by the number of machines that are operating and game performance.
The company expects sustainable growth in floor share across key gaming outright sales markets globally.
Aristocrat Leisure expects further growth with digital bookings. User acquisition spending is expected to be a little above the historic range between 25% to 28% of overall digital revenue, depending on the timing and success of new game launches in the second half of FY21.
It’s going to continue to invest in design and development to drive sustained, long term growth.
In other words, the company is expecting continuing growth and it’s going to keep investing for it.
Aristocrat Leisure is one of the large ASX growth shares that was growing well before COVID-19 and is now seeing a good recovery. The spending on digital is important for the future. I’m not sure how much it can grow into the future though.
