The Aristocrat Leisure Limited (ASX: ALL) share price is under the spotlight after announcing its FY23 report.
Aristocrat Leisure is a major producer of poker machines and casino management systems in Australia and the US. It also has a growing mobile games segment.
FY23 highlights
Here are some of the highlights for the 12 months to 30 September 2023:
- Revenue rose 13% to $6.3 billion
- Normalised EBITDA (EBITDA explained) grew 13.8% to $2.1 billion
- Normalised net profit after tax (NPAT) grew 24.4% to $1.25 billion
- Statutory NPAT jumped 53.3% to $1.45 billion
- Operating cashflow rose 44.4% to $1.8 billion
- Total dividend per share up 23.1% to $0.64
Aristocrat Leisure said that its revenue growth was underpinned by “outstanding growth” in gaming outright sales, combined with continued expansion of its gaming operations footprint. Growth is normally key for the Aristocrat Leisure share price.
The company said that Pixel United “demonstrated resilience” in a market where demand reduced, and retained leading positions in “key genres” including the number one in ‘social slots’.
It said it continued to fund a high level of organic investment in its priority areas of design and development, capital expenditure and user acquisition which will help drive “near and longer-term competitiveness, capability and performance.”
The company also revealed that Anaxi delivered on its initial market entry commitments for iGaming, including signing agreements with partners representing over 80% of the US market.
Balance sheet and shareholder returns
As mentioned, the full-year dividend increased by 23%. It said that surplus cash of $811 million was returned to shareholders through dividends and on-market share buy-backs in the period.
It finished the financial year with net cash of $809 million, which was a 43.5% increase compared to last year.
Outlook for the Aristocrat Leisure share price
In FY24 the company is expecting to deliver underlying NPAT (NPATA) growth over the year to 30 September 2024.
It’s expecting continued strong market share, revenue and profit growth from Aristocrat Gaming, with a “possible moderation” in consumer spending in key markets.
The company will be “disciplined” with Pixel United, with a focus on market share and “investment efficiency to maintain momentum.” It will also complete the proposed acquisition of NeoGames.
This ASX share is doing well at growing profit. I’m not sure how much this business can grow, it’s tricky to say. Some investors may not like the gambling element of the business. It’s not one I’m looking to invest in my own portfolio.
For me, there are plenty of smaller ASX growth shares that could deliver stronger returns over the long-term.
