Aristocrat Leisure Limited reiterates FY2018 outlook at AGM

Aristocrat Leisure Limited (ASX: ALL)­­­ today held its Annual General Meeting, where CEO Mr. Trevor Croker provided an update on the progress of the company’s recent major acquisitions, impact of U.S tax reform, and full year trading outlook.

As part of its strategy to drive recurring revenues, Aristocrat announced two major acquisitions in 2017; social gaming firms Plarium and Big Fish.

The Plarium acquisition was finalised on 20 October, and today Mr. Croker stated that “the integration of Plarium is progressing extremely well and in line with our expectations.”

In Aristocrat’s FY2017 results presentation in November, the company stated it expected earnings growth from Plarium in FY2018, but that “the impact of purchase price accounting, funding and transaction costs will result in only a small NPATA contribution for the period.”

Meanwhile, the Big Fish acquisition was only recently completed in January, and Mr. Croker said Aristocrat is “working diligently with the Big Fish team through an integration and strategy-setting process.”

Further detail regarding the progress of the acquisitions and Aristocrat’s other business segments will be provided in an investor strategy update scheduled for 1 May.

Due to the recent tax reforms in the United States, Aristocrat expects its FY2018 effective tax rate to be 3% lower than in FY2017, including a one-off, non-cash net benefit of approximately US$6.5 million.

As for the trading outlook for FY2018, Aristocrat has reiterated the guidance it provided in November, with the only change being the benefits derived from the changes in US tax legislation.

Foolish takeaway

Management appears satisfied that the business is performing as expected, and the one-off tax benefit is a nice little bonus.

Still early days with the acquisitions and not much in the way of new information, but at least Plarium is on track thus far. The investor strategy update in two months should provide further details and an early indication on how Big Fish is coming along.

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Motley Fool contributor Ian Crane owns shares of Aristocrat Leisure Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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