In morning trade the Aristocrat Leisure Limited (ASX: ALL) share price has been amongst the best performers on the S&P/ASX 200 index following the release of its half year results.
At the time of writing the gaming technology company’s shares are up 7% to $28.40.
What happened in the first half?
Aristocrat Leisure has managed to build on FY 2018’s impressive result with further strong growth in the first half of the new financial year.
According to the release, for the six months ended March 31 the company achieved operating revenue of $2,150.3 million and normalised EBITA of $644.4 million. This was an increase of 29.8% and 16.8%, respectively, on the prior corresponding period.
On the bottom line the company posted normalised NPATA of $422.3 million, up 16.8% on the same period las year.
As a comparison, a recent note out of Goldman Sachs reveals that its analysts were expecting revenue of $2.1 billion, EBITA of $617 million, and NPATA of $394 million. Aristocrat Leisure has outperformed all of the broker’s forecasts.
This strong performance allowed the company to declare an interim fully franked dividend of 22 cents per share, up 16% on the prior corresponding period.
What were the drivers of the result?
Management advised that the result was driven by continued strong growth in its Americas and Digital businesses, together with a further lift in its performance across the ANZ region.
The company’s CEO and managing director, Trevor Croker, said: “Aristocrat continues to deliver above market profitable growth, leading to strong free cash flow and the ability to reinvest to self-fund future growth, whilst ensuring strong foundations remain in place.”
Adding that: “Another double-digit profit improvement over the six months to 31 March 2019 demonstrates our sound and ambitious strategy and strong commercial execution. We continued to significantly expand our addressable markets across both digital and land-based segments.”
Once again, no formal guidance was given for FY 2019, but management reiterated that it expects “continued growth” this year.
It also remains positive on its land-based businesses in the second half and anticipates “further growth in Digital bookings supported by new game releases.”
Another positive is that it is making changes to its structure due to the high level of profits being made in the United States. This is expected to result in reductions in both cash tax paid and accounting tax expense. Overall, it expects a 150 to 250 basis points reduction in its effective tax rate to 25% to 26% once all changes have been implemented.
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