The Aristocrat Leisure Limited (ASX: ALL) share price is sinking on Wednesday.
In morning trade, the gaming technology company's shares are down 7% to $35.08 following the release of its full year results.
Aristocrat share price sinks on FY 2022 results
- Operating revenue up 17.7% to $5,573.7 million
- Normalised EBITDA up 20% to $1,850.9 million
- Normalised net profit after tax up 30.7% to $1,000.9 million
- NPATA up 27.1% to $1,099.3 million
- Final dividend of 52 cents per share
What happened during FY 2022?
For the 12 months ended 30 September, Aristocrat reported a 17.7% increase in operating revenue to $5,573.7 million.
This was driven by a 31.4% increase in Aristocrat Gaming revenue to $2,982.6 million, which offset a 0.6% decline in Pixel United revenue to US$1,834.7 million.
On the bottom line, Aristocrat reported normalised net profit after tax before amortisation (NPATA) of $1,099.3 million, which was up 27.1% year over year. On a reported basis, which includes certain significant items, NPATA was up 13.9% to $1,046.9 million.
Management advised that this strong revenue and profit growth reflects sustained investment in top-performing product portfolios, differentiating capabilities, increased operational diversification, and business resilience.
How does this compare to expectations?
According to a note out of Goldman Sachs, its analysts were expecting Aristocrat to deliver revenue of $5,654.2 million and EBITDA of $1,670.1 million.
While Aristocrat missed on the top line, its normalised EBITDA was stronger than Goldman was forecasting.
Management commentary
Aristocrat's CEO, Trevor Croker, was pleased with the company's performance in FY 2022. He said:
Aristocrat's performance underlines the ongoing implementation of our growth strategy. Throughout the year, we continued to invest in competitive product portfolios to drive further share growth across key segments, greater operational diversification and deeper business capability.
Strong performance in Aristocrat Gaming more than offset headwinds in the Pixel United business, again highlighting the increasing diversification and resilience of our Group.
Coker also spoke about the company's expansion into real money gaming (RMG), which is expected to be a key growth driver in the future.
We have made further progress in our 'build and buy' strategy to scale in online RMG, with the launch of our new business, Anaxi. While we are focusing first on the North American i-Gaming vertical, we ultimately aim to be the leading gaming platform within the global online RMG industry. We will continue to invest behind this key adjacent growth opportunity as we build Anaxi over the medium-term.
Outlook
It could be the company's subdued outlook which is weighing on the Aristocrat share price today.
Management advised that it "expects to deliver NPATA growth over the full year to 30 September 2023, assuming no material change in economic and industry conditions."
While it expects the Aristocrat Gaming business to continue performing strongly, it warned that the Pixel United business is expected to deliver lower growth in bookings and profit compared to previous years.
The company will also be making further investments in Anaxi, to support its online RMG ambitions.
