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Pokies down, video games up: Aristocrat’s COVID-19 double-edged sword

The mobile role-playing game RAID: Shadow Legends drove the growth, accounting for 23 per cent of “bookings” or revenue, along with the casino games Cashman Casino and Lightning Link.

“Stay at home orders have created an increase in content consumption, and I think you’ll see that through Netflix, Hulu and everyone else,” Mr Croker said.

There was an increase in users but the boost was mostly from existing customers spending more time playing Aristocrat’s games and making more in-game purchases, he said.

Aristocrat Leisure stood-down 1000 staff in early May until the end of June and has made 200 roles redundant to cut its costs during the COVID-19 downturn. But Mr Croker said he had not touched its design and development teams and would continue to “aggressively” invest in new digital and physical gaming products.

Aristocrat’s half-year revenue grew 7 per cent to $2.25 billion. However, the higher mix of lower-margin digital revenue meant net profit after tax and amortisation fell 13 per cent to $368 million.


Macquarie analysts David Fabris said this was 18 per cent below the market’s consensus forecast of $447 million, with the impact of COVID-19 on the Americas market sharper than expected. “[The] result was softer than expected, but near-term earnings forecasts will remain volatile,” he said.

Continued investment in design, development and marketing supported profit growth in the near-term however, Mr Fabris said.

Aristocrat chief financial officer Julie Cameron-Doe said the company had lowered its cash burn to about $50 million a month, and with available liquidity of $1.8 billion, it could “weather the downturn” even assuming there was no pick up in market activity.

Including the recognition of a $1 billion deferred tax asset, Aristocrat’s statutory profit after tax jumped from $346 million to $1.3 billion.

Aristocrat’s shares closed 5 per cent lower at $25.97. As previously announced, Aristocrat did not declare a half-year dividend (compared to a 22¢ interim payout last year) which it said would strengthen its liquidity and balance sheet during the pandemic downturn.

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