Aristocrat Leisure Limited

From IntFX

See also: ALL for realtime information.

Aristocrat is an entertainment company which provides a broad range of gaming solutions to entertainment industry across the world. The Company’s diverse product offering include electronic gaming machines, and complete gaming solutions including systems, services, electronic tables and ancillary equipment. Aristocrat holds over 200 gaming licences and offers its products and services in over 90 countries.

The Company focuses excessively on technology, and continuous research and development to introduce new and innovative products into the market. Its research and development expenditure increased 45% to A$95 million in 2006. Aristocrat employed approximately 2,282 people as of December 31, 2006. The Company is listed on the Australian Stock Exchange under the ticker ALL.

[edit] History

Aristocrat launched its first gaming machine under its brand in 1953 and since then has grown internally as well as through acquisitions.

Aristocrat has recently made several acquisitions with the objective of broadening its product offering, adding new technologies and extending geographic presence. During 2006, the Company invested approximately $153 million in three acquisitions - ACE Interactive (develops, manufactures and markets interactive systems and video terminal hardware and software); 50% stake in Elektroncek (manufacturer of electro-mechanical gaming machines; and 20% stake in PokerTek (owns a market leading electronic table poker product, PokerProTM).

[edit] Strategy

The Company plans to focus on its core competency in video slots, gaming content and systems. Aristocrat also plans to leverage distribution network which now extends to over 200 jurisdictions and broaden its product range.

[edit] Financial and operational performance

Aristocrat reported a 17.1% decline in operating revenues to A$1074.5 million in 2006 from A$1296.3 million in 2005. The Company’s EBITDA and net earnings also declined 7.9% and 2.2% to A$366.7 million and A$239.0 million, respectively. However, the Company’s profit margins have improved over the same period. Aristocrat’s EBITDA margin increased to 34.1% in 2006 from 30.7% in 2005. Its net profit margin increased to 22.2% in 2006 from 18.8% in 2005.

The Company reports its performance through geographic segments. North America accounts for the majority of the Company’s revenues with 47.8% share in 2006 followed by Australia with 31.9% share of revenues.