Aristocrat has reported double-digit revenue and EBITDA growth for 2022 amid a warning that next year’s results might be impacted by lower profit from Pixel United and further investment in real-money gaming brand Anaxi.
Aristocrat’s share price fell by more than 5% on Wednesday (16 November).
For the financial year ended 30 September 2022, Aristocrat posted an EBITDA increase of nearly 20% to A$1.85bn and a 13.9% rise in net profit after tax to A$1.05bn.
The results were underpinned by a 17.7% increase in group revenue to A$5.6bn, with the company pointing to an “exceptional performance” in its North American gaming operations and in outright global sales in spite of “supply chain issues and mixed operating conditions across its key markets”.
Aristocrat Gaming contributed 54%, or nearly A$3bn, to the total revenue, while social gaming platform Pixel United generated 46%.
However, Pixel United, which reports in US dollars, saw revenue decline marginally by 0.6% to $1.8bn (A$2.67bn) in 2022 compared to 2021.
Aristocrat Gaming’s Americas revenue accounted for $1.7bn (A$2.52bn), a nearly 25% increase on 2021. Revenue in Australia and New Zealand increased by 15.5% to A$461.7m.
In 2022, Aristocrat moved to cease operating its mobile games in Russia after it invaded Ukraine. This market had historically contributed about 3% of Pixel United bookings.
As a result, normalised profit after tax increased 27% year-on-year to A$1.1bn.
Aristocrat CEO Trevor Croker: “While we are focusing first on the North American iGaming 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.”
Aristocrat CEO and managing director Trevor Croker 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,” he added.
Croker further highlighted that the company made further progress in its ‘build and buy’ strategy to scale in online real money gaming (RMG), with the launch of its new business, Anaxi.
“While we are focusing first on the North American iGaming 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,” Croker said.
Looking ahead, the company said it expects the Aristocrat Gaming business to continue performing strongly. Aristocrat also said it planned further investments in Anaxi.
However, the company warned the Pixel United business is expected to deliver lower growth in bookings and profit in 2023 compared to previous years, which could have affected investor confidence and sent the stock down 5%.
Aristocrat is set to establish a third business division dedicated to entering the online real-money gambling (RMG) space alongside its existing core business units.
After the collapse of its attempted acquisition of industry giant Playtech, Aristocrat appears to be exploring alternative ways of entering the RMG space in order to diversify its product offering.
At the supplier’s AGM yesterday (24 February), CEO Trevor Croker announced that a newly established RMG-focused business unit would be led by current Aristocrat Gaming chief Mitchell Bowen, and supported by a dedicated leadership team formed of several internal and external appointments.
Aristocrat has been developing its online RMG capabilities in-house throughout 2021, Croker said, and will now accelerate a ‘build and buy’ approach to scaling in the sector.
The strategy will see the business invest in building out its own online RMG platform infrastructure, while undertaking select M&A, partnerships and talent acquisitions to accelerate progress where appropriate.
Building a scaled position in the sector will be a medium-term effort, Croker said, built upon sustained investment over a number of years.
He added that Aristocrat has a track record of successfully scaling businesses and derives clear advantages from its product portfolio and cash balance.
As Bowen moves to become CEO of the new division, he will be replaced as CEO of Aristocrat Gaming by Hector Fernandez, who joined the business in 2018 before taking on the role of president in 2019.
“Throughout his time at Aristocrat, Hector has championed fresh thinking and high performance and worked with a talented team to solidify our Americas business as the market pace-setter, and the supplier of choice,” commented Croker.
“A seamless leadership transition is well underway, and will be supported by additional internal appointments and promotions that further underline the depth of talent we’re delighted to have at Aristocrat.”
More detail on the establishment of its new business division, including strategy and key priorities, will be made available alongside Aristocrat’s half-year 2022 results in May.
Besides its announcement regarding the new division, Aristocrat also gave its broader financial outlook for 2022 at the AGM.
It unveiled plans for continued expansion over the full year to 30 September 2022, with investment in design and development helping to drive sustained, long-term growth. Investment in this area is likely to be “modestly above” its historic range of 11-12% of revenue, it said.
Croker added: “We have entered the 2022 fiscal year with momentum and a balance sheet that continues to provide full strategic optionality. Our people are excited to accelerate our strategy and transformation in the period ahead.”