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#Results FY22
Added 3 months ago

Results released today.

Aristocrat must be amongst the cheapest growth stock which is a proven performer amd market leader. It has once again shown is strength and dominance with the latest result. Admittedly it may always trade at a discounted multiple due to some of the markets ethical considerations, but Im not one of those people and feel this gives me an easy opportunity.

20% constant currency NPAT growth achieved. 25% EPS growth.

The company's strong position and healthy balance sheet weathered through covid period and come out the other side even stronger.

Its poker machine business is a cash generating more mature part of the business, which the company can use to invest in the more exciting growth divisions online.

Happy holder.

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#Broker View
stale
Added 10 months ago

CITI - Buy PT $44

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#Bull Case
stale
Last edited one year ago

$5 Billion investment in RMG. Real Money Gaming. Morals. Prejudices aside. It's $ interesting. Especially post/present covid

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#ASX Announcements
stale
Added one year ago

Statutory Results

Revenue from ordinary activities up 14.4% to 4,736.6

Profit from ordinary activities before tax up 160.3% to 935.9 down 40.5% to 820.0

Normalised results

Operating revenue up 14.4% to 4,736.6

Profit before tax up 113.7% to 1,016.8

Profit after tax and before amortisation of acquired intangibles up 81.4% to 864.7

KEY HIGHLIGHTS

Established growth strategy and sustained investment in outstanding product, people and capability delivered greater diversification, resilience and profitable growth in FY21

Strong operating cash flow and a robust balance sheet provides flexibility and optionality to accelerate growth plans through organic investments and strategic M&A in FY22

81% growth in normalised NPATA to $865 million in FY21 (up 102% in constant currency) delivers performance close to 2019 levels with a stronger, more diverse and resilient business

Strong recovery and performance in Gaming driven by market-leading products and portfolio, and above-category growth in Pixel United1 , Aristocrat’s mobile games publishing business (formerly Digital) driven by strong portfolio performance and player engagement.

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4533d32ql9ykyq.pdf (asx.com.au)

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#Broker Views
stale
Added one year ago

CREDIT SUISSE - Outperform PT $50.30

ORD MINNETT - Accumulate PT $51

MACQUARIE - Upgrade to Outperform from Neutral PT $52.75

MORGANS - Add PT $52.90

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#ASX Announcements
stale
Added one year ago

Recommended cash offer for Playtech plc, launch of a A$1.3 billion Entitlement Offer and Trading Update

Sydney, 18 October 2021

• Aristocrat makes recommended cash offer to acquire Playtech, a leading global online gambling software and content supplier for A$5.0 billion (enterprise value)

• Acquisition will accelerate Aristocrat’s growth strategy over the medium term, and deliver sustainable shareholder value

• EPSA accretive in first full year of ownership

• Playtech Board is unanimously recommending shareholders vote in favour

• To be funded with existing cash, new debt and a A$1.3 billion entitlement offer

• Aristocrat expects 2021 full fiscal year NPATA of A$864 millio

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Valuation of $35.88
stale
Added 2 years ago
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Valuation of $34.00
stale
Added 2 years ago
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#SUMMARY
stale
Added 3 years ago

29/07/20 A very rough analysis

Positives:

  • Global player in gaming machines, online gaming operating in over 90 countries. Second largest gambling manufacturer globally.
  • Proven company; with sales, cash flow and EPS compounding above 20% for last 10 years.
  • Digital segment growing, currently accounting for ~46% of total revenue from last 1H20 report.
  • Net margin above 15% past 5 years
  • ROIC > 10% past 5 years
  • CEO Trevor Croker owns about $AUD9.5m worth of shares. Considering his annual salary is $1.6m (excl ST/LTI), this is respectable
  • $871m in cash
  • Pays a small fully franked dividend ~ 2% though 1H20 dividend was suspended.
  • No recent director selling

Negatives:

  • High debt levels - $2.7b+, acquired Plarium and Big Fish in 17/18. Net debt/equity currently at 1.3x, interest cover ~ 8.
  • COVID19 - impact on 2H20 earnings. Interesting to note most casinos have reopened in the US. https://www.americangaming.org/research/covid-19-casino-tracker/ 
  • Washington lawsuit from 2019 - approx $30m settlement cost if approved.
  • Withdrawal of government handouts could impact on discretionary spending
  • Regulatory changes as expected in this space

Comment:

All in all, I like ALL (pardon the pun). Historically ALL has had big pullbacks in its share price, but over the long term it has very much outperformed the market. COVID19 may be a blessing in disguise, bringing forward plans to expand the digital segment of the business. Short term pain, long term gain. I back the management to ride out the COVID19 impact. However the active risks need to be monitored closely as per outlined above. 

At the current price, it is looking a little too expensive. Happy to add below ~$22.

Disc: [I hold ALL shares]

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Valuation of $17.60
stale
Added 3 years ago
Rough calculation, based on FY19 earnings. Looking 5 years ahead, FY20 will be a write-off -FY19 EPS $1.18 x compounding rate 30% p/a =FY24 EPS $4.38 $4.38 x no.shares outstanding 638.5m = MC FY24 $27.9b Applying 20% MOS d/c rate back 5 years = MCFY19 $11.2b Fair value = $17.60 Probably a fair entry point with a decent MOS baked in.
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Valuation of $34.56
stale
Added 4 years ago
PE of 24x FY19 EPS of ~$1.44. FY19 used given fuller contribution from recent acquisitions. Also results in a PEG of ~1.2x which has been a rough average for ALL in recent years. Undemanding for a large cap stock with sustainable mid-term growth above market.
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