Aristocrat Leisure has increased its profit guidance after a strong start to the financial year with its new chief flagging merger and acquisitions to drive growth.
The Australian-listed company revealed yesterday it had delivered a strong performance over the first four months of the year, which had led to a fiscal 2017 profit forecast of 20-30 per cent above last year’s result. Shares in the company bounced on the news, closing more than 5 per cent higher at $16.68.
Chairman Ian Blackburne told shareholders at yesterday’s annual meeting that Aristocrat’s financial performance over the year was “outstanding” and had further extended the business’s trajectory of consistent and high-quality growth.
The company also confirmed that the necessary regulatory pre-approvals for the appointment of Trevor Croker as chief executive had been received.
Aristocrat had previously announced that Jamie Odell would vacate the role on February 28, but he has agreed to a 12-month consultancy arrangement to support a smooth change at the top of the gaming machine manufacturer. The company revealed yesterday that Mr Odell would be paid $250,000 for the 12 months.
Mr Odell, in his final address to shareholders yesterday, said Aristocrat had delivered a significant acceleration in its performance in fiscal 2016.
“This was achieved despite another period of generally flat markets and intense competitive pressure,” he said. “A relentless focus on industry leading talent, game content, hardware and technology, coupled with further improvements in in-market execution drove exceptional operational performance across our core markets and segments.”
Mr Croker said the company was focused on ensuring it protected and leveraged its core operations, while pursuing new growth opportunities.
“Clearly, organic opportunities may be accelerated and augmented by well-executed M&A,” he said.
“We have the balance sheet strength and also a robust, growing recurring revenue base, which continues to give us full optionality in this regard. We are proactive in uncovering and assessing potential opportunities in line with our rigorous acquisition criteria and will continue to be led by the interests of shareholders.”
Mr Croker also outlined his vision for the business, telling shareholders he was focused on building on the company’s foundations rather than introducing change for change’s sake. “I believe Aristocrat must evolve our focus to fully leveraging our momentum and transforming our business over time,” he said.
“It’s non-negotiable that we must protect our core business throughout. We must also aggressively pursue value-adding opportunities, including in adjacent segments and markets, through a structured approach to growth that encompasses organic opportunities and M&A.”