ALL - Another of my 2018 year share tips crashing!
The Aristocrat Leisure Limited
(ASX:ALL) share price hit a seven-month low as shareholders continue to abandon the stock following its disappointing profit result announced yesterday.
The Aristocrat share price tumbled 7.0% to $23.66 at close – making it the second-worst performer on the S&P/ASX 200 (Index:^AXJO) (ASX: XJO) index.
The market was expecting better results
MF reported
In FY 2018 Aristocrat Leisure delivered a 47.7% increase in normalised operating revenue to $3,624.1 million and a 34.3% lift in normalised net profit after tax and before amortisation of acquired intangibles (NPATA) to $729.6 million.
Although this was impressive year on year growth, it was a touch lower than market expectations. According to a note out of Goldman Sachs, its analysts were expecting a full year net profit of $750 million and the Bloomberg consensus median estimate stood at $759 million.
Management advised that this result reflected the “strong performance delivered across the Group’s global portfolio, including profit growth of 16% in the Americas land-based business (to US$650m), a 9% lift in profit in the market-leading ANZ business (to $207m) and transformational profit growth of over 170% (to US$331m) in the Digital business, with sustained organic growth supported by acquisitions.”
Profits didn’t grow quite as quickly as its top line this year due to the company experiencing a higher contribution from lower margin Digital social casual games and continued reinvestment in the business through its higher design and development spend.
Regardless of this, the company is still generating significant cash flows. Management advised that normalised for acquisition related significant items, its operating cash flow increased over 23% to $988 million.
ASX Announcement
ALL 29/11/2018 8:41:02 AM FY2018 Results Media Release