Profit slashed at Aristocrat, outlook gloomy - The Australian - 28th August 2008

Slot machine maker Aristocrat Leisure rang in a fall of 43 per cent in first-half profit and said market conditions would not improve this year.

The $71.38 million in net profit announced today by Aristocrat was broadly in line with market expectations and the company's own forecast, which had been recently downgraded.

Credit Suisse had forecast $72.8 million, while Goldman Sachs JBWere tipped $70.1 million; Aristocrat (ASX: ALL) recently cut its expectations for net profit to about $70 million.

Aristocrat last month issued a profit warning, blaming the US economic decline, delays in new casino openings and the high Australian dollar for poor sales of its machines.

The manufacturer and distributor of gaming machines had also pointed to regulatory issues in its biggest markets, Australia and North America.

Chief executive Paul Oneile had said he would step down at the end of this year.

While Aristocrat said “market conditions in general are not expected to improve over the balance of the year”, it also said it was likely to benefit from introduction of its new Viridia Gen7 game and the launch of a key Japanese model later this year.

At the same time, Aristocrat said it would gain from continuation of improved pricing and tight cost control.

Revenue for the six months to June 30 fell 16 per cent to $473.9 million.

Aristocrat declared an interim dividend of 14 cents a share, unchanged from last year.