A strong Australian dollar and challenging conditions were said to have led to a forecast of flat full year trading from Aristocrat Leisure at the company’s AGM today in Sydney. Chairman David Simpson described the modest growth in 2007 as disappointing but said that the overall result demonstrated the underlying strength and sustainability of the business. He also commented that it was pleasing to note that Aristocrat was able to capture a significant share of new opportunities in emerging markets.

The stronger Australian dollar reduced reported earnings by A$18.4 million (7%). Net profit after tax and minorities of A$247.2 million represents a 3.4% improvement on the prior year. At like-for-like exchange rates earnings per share would have increased by 11.4%. Shares fell nearly 8% following the announcement but closed down 2.86%. First quarter 2008 profit was in line with the previous year although Aristocrat expects market conditions to affect the second quarter.

Chief executive Paul Oneile said, “While market conditions across much of our business are challenging and will impact short term results, the key fundamentals of our business model of pricing, cost leverage and cash flow remain very much intact.” New markets and casino expansion should counteract the effect of reduced replacement machine demand in the US.

The Chairman stated that Aristocrat is well placed to deliver sustainable shareholder value growth as global gaming markets open over time. Investment and research expenditure rose 9.5% in 2007 and the company remains focused on the future. Key projects include the new Viridian cabinet and Gen platforms, server based gaming initiatives, enhanced systems capabilities and products aimed at new and emerging markets. (E-04.29.08)

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