Following last week’s AGM, when Aristocrat Leisure said that the strong Australian dollar and challenging conditions meant that it was forecasting a flat full-year trading, more details have been given at a conference hosted by Macquarie Bank. Aristocrat CEO and MD Paul Oneile commented that customers were not renewing gaming machines as before, keeping them three times longer than in the past. He added that sales to the US, Aristocrat’s largest market, were likely to be 20% lower than expected, and blamed the economic decline.

According to Oneile, US clients were waiting around 16 years to upgrade gaming machines instead of 5-7 years. Replacement orders in Australia have been similarly affected. There was a further warning about the Macau market where too many gaming machines had been ordered, leading to a stockpile in warehouses. So far visitor numbers have not increased sufficiently for more machines to be installed, although future growth is expected to clear the backlog in due course.

In 2007 Aristocrat grew its emerging markets to 22% of revenue, up from 15% in 2006. Australia/New Zealand and Japan also saw growth but North America, while remaining the largest market for Aristocrat, accounted for 43% of company revenue, down from 52% the previous year. Last year unit sales were down 11.6% in Australia, 7.1% in New Zealand, and 22.6% in North America. In Japan unit sales more than doubled in 2007. This year Aristocrat is aiming for a 40% share of new markets. (E-05.08.08)

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