Strength in U.S. boosts Australian game maker

Thursday, Aug. 25, 2005 | 11:15 a.m.

Australian gaming equipment manufacturer Aristocrat Leisure Ltd. reported record first-half revenues and earnings today, thanks primarily to a strong performance in the United States that offset those in weaker markets in Australia and Japan.

Aristocrat, which capitalized on the popularity of penny slots in the United States and operates the Millioniser progressive jackpot games that offer a $1 million prize in a low-denomination environment, reported first-half earnings of $101.7 million in Australian dollars, 10 cents a share, on revenue of $525.3 million. That compares with earnings of $62.9 million, 4 cents a share, on revenue of $523.4 million for the same period a year ago.

The company, traded on the Australian Stock Exchange, is only required to report earnings twice a year.

"North America has been the standout performer of the last six months," said Paul Oneile, chief executive of Aristocrat, in a conference call that occurred Wednesday night in the United States.

Oneile said delivery delays and a slow-down in regulatory approval of games in the United States kept the North American results from being even stronger.

The company generated 47 percent of its revenue in North America for the first half of 2005, compared with 29 percent a year ago.

Oneile said a number of government restrictions in Australia resulted in reduced demand for the period. Tax increases, casino smoking restrictions and the removal of some 2,000 slot machines from casinos in South Australia and the imposition of new responsible gaming measures in New South Wales had a negative impact on the company's results.