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HY20 Result: Is the Aristocrat Leisure (ASX:ALL) share price a buy?

Is the Aristocrat Leisure (ASX: ALL) share price a buy after reporting its FY20 half year result?

What is Aristocrat Leisure?

Founded in the 1950s, the original Aristocrat Leisure business is based around casino games. Aristocrat is one of the largest players in the world being licensed in approximately 300 gaming jurisdictions in over 90 countries. The company now also has online digital games – both casino versions and free-to-play social games.

Here’s what Aristocrat Leisure reported

Aristocrat Leisure reported that operating revenue rose by 7% to $2.25 billion in the six months to March 2020.

Normalised EBITDA (which excludes significant items) fell by 7.7% to $707.6 million and the EBITDA margin dropped from 36.4% a year ago to 31.4%.

Normalised net profit after tax (NPAT) dropped 14.2% to $305.9 million and  reported profit after tax rose 277.2% to $1.3 billion (including recognition of a $1 billion tax asset) compared to last year’s net profit of $346 million.

In terms of cash, operating cash flow rose 41.5% to $620 million and closing net debt to $2.25 billion. The net debt to EBITDA ratio improved by 0.2x to 1.4x.

Aristocrat Leisure dividend

The Aristocrat Leisure Board decided to cut the dividend to $0.

Aristocrat Leisure had $1.8 billion of liquidity and the Directors wanted to enhance the company’s liquidity and balance sheet even further.

Is the Aristocrat Leisure share price a buy?

Only time will tell how much damage COVID-19 will do to the company. At the pre-open share price, Aristocrat Leisure is still 27% lower than before. If life can go back to normal sooner rather than later then Aristocrat Leisure could be a decent buy at this cheaper price. But I’m not sure either way about that.

I’d much rather buy these technology shares for my portfolio:

Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

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