Halt in Aristocrat trading cranks up rumour mill

Aristocrat, the world's second biggest poker machine manufacturer, issued a brief statement to the Australian Stock Exchange yesterday morning requesting a trading halt ahead of an announcement today.

Shares in Aristocrat closed at $4.22 on Wednesday, their lowest level in more than two years. Since January 3 the shares have fallen 60c.

With less than two weeks until the company reports its results for the six months to December 31, a number of market observers said a profit downgrade was the most likely reason for the trading halt.

``Ninety per cent of people believe it is a profit warning. Ten per cent of people believe it is corporate action. In this sort of [jittery] environment the market believes it must be a profit warning," the analyst said.

But not everyone in the broking community was convinced earnings were to blame. ``For them to suspend the stock there is a range of other things it could be. [A profit downgrade] would not be a particularly logical conclusion. Why would they be waiting overnight? It doesn't make sense," said another analyst.

Possible reasons for a profit downgrade included weakness in either the company's US operations or December poker machine sales figures.

``December is a big month for sales ... they wouldn't know until now how they have gone in terms of sales ... the market is suggesting they have worked out how they have gone," a dealer said.

Another dealer said US gaming machine maker WMS Industries was rumoured to be planning to launch a takeover for Aristocrat. However, the dealer said this was unlikely given that Aristocrat's market capitalisation was more than twice the size of WMS.