Fiscal-year profit at Australian slot machine maker Ainsworth Game Technology Ltd fell 65.9 percent year-on-year to nearly AUD10.9 million (US$7.4 million), on revenue that declined 11.8 percent for the period, to approximately AUD234.3 million.
Pre-tax profit for the 12 months ended June 30 was down 65.2 percent, to about AUD14.7 million, the firm said on Tuesday in a filing to the Australian Securities Exchange.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) were AUD44.8 million, 34.1 percent less than in the prior year. Underlying EBITDA – adjusting for currency impacts and other significant items – fell by 36.4 percent year-on-year to AUD43.0 million.
The Ainsworth board decided to suspend the firm’s interim and final dividends. It said it was “evaluating” its research and development (R&D) investments and growth opportunities, and that the suspension of the dividends would also “support the improvement in the company’s financial position”.
Ainsworth chief executive Lawrence Levy said in a statement included in the earnings filing: “While the fiscal-year 2019 results are relatively weak, Ainsworth is capable of delivering improved performance. We have a professional and motivated workforce, an excellent industry reputation and a well-established footprint across all our markets.”
He added: “We have initiated a review to re-evaluate and focus our R&D investments to develop successful new… products to drive long-term growth.”
Mr Levy took on the role of Ainsworth CEO on July 1. He was until recently vice president global sales at Austria-based Novomatic AG. The latter company has been Ainsworth’s majority owner since January last year, and its strategic partner in sales and technology.
Ainsworth’s CEO was quoted in Tuesday’s filing as saying that the company has a “strong footprint in major markets, scale, and growing recurring revenues”.
“With an increased focus on investing in game technology and new product development, I expect our domestic performance to progressively improve and our international success to continue,” added Mr Levy.
Tuesday’s filing showed that the decline in sales was due mainly to a weak performance in Australia. Revenue in the Australian market fell by 43.2 percent year-on-year to AUD36.1 million, said the firm.
Revenue from international markets were flat in year-on-year terms, at nearly AUD198.2 million. They accounted for about 85 percent of the group total sales in the fiscal year. But most of that revenue was in the Americas, up 1.2 percent year-on-year, to AUD186.7 million.
In its ‘rest of the world’ sales segment, the slot machine maker recorded revenue of AUD11.5 million, down 34.7 percent from the prior year. Ainsworth said segment revenue declined “due to the reduced contribution from Novomatic compared to the previous corresponding period and challenging market conditions in New Zealand and Asia”.
In the filing, Ainsworth said it had signed new agreements with additional third-party game development studios located in Australia and in the United States “to further diversify the group’s game content and complement the innovation capabilities of the group’s internal studios”.
The slot-machine maker said also that it had “started to secure key regulatory approvals” for a new electronic gaming machine software platform “that will power the group’s future range of games”.
It stated: “This software platform provides a more ‘off-the-shelf’ development environment that allows the group to deliver a broader and more complex range of gaming content as well as to benefit from the efficiencies provided by modern software development methodologies and tools.”
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”The board believes that the Japan IR project presents a unique opportunity for the company to enhance its growth profile”