Lawrence Levy, chief executive of Australian slot machine maker Ainsworth Game Technology Ltd, says he is confident the company can “deliver solid results over time” due to an “increased focus on investing in game technology and new product development”.
His comments were made in an address to shareholders at the firm’s annual general meeting on Tuesday, according to a filing to the Australian Securities Exchange.
“The fiscal-year 2019 results were not as strong as we would have liked to report. While we compete in challenging markets against strong competition, these results do not reflect Ainsworth’s earnings potential,” said Mr Levy. “We have the capacity and the capability to deliver better results in the future.”
Ainsworth had announced in August that fiscal-year 2019 profit had fallen 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.
Revenue from the Asia market segment fell by 22.4 percent year-on-year to about AUD2.5 million in the 12-month period to June 30. Revenue in the Australian market fell by 43.2 percent year-on-year to AUD36.1 million, said the firm.
In his address, Mr Levy said that Ainsworth’s performance in Australia continued to be “adversely impacted by product performance and competitive pressures”.
“We are undergoing a significant product transition to re-energise our performance in the domestic markets,” said the CEO. “We expect these products to re-energise our Australian performance over time and make a larger contribution to fiscal-year 2021.”
Mr Levy said additionally that following the resignation in October of Kieran Power, chief technology officer, and Joseph Bertolone, president for North America, the company has “flattened” its management structure “to accelerate creativity, information flow and decision making”.
The executive stated that Ainsworth would also “look to leverage external experts and third-party game designers” to develop new content.
“We are also empowering a new internal creative team to focus on new game concepts based on a deep understanding of customer requirements,” he said. “We look forward to our new games making a meaningful contribution to our financial results in fiscal-year 2021.”
Mr Levy said also that Ainsworth would access the “significant expertise” of Austrian gaming technology supplier Novomatic AG “to identify and deliver additional synergy benefits from this strategic partnership”. Novomatic took a controlling stake of 52 percent in Ainsworth last year.
“While Ainsworth is well represented in many markets, our sales coverage is not complete. We have identified opportunities for sales in markets where Ainsworth does not currently operate. Novomatic has a strong presence in many of these markets and we can leverage their significant distribution capability to build additional revenues,” said Mr Levy.
He added: “As we invest in product development and transition to new game concepts, our results for fiscal-year 2020 are expected to be subdued.”
The CEO said that based on unaudited results, the company expected to report a loss before tax – excluding currency impacts – of approximately AUD4 million in its fiscal first half 2020.
On Tuesday, the company confirmed that Danny Gladstone, a current non-executive director and previous chief executive, was to be appointed as chairman following the meeting. Graeme Campbell, the firm’s non-executive chairman, will assume the role of lead independent director.
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