Ainsworth fiscal 1H profit up despite slashed Oz sales
Profit at Australia-based slot machine maker Ainsworth Game Technology Ltd rose 25.8 percent year-on-year, on revenue that fell slightly and Australia sales that nearly halved, the firm said in its first-half fiscal results filed on Tuesday with the Australian Securities Exchange.
Such profit for the six-month period ending December 31 was AUD12.14 million (US$8.68 million), compared to AUD9.65 million for the prior-year period. Basic earnings per share rose 33.3 percent to AUD0.04, from AUD 0.03.
Group revenue for the period fell 1.9 percent to AUD118.0 million, from just under AUD120.32 million, while the cost of sales moderated year-on-year.
In Asia, gaming machine and parts sales and licence income generated AUD2.38-million of group revenue. The bulk of the group’s gaming machine revenue came from the Americas, representing AUD89.5 million, with the Australia market providing AUD19.7 million. The latter was a 46.9-percent decline in segmental revenue year-on-year.
Group earnings before interest, taxation, depreciation and amortisation (EBITDA) were AUD29.7 million, an increase of 20.7 percent on the AUD24.6 million achieved in the prior-year period. EBITDA margin increased to 25.2 percent in the half, up 480 basis points from the prior calendar period.
The firm’s chief executive Danny Gladstone – who will be leaving his post after June but staying within the group – said in commentary accompanying the first-half fiscal results that the firm would seek to “re-energise our disappointing domestic performance”.
Tough home market
Ainsworth Game said in its general discussion of the results: “The reduction in domestic revenue reflects the challenging domestic market and competitor factors, especially in New South Wales and Queensland. Further product releases are expected to provide increased opportunities within all domestic markets in the second half of financial year 2019.”
North America generated AUD53.8 million in revenue, an increase of 40.4 percent on the prior-year period. Unit sales increased by 38 percent to 1,342 units in the period.
Sales in what Ainsworth Game termed the ‘rest of the world’ segment – namely Europe, Asia and New Zealand – achieved AUD8.8 million in revenue, an increase on the AUD8.3 million in the prior corresponding period. While Asia and Europe saw improvement, New Zealand suffered a decline in revenue “due to a decline in distributor sales”.
Profit for the rest of the world segment was down by 3.8 percent year-on-year in the reporting period, to AUD5.0 million. Unit volumes rose by 16 percent to 409.
Sales growth in North America and in the rest of the world had been driven by “demand from Novomatic,” said Ainsworth Game, referring to Austria-based Novomatic AG. The latter has been Ainsworth Game’s majority owner since January last year, and its strategic partner in sales and technology with a view to building – by playing on the respective strengths of the two brands – market share in key jurisdictions.
Latin America delivered revenue of AUD35.7 million in first-half fiscal, a decrease of 2.5 percent on the previous corresponding period. Unit sales of 1,391 were down by 10 percent in the period.
CEO Mr Gladstone noted regarding the remainder of the financial year: “We expect an improved profit performance in second-half fiscal 2019 compared to the first-half fiscal 2019 with continuing international momentum and the release of the new products expected to translate to improved financial results”.
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