GGRAsia – Ainsworth Game profit slips 21 pct in fiscal 2016

Ainsworth Game profit slips 21 pct in fiscal 2016

Aug 24, 2016 Newsdesk Industry Talk, Latest News

Australia-based slot machine maker Ainsworth Game Technology Ltd reported profits down 21 percent year-on-year in the 12 months to June 30.

Such profit was AUD55.7 million (US$42.4 million) in the period, it said in a filing to the Australian Securities Exchange.

Earnings per share were down nearly 23 percent year-on-year on a fully diluted basis, at AUD0.17.

The company declared total dividends per share of AUD0.10 for financial year 2016; the same amount as in the previous year.

For the 2016 financial year, the firm said that revenue from international markets excluding the Americas – mainly Asia, New Zealand and Europe – contributed AUD18.2 million, an increase of 25 percent compared to 2015. Profit from those markets was 18 percent higher. Ainsworth Game noted that the increase in revenue from those places was “primarily attributable to sales growth within New Zealand” which increased revenue by 127 percent through a significant order for Skycity Auckland casino. The group also had international sales in South Africa.

The firm said in a presentation document for investors accompanying the financial year results, that it had a “good pipeline of further sales within Asia,” citing one client as Tiger Resort, Leisure and Entertainment Inc, the promoter of the Okada Manila casino resort in Manila, which is due to open before the end of 2016.

Ainsworth Game stated that revenues from Australian domestic markets were down 12 percent in the reporting period, to AUD81.5 million. It said a number of factors were responsible for that decline, including “a decline in business activity with large corporate customers, competitor activity as relates to product placements and some pricing pressure”.

But the company added, regarding the Australia market: “Notwithstanding these factors, consistent and high yielding performance from the broad range of established Ainsworth products ensured that the installed base still experienced moderate growth.”

Ainsworth Game did better in the Americas, which it said constituted 65 percent of revenues, or AUD185.8 million, in the reporting period, up from 55 percent – or AUD133.0 million – in the prior year.

“The group expects to achieve further increases in international revenue in financial year 2017 from the ongoing release of newly developed hardware and games, combined with the completion of the established operational bases in Las Vegas, Nevada and Florida,” said the firm in a Tuesday filing to Australian Securities Exchange.

Novomatic deal

Ainsworth Game’s group wide operating revenue was up 19 percent in the 2016 financial year, to nearly AUD285.5 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were down 11 percent, at AUD95.8 million.

“Excluding the effect of foreign exchange gains, the financial year 2016 results were solid,” said Danny Gladstone, Ainsworth Game’s chief executive, in a filing.

“I am pleased with the changes initiated within product development and the momentum of the group,” he added.

The firm said that 68 percent of segment profits for the reporting period came from the Americas.

Ainsworth Game stated in a filing on June 27 that its shareholders had that day approved the sale of 52.2 percent of company founder Len Ainsworth’s shares, to Austrian gaming firm Novomatic AG.

Commenting on that deal Mr Gladstone said: “We have made good progress to date in delivering the expected synergies with Novomatic and will continue this focus through financial year 2017”.

The firm added in a Tuesday filing: “The recent approval by shareholders of the sale of ordinary shares held by Mr L.H. Ainsworth, and entities controlled by him, to Novomatic is expected to provide significant revenue opportunities and synergies in coming periods and provide access to new research and development capabilities for the group’s global markets. Management has already started to examine opportunities to leverage Novomatic’s product library and extensive infrastructure.”