GGRAsia – Ainsworth profit slips 38 pct in fiscal first half

Ainsworth profit slips 38 pct in fiscal first half

Feb 21, 2017 Newsdesk Latest News, Top of the deck, World

Australia-based slot machine supplier Ainsworth Game Technology Ltd on Tuesday reported net profit after tax of AUD20.6 million (US$15.8 million) from operations in the first half of its financial year 2017. That was down 37.8 percent compared to AUD33.1 million in the prior-year period, the company said in a filing to the Australian Securities Exchange.

Earnings per share were down 40 percent year-on-year on a fully diluted basis, at AUD0.06.

The company reported total revenue of AUD122.7 million for the six months to December 31, down 14 percent from a year earlier. International markets accounted for 67 percent of the aggregate revenue for the period, noted Ainsworth Game.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) were AUD31.9 million, a decline of nearly 41 percent in year-on-year terms. Total operating costs rose by 18 percent year-on-year to AUD58.4 million, due in particular to a 33-percent increase in research and development expenses, said the firm.

The firm said in a presentation document for investors accompanying the financial half year results that it experienced a “temporary decrease” in revenue from the international markets due to “timing delay in approval of cabinets and game software”. Ainsworth Game additionally said that it continues to face a “challenging period for domestic operations”.

The company said it had suspended the payment of an interim dividend in order to “fund growth investments in sales, marketing and research and development”.

That effort, combined with the “synergies” from its tie-up with Austrian gaming equipment maker Novomatic AG, are likely to contribute to a better profit performance for Ainsworth Game in the second half of financial year 2017, the firm noted on Tuesday.

Excluding foreign exchange rate movements, Ainsworth Game said it expected full-year profit “to be at least AUD56 million”.

Ainsworth Game said it expected to deliver on the synergies with Novomatic “beginning in the second half of financial year 2017”. The Australian firm said in a filing in June last year that its shareholders had approved the sale of 52.2 percent of company founder Len Ainsworth’s shares to Novomatic.

In Tuesday’s filing, Ainsworth Game said the regulatory approval process is still ongoing, with the deal expected to be completed “in September 2017 quarter”.