GGRAsia – Ainsworth’s annual profit dips despite better 2H

Ainsworth’s annual profit dips despite better 2H

Aug 29, 2018 Newsdesk Latest News, Top of the deck, World

Fiscal-year profit at Australian slot machine maker Ainsworth Game Technology Ltd fell 15.8 percent year-on-year to AUD31.9 million (US$23.3 million), on revenue that declined 5.8 percent for the period, to nearly AUD265.6 million.

Pre-tax profit was down 9.8 percent, to about AUD42.3 million, the firm said on Wednesday in a filing to the Australian Securities Exchange.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) were AUD68.0 million, a decline of 3.3 percent in year-on-year terms. Underlying EBITDA – adjusting for currency impacts and other significant items – fell by 19.6 percent on year to AUD67.6 million.

The company said sales were higher in the second half of the year at AUD145.3 million, compared to AUD120.3 million in the first half. The firm sold a total of 9,714 units during the reporting period, down 9 percent from the previous fiscal year.

Revenue from international markets declined by 3 percent year-on-year for the full fiscal year, to nearly AUD202 million. International sales however accounted for 76 percent of the group total sales in the period. Revenue in the Australian market fell by 14 percent year-on-year, said the firm.

In its ‘rest of the world’ sales segment, the slot machine maker recorded revenue of AUD17.6 million, down 37 percent year-on-year, and profit of AUD10.4 million, a decrease of 31 percent.

Ainsworth Game said segment revenue declined “due to lower Asia, New Zealand and Europe sales” for the period. The segment’s profit included a one-off impairment loss recognised for an Asian trade receivable in the amount of AUD0.9 million, said the company.

In Wednesday’s filing, Ainsworth Game said that when measured before accounting for the effects of currency movements, profit before tax was AUD39.2 million, “slightly ahead of the upgraded guidance provided” in July.

“We are pleased to deliver fiscal-year 2018 results slightly ahead of our upgraded guidance,” said Ainsworth Games’s chief executive Danny Gladstone, in a prepared statement.

“Our performance continues to show signs of improvement and is a direct result of the strategies implemented to expand our international footprint, invest in technology to enhance our product suite, and build our participation fleet to improve the quality of our earnings,” he added.

The firm’s board declared a final dividend of AUD0.025 per share, fully franked. This made a total dividend of AUD0.04 per share for the year, totalling AUD13.3 million and representing a payout ratio of 42 percent.

Mr Gladstone said that while Ainsworth Game recognised “the intense competition” it faced across the markets where it operates, the company was “confident [it] can outperform” in the sector.

“We will continue to judiciously invest our cash flow in product improvements and innovation, and sales and marketing while retiring debt and rewarding shareholders,” said Ainsworth Game’s CEO. “In fiscal year 2019 we expect to release a new suite of products which should assist in translating to improved financial results.”