GGRAsia – Americas up, 1H profit to shrink at slot firm Ainsworth

Americas up, 1H profit to shrink at slot firm Ainsworth

Nov 23, 2018 Newsdesk Latest News, Top of the deck

Ainsworth Game Technology Ltd forecasts that its profit before tax in its financial first half will fall to AUD8 million (US$5.8 million) from AUD11 million a year earlier.

Nonetheless the Australian maker of slot machines told the Australian Securities Exchange that it expects its first-half revenue and profit before tax in the North American and Latin American markets to grow.

Ainsworth Game did not give specific information on its first-half financial performance in Asia. The group’s majority owner, Austria’s Novomatic AG, has said it thinks the combination of the two firms’ technology can help the duo expand overall market share in Asia for slot machines and other electronic games.

Ainsworth Game’s latest statement to the Australian bourse quotes Ainsworth Game’s chief executive Danny Gladstone as saying: “While Ainsworth Game Technology continues to make progress in driving growth in the key Americas markets, our performance in the highly-challenging domestic markets is adversely impacting our overall results.”

The CEO’s statement added: “With our investments in technology and increased research and development, and the release of newly-developed gaming products, we expect to deliver improved results in both domestic and international markets in the second half of the year.”

The Australian manufacturer told the exchange that it expected deliveries of slot machines into North America to improve.

“Progress is being made in Class III markets, and new jurisdictions,” the firm said, referring to a regulatory category of slot machine most commonly found in North American commercial rather than tribal casinos.

“Ainsworth Game Technology’s proprietary Historical Horse Racing (HHR) system is performing well in Churchill Downs Inc’s newly opened Derby City Gaming facility in Kentucky,” the company added. “The company sees further sales opportunities for the HHR system, with regulatory approvals having been granted in new markets such as Nebraska and Virginia.”

Ainsworth Game said that in Latin America it had benefitted from investments made in product design and game performance to maintain market positions. “The company expects to report an improved margin performance, driven by a higher-quality sales mix,” it said.

In contrast, Ainsworth Game forecast that its revenue and profit before tax in Australia would be smaller in its financial first half than a year earlier.

“The previously-noted highly competitive conditions in the Australian market are continuing,” the company said. “Overall industry demand has fallen by around 10 percent. Furthermore, timing issues around the approval of new, more complex products, and the strategic decision to defer product launches into the second half of financial year 2019 to maximise market impact and total returns have affected short-term financial results.”