GGRAsia – Deleverage, steady dividend IGT’s focus: Wells Fargo

Deleverage, steady dividend IGT’s focus: Wells Fargo

Sep 14, 2015 Newsdesk Industry Talk, Latest News, Top of the deck

New York Stock Exchange-listed gaming equipment and services supplier IGT Plc is making deleveraging the company and paying a “steady” dividend its “top” priorities, said a note on Friday from Wells Fargo Securities LLC.

But analyst Cameron McKnight added: “Despite a resilient second quarter for IGT’s gaming equipment business, longer-term stability could be an ‘18- to 24-month’ journey.”

The note followed meetings with IGT’s management.

IGT Plc was created from the US$6.4-billion merger in April of Nevada-based slot machine maker International Game Technology and Italy-based lottery specialist GTech SpA.

The new entity incurred interest expenses of US$122 million in the second quarter, on increased debt to finance the merger. The creation of the new IGT has contributed to a group net debt of US$8.38 billion as of June 30, it said in its second quarter results, filed in August.

Mr McKnight said on Friday on the meetings with company executives: “We came away incrementally more positive on management and the company’s leadership.”

IGT saw its revenue grow in the second quarter but its income declined for the period.