Slot maker Ainsworth CEO gives 2H fiscal profit warning
Australia-based slot machine maker Ainsworth Game Technology Ltd has warned that its second-half fiscal profit before tax, excluding currency movements, is likely to be under half what it had predicted earlier in the year, and therefore also to be a contraction judged year-on-year.
It now expects such profit to be “around” AUD20 million (US$15.1 million) compared to the AUD42.2 million it mentioned in guidance to the Australian Securities Exchange in late February.
A company filing on Friday said that domestic sales prospects for second half fiscal 2018 had been “adversely affected by a range of factors, including competitive activity, regulatory approval delays in product submissions and further product development changes which have deferred the approval and release of previously scheduled key game titles until first half financial year 2019”.
Ainsworth Game flagged that in Latin America, second hand units had been a larger component of sales, having the effect of lowering the group’s gross margins for second half fiscal 2018.
“We are clearly very disappointed by the rebasing of our profit expectations,” said Danny Gladstone (pictured), the firm’s chief executive, in commentary contained in Friday’s trading update.
He added: “We operate in competitive markets and our execution this time has not met the high standards our shareholders correctly deserve. We are moving decisively to improve our profit outlook and are continuing to progress new product developments and marketing initiatives, which we confidently expect to improve our performance in fiscal year 2019”.
In late February, Ainsworth Game reported first half fiscal net profit after tax of AUD9.7 million, a fall of 52.9 percent compared to AUD20.6 million in the prior-year period. Profit before tax, excluding currency movements, had been AUD16.2 million.
In January Austrian gaming equipment supplier Novomatic Group completed the acquisition of a 52-percent stake in Ainsworth Game.
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