Delay in approval of cabinets and game software chipped away the net profit of Australia-based slot machine supplier Ainsworth Game Technology Ltd by as much as 37.8 percent.
In a filing with the Australian Securities Exchange, Ainsworth’s net profit from operations in the first half of its financial year 2017 was at AUD$20.6 million (US$15.8 million), down from AUD$33.1 ($25.36 million) a year earlier.
On the other hand, Ainsworth’s total revenue tumbled by 14 percent to AUD$122.7 million ($94.02 million) for the six months to December 31, 2016.
The pokie developer attributed the dismal net profit to tough competition and delay in the approval of cabinets and gaming software.
“Although these results are in line with our announcement last October, the reduction in profit is disappointing,” Ainsworth chief executive Danny Gladstone said. “Our results were impacted by competitive domestic markets and temporary delays in North American approvals.”
Gladstone, however, assured investors that it is taking steps to stanch the losses that it incurred.
“We have implemented strategies to correct these initial reductions in unit volumes and margins and expect to deliver an improved financial performance going forward,” he said.
The company reported that it has suspended the payment of an interim dividend in order to “fund growth investments in sales, marketing and research and development.”
Ainsworth said it expects a strong recovery in profit in the second half of the year. The company will be banking on the strong growth in North America, partly helped by the group’s new headquarters in Las Vegas and its acquisition in January 2016 of Novamatic AG, a supplier of Class II poker machines.
Ainsworth announced 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.”
Still, Ainsworth estimates that its full-year, pre-tax profit, excluding currency movements, at AUD$56 million ($42.91 million), which is lower than the prior year.