Things seem to be getting better rapidly for Ainsworth Game Technology (AGT). After striking a sizeable deal with Churchill Downs in the United States, it adjusted its revenue forecast up a few notches, increasing its expected revenue from US$14.7 million to US$26.5 million for the second half of the year. Now, the Australian company is at it again, saying that its revenue for this last fiscal year was better than previously anticipated. It also expects the second-half earnings to increase even more than previously suggested.
In its financial report to the Australian Securities Exchange on July 18, AGT said that its before-tax profits for the previous fiscal year would be around US$28.97 million. This was up from the US$26.49 million previously stated. AGT also said that it would register a second-half pre-tax profit of US$16.77 million, a US$2-million increase over previous projections earlier this month.
In citing the deal with Churchill Downs as being a major factor for the readjustment in May, the company also recognized that its business during the second half of this year could falter due to several reasons. It said that the second-half sales prospects would be “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.”
Novomatic AG, a gaming equipment supplier out of Austria, took control of 52% of AGT this past January. That deal was worth around US$348.3 million and has allowed the Australian slot machine company to branch out into new markets in both the U.S. and in Asia.
AGT is having to compete directly with Aristocrat Leisure Ltd. for the Asian market. JPMorgan Securities Australia Ltd. recently analyzed the slot machine industry and determined that Aristocrat has a strong possibility of outperforming all other global suppliers. The J.P. Morgan analysts, Shalin Doshi, Shaun Cousins and Donald Carducci, indicated that AGT will also be up against some stiff competition from niche manufacturers due to a push by casinos to install a larger variety of slot machines on their gaming floors.