Latest Ainsworth report shows improvement in spite of sales slump

TAGs: ainsworth game technology

Ainsworth Game Technology Limited saw a mixed second half last year. It’s post-tax profit increased 25% to reach A$12.1 million (US$8.6 million), but its revenue dipped 2% to A$118 million (US$84.66 million). Normalized profit after tax dropped 47% over the same period a year earlier to settle at A$7.2 million (US$5.16 million), supported by a gain of A$5.8 million (US$4.1 million) due to currency movements. The company’s EBITDA (earnings before interest, tax, depreciation and amortization) climbed 21% to A$29.7 million (US$21.3 million), but its Underlying EBITDA, which is Latest financial report for Ainsworth shows improvement in spite of sales slumpcalculated based on the inclusion of currency impacts, dropped 11% to A$23.9 million (US$17.14 million).

The Australian-based company was hit hardest at home. Sales dropped substantially and its domestic revenue dropped 47% to A$19.7 million (US$14.13 million). Profit was just A$2 million (US$1.43 million), which included a A$1.3-million (US$932,560) one-time write off of older gaming cabinets.

On the other hand, revenue in North America jumped up almost as much as domestic revenue fell. It increased by 40% to A$53.8 million (US$38.59 million) and profit increased 47% to A$21.6 million (US$15.49 million). The increases were made possible by a 38% increase in unit sales, which reached 1,342. Elsewhere around the world, revenue increased 6% year-on-year to A$8.8 million (US$6.3 million), but most of this was due to a major contribution from its largest shareholder, Novomatic.

Ainsworth expects it can do better and is looking forward to proving it during the second half of its fiscal year. The company’s CEO, Danny Gladstone, explains, “Though I am disappointed with 1H19 results I expect that new game releases will improve performance on our installed base and create revenue opportunities. In 2019, while recognizing the intense competitive landscape, we will continue to pursue development initiatives and actively recruit experienced game developers and utilize third party developers to harness the best of our internal capabilities with external expertise. This strategy is expected to create diversity in product offerings over time with an increased level of investment in R&D activities.”

Because of the performance, shareholders are going to have to wait on any possible payouts. Ainsworth has decided to suspend its interim dividend for the period, but will hopefully produce better results in the second half.


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