Australia-based gaming technology company Ainsworth Game Technology has been trying to figure out how to put the brakes on a revenue slide and turn around the business. It hasn’t had a productive 2019 and the third quarter was particularly brutal, resulting in a year-on-year drop of 65.9% in its profit. Not quite sure where to find an immediate solution, Ainsworth is going to do what most children do when they lose their way – look to the parents. In this case, the parent is Novomatic, which owns 52% of the company.
During Ainsworth’s annual general meeting yesterday, CEO Lawrence Levy admitted that it has been a rough year. Profit was down to $7.4 million on revenue that slid 11.8% to $158.8 million. The Asian market was hit hard with a 22.4% drop in revenue and the Australian market was pummeled by a 43.2% drop.
But, the company is ready to bounce back. Levy told those who participated in the meeting, “We are also empowering a new internal creative team to focus on new game concepts based on a deep understanding of customer requirements. We look forward to our new games making a meaningful contribution to our financial results in fiscal-year 2021.”
To do that, Ainsworth is going to rely heavily on the “significant expertise” of Austria-based Novomatic, which bought its controlling stake in the company last year. Levy explained that the company will turn to Novomatic Novomatic AG “to identify and deliver additional synergy benefits from this strategic partnership,” adding, “While Ainsworth is well represented in many markets, our sales coverage is not complete. We have identified opportunities for sales in markets where Ainsworth does not currently operate. Novomatic has a strong presence in many of these markets and we can leverage their significant distribution capability to build additional revenues.
In October, two Ainsworth executives resigned, allowing Ainsworth to consolidate its operations somewhat in order to work more efficiently and allow for more “creativity, information flow and decision making.” Those executives were the company’s chief technology officer, Kieran Power, and its president of North American operations, Joseph Bertolone.
While Ainsworth works on a plan of attack and gets help from Novomatic, the 2020 fiscal year will most likely remain flat. The company will be investing a lot in product development and “transition to new game concepts” that will imply additional costs, but Levy remains optimistic that everything will be in much better shape by fiscal year 2021.
Levy also confirmed to meeting participants that the board is going to see a couple of changes. As announced this past September, Graeme Campbell has stepped down as chairman, taking the role of lead independent director, and in his place will be former CEO Danny Gladstone.
