To say that Ainsworth Game Technology took a massive hit in its Asia-based revenue recently would be an understatement. The Australia-based gaming machine manufacturer just let its most recent fiscal year performance be known and, for its Asia segment, the company saw a year-on-year decline of 22.4% as the year’s take reached just $1.7 million USD.
The majority of the revenue of Ainsworth’s Asia revenue for the period came through the sales of new slot machines and parts, according to a filing with the Australian Securities Exchange (ASE). It didn’t provide a reason for, or speculation behind, the specific drop in Asia. However, its overall profit after tax was able to stay on the positive side, being reported as around $7 million. Operating costs had increased by around 6% from 2018 to 2019 and, in spite of the decrease, the company’s balance sheet went from a 2018 net debt position to a net cash position in the most recent year.
Aisnworth CEO, Lawrence Levy, explained in their statement:
“We had good working capital controls through the year and collected more receivables, including the CDI payment for the 900 machines in September. Cash increased following investment in technology, and sales and marketing resources. We repaid over $20 million [US$13.62 million] of debt and finished with loans and borrowing at $55.4 million [US$37.74 million]. Our debt was clearly exceeded by our closing cash reserves of $616 million [US$419.74 million] leaving a net cash position of $6.2 million [US$4.22 million].”
He adds, “I am confident [Ainsworth] can drive improved long-term growth by leveraging its excellent reputation, focusing on R&D and complementing organic performance with selective acquisitions that make good financial sense.”
To help mitigate the losses incurred by the Asian segment, Ainsworth is going to make it a priority to increase unit sales in the North American markets. In addition, it is planning on introducing new innovative products to improve its domestic markets and will take a closer look at its R&D investments in order to improve that innovation, according to the filing.
Newly placed chairman of the board Graeme Campbell added, “While the [fiscal year 2019] results were disappointing, [Ainsworth] is capable of delivering improved performance. We have a dedicated and professional workforce, an excellent industry reputation and a well-established footprint across all our markets. As we re-evaluate and focus on R&D investments to develop successful new innovative products, we are confident we can deliver long-term growth.”
