Ainsworth profit nosedives amid domestic struggles

Australian gaming machines and content provider Ainsworth Game Technology (AGT) has posted a 66% slump in post-tax profit to AUD$10.9m (£5.98m/€6.59m/$7.31m) on the back of a 12% fall in turnover to $234.3m for the 12 months to 30 June, 2019.

With the company’s online division contributing $4.2m of sales, group earnings before interest and deductions was $44.8m, a 34% year-on-year decrease, with challenging conditions in Australia and Latin America blamed for the overall decline.

Three months after issuing a profit warning, Ainsworth again singled out its domestic market as a particular struggle, with sales in Australia down 43%.

However, the company highlighted a stronger balance sheet at the end of the financial year, with net cash of $6.2m versus a net debt of $36.2m 12 months earlier, supporting “an increase in R&D investments to drive organic growth, complemented with selective acquisitions”.

AGT also underlined encouraging progress in North America, where revenue increased by 8%, helping to lift international sales to 85% of the company’s turnover.

Ainsworth added that 20 games have been approved in New Jersey with GVC for the PlayMGM online platform, while a total of 62 games were developed and approved for online distribution throughout the US, Europe and Latin America over the 12-month period.

In February, the company announced the launch of Mustang Money, its first real-money online casino game, in Mexico. AGT said that the game is performing to expectations in terms of growing the company’s player database and revenues.

Lawrence Levy, who was appointed as the company’s new chief executive on 1 July, said that the company is in the process of reviewing its research and development investments.

“I am confident AGT can drive improved long-term growth by leveraging its excellent reputation, focusing R&D and complementing organic performance with selective acquisitions,” he said.

“My initial observations as the new CEO are that we have a strong footprint in major markets, scale and growing recurring revenues. With an increased focus on investing in game technology and new product development, I expect our domestic performance to progressively improve and our international success to continue.

“While the FY19 results are relatively weak, AGT is capable of delivering improved performance. We have a professional and motivated workforce, an excellent industry reputation and a well-established footprint across all our markets.”