Fri, Aug 30, 7:37am by Staff Writer
Investors in Ainsworth Game Technology are out of luck, with the poker machine maker suspending dividend payments so it can fund the development of new machines it hopes will step a collapse in sales.
The company revealed on Tuesday, after the ASX closed, that its full-year net profit for the year to June 30 fell 66 per cent to $10.9 million, from $31.9 million a year earlier, the Sydney Morning Herald reports.
The pokies maker said the result was driven by a poor performance in Australia, where the sale of new machines fell 55 per cent in the face of pressure from competitors, and delays developing new machines and having them approved by regulators.
Profit from the Australian business fell from $19.4 million to $2.8 million, as overhead costs remained steady even as revenue dived.
Ainsworth said it expected new products would “re-energise performance”.
“While the FY19 results are relatively weak, [Ainsworth] is capable of delivering improved performance,” said the company’s chief executive Lawrence Levy, who started in the top job on July 1.
“With an increase focus on investing in game technology and new product development, I expect our domestic performance to progressively improve our international success to continue.”
Australian revenue was down 43 per cent to $36.1 million, while revenue company-wide was down 12 per cent to $198 million.
In overseas markets, revenue fell 2 per cent to $198.2 million.
As well as selling poker machines to casinos and other venues, Ainsworth operates about 2200 gaming machines in North America.
The company said it would conduct a review to evaluate and focus its research and development, and was suspending dividend payments to “accommodate for further investment in product development.”
Ainsworth Game Technology has posted a 66% slump in post-tax profit to AUD$10.9m on the back of a 12% fall in turnover to $234.3m for the 12 months to 30 June, 2019: https://t.co/1Jo9z69ts0 pic.twitter.com/B8eSjy350T
— iGaming Business (@iGamingBusiness) August 28, 2019
Australia’s two poker machine manufacturing giants are heading to the federal court, with Aristocrat Technologies claiming that rival Ainsworth Game Technology stole the designs to one of its most successful slot machines.
The Age reports that Aristocrat lodged proceedings in the Federal Court against Ainsworth on Wednesday afternoon, alleging breach of intellectual property law.
The dispute centres on technology Aristocrat developed for its popular Lightning Link machine, which it alleges was stolen by its rival and used in one of its own machines.
Aristocrat said it would “always aggressively defend our assets, including our IP.”
“This case goes well beyond simple copyright infringement and concerns allegations of extensive and deliberate misappropriation of trade secrets, confidential information and intellectual property,” the slot machines maker said in a statement.
“Upholding appropriate standards is part and parcel of ensuring ongoing trust in our business and industry, and is an important part of Aristocrat’s high compliance culture.”
Ainsworth said in a statement it would be “vigorously defending the claims made by Aristocrat in these proceedings.”
Last year, Aristocrat took legal action demanding a trove of documents from Ainsworth to discover how it developed one of its new machines, called the Jackpot Strike, and whether it contained features copied from the Lightning Link.
That claim demanded Ainsworth hand over source code, mathematical tables, game rules, artwork and commercial documents relating to the new machine.
The complex mathematical codes that sit behind poker machines which govern every spin and the frequency of every win are key to a new machine’s success or failure on the gaming floor.
The Lightning Link has been a runaway success for Aristocrat, being picked up by casinos around the world.
Both ASX-listed companies were founded and then sold by the 95-year-old magnate Len Ainsworth.
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