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Ainsworth licking its wounds after poor financial year

Fri, Sep 13, 3:22pm by Staff Writer

It wasn’t a good financial year for Ainsworth Game Technology, but that wasn’t wholly unexpected.

Casino Aus reports that in April, Lawrence Levy was appointed as the new Ainsworth chief executive officer after the company wanted to remain fresh and competition, achieve its strategies and become a leading provider of innovative gaming technology to the global market once more.

A month later, the company issued its forecast for the final 2019 numbers, where it expected profits to be slashed by more than $3 million, which pushed its shares down nearly 10 per cent.

The gloomy forecast was attributed to market pressure and a delay in securing approvals for new pokies products.

Sales were also down in New South Wales, contributing to a $2 million value reduction of shares in its online social casino business.

This pushed the company down on its Australian and digital assets.

Further, a Wilson’s analyst said the negative report was a result of five years of a “perennial forecast downgrade mode” and saw no ability for the company to reverse the trend.

Besides restricted market opportunities, Ainsworth products are not resonating with buyers.

Manufacturer started from humble beginnings

Ainsworth Game Technology was founded in 1995 by Len Ainsworth to manufacture and supply gaming solutions.

Starting with its signature Ambassador gaming machine, it offered superior graphics and a range of pokies for Aussie players.

As the Ambassador was upgraded through the years, Ainsworth expanded its market around the world.

It was known for its powerful gaming processors, updated technology and consistently upgraded models.

Profits were always on the rise, especially after launching its A600 product in 2015.

And with expanded services – such as assembly, testing and field help – the company grew to nearly 500 employees and sales to 50 countries.

Ainsworth’s numbers crunched

Ainsworth reported a 66 per cent decrease in post-tax profit, which came in at A$10.9 million.

That was in conjunction with a 12 per cent decrease in revenue to $234.3 million.

And post-tax profit was $14.7 million, down a massive 65.2 per cent year-on-year.

The online division brought in $4.2 million in sales, which put EBITDA at $44.8 million, which was down 34 per cent from the previous year.

With those results, Ainsworth suspended interim and final dividends.

The company wants to evaluate its research and development investments and growth opportunities and reinvest the dividends to improve the company’s overall financial position.

Challenging conditions in Australia and Latin American were blamed for its sales decline, with the domestic market singled out as a particular problem.

Despite the negative results, Ainsworth tried to highlight a few bright spots.

Revenue in North America was up 8 per cent.

Its games have been approved for the New Jersey market for use on the PlayMGM online gaming platform, which will be rolled out in partnership with GVC.

The early 2019 release of Mustang Money for online casinos is Mexico is performing well.

Levy had some encouraging words on the positive news.

“My initial observations as the new chief executive officer 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.”

He also noted that AGT is capable of doing better, but it had a strong and motivated workforce and the company still has a strong reputation in the industry.

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