Tue, May 14, 2:38pm by Staff Writer
One of Australia’s largest poker machine manufacturers, Ainsworth Game Technology, has cut its expected profits, blaming “intense” market pressure and delays in securing approvals of new pokies products.
Ainsworth told investors on Tuesday its profits for the second half of the 2019 financial year would be $4 million – more than $3 million less than what it had previously said, the Sydney Morning Herald reports.
The news sent the company’s stock price tumbling 9 per cent in early trading to 76 cents, before rebounding to end the day just 1.19 per cent lower at 83 cents after the company issued a clarification saying it had incorrectly stated its net debt was higher than what it actually was.
Last week, Wilsons analyst mark Bryan said Ainsworth had been in “perennial forecast downgrade mode” for the past five years, and “this trend is continuing.”
“Domestically, slots buyers are seeing a fragile demand environment, leading to reduced capex,” he said.
“This restricted market opportunity is being compounded by Ainsworth Game Technology products failing to resonate with buyers.”
In a trading update last Wednesday, Ainsworth said its pre-tax profit for the six months to June 30 would be about $4 million “impacted by the intense competitive market pressures and delays encountered in new product approvals which were not achieved in the expected time frames.”
Ainsworth expects the approvals soon and these would boost market share gains in 2019-20.
It would also take an impairment on its Australian and digital assets of $5 million, due to lower sales in New South Wales and a $2 million reduction in the value of its shares held in online social casino business 616 Digital.
“Ainsworth Gaming Technologies is progressing with the development of new products and technologies with the view to improving future profit performance,” it said.
'Intense pressures': Pokies giant Ainsworth slashes profit https://t.co/y78NaknBZK
— Sally Gainsbury (@DrSalGainsbury) May 8, 2019
“Additional opportunities to collaborate with AGT’s major shareholder, Novomatic AG, and other external content providers are being actively pursued.”
Ainsworth Game Technology was founded in 1995 by Australian billionaire pokies king Len Ainsworth, who recently sold his majority stake in the company to an Austrian gambling company, Novomatic, for $473 million.
Mr Ainsworth retains more than six million shares in the company.
Gambling provider NOVOMATIC boasts another milestone in its strategy to expand across the Asia pacific region by announcing a partnership with fellow provider Indo Pacific Gaming.
Casino News Daily is reporting that the two parties have joined to supply the gambling markets of Laos, Cambodia, Sri Lanka, Vietnam, Nepal and the Indian state of Goa.
Under the recently inked deal, NOVOMATIC will be able to deliver its most successful casino games, sports betting products and technology solutions.
As mentioned, the deal is expected to drive the Austrian company’s planned Asia-Pacific expansion to a new level and open up new opportunities before the major group.
Founded in 1980 by billionaire businessman Johann Graf, Novomatic has grown into a major developer and provider of gaming and technology solutions for the gaming and betting industries.
The company currently employs more than 30,000 people in offices in more than 50 countries.
It provides its products including gaming equipment, games, system solutions, lottery products and related services to business-to-business and business to client clients in more than 70 countries.
Commenting on their recent partnership agreement with Indo Pacific Gaming, Novomatic chief executive Harald Neumann said in a press release from earlier today that the strategic step places his company in a better position to supply its products across the Asia-Pacific region.
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