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US – AGEM Index increases for 34th month on the bounce

By - 13 August 2018

The AGEM Index has reported a year-on-year increase for the 34th consecutive month, increasing by 141.46 points, or 33.37 per cent, since July 2017.

During the latest period, eight of the 13 global gaming equipment manufacturers reported month-to-month increases in stock price. Five manufacturers reported decreases in stock price during the month.

The major stock market indices also saw gains during the month. The S&P 500 reported a month-to-month increase of 3.60 percent to 2,816.29. The Dow Jones Industrial Average grew 4.71 percent to 25,415.19, while the NASDAQ increased 2.15 percent during the period to 7,671.79.

Positive contributors to the July 2018 AGEM Index included Crane, who contributed 9.88 points due to a 13.03 per cent increase in stock price to $90.57, Aristocrat Leisure, who reported a 4.21 per cent increase in stock price to AU$32.20, contributing 9.67 points and International Game Technology, who contributed 6.35 points due to an 8.78 per cent increase in stock price to $25.28.

With its stock price falling 6.91 percent to ¥5,250, Konami contributed negative 6.97 points.

During July, International Game Technology released its second-quarter results. During the quarter that ended on June 30, 2018, IGT generated $1.2bn of consolidated revenue, a decrease of 1.5 per cent from the second quarter of 2017. Despite the decrease in revenue, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 4.2 per cent on a year-over-year basis, reaching $442m for the second quarter. This improvement in performance is attributable to strong worldwide lottery performance. Adjusted EBITDA margins also improved by 2.0 percent on a year-over-year basis, growing from 34.8 per cent for the second quarter of 2017 to 36.8 percent for the second quarter of 2018.

Agilysys also released its results for the first quarter of its fiscal year 2019, which ended March 31, 2018. During this quarter, Agilysys generated net revenue of $34m, an increase of 0.5 per cent from the $33.9m in the prior year. Agilysys also achieved a gross profit of $17.9m during the first quarter, up 7.3 per cent from $16.7m in the first quarter of the prior year. Gross profit margins grew by 3.4 percent on a year-over-year basis, increasing from 49.2 per cent to 52.6 percent. Adjusted EBITDA grew on a year-over-year basis from $1.6m to $3.1m for the first quarter of fiscal year 2019. Adjusted EBITDA margins also grew from 4.8 percent to 9.2 percent over the same time period.

Scientific Games (SGMS) released its results for the second quarter of 2018. Scientific Games experienced strong year-over-year revenue growth, with revenue rising 10.2 per cent from $766.3m to $844.m. Revenue growth during this period was primarily driven by $50.6mof revenue from NYX, which was acquired during the third quarter of 2017. Adjusted EBITDA also rose 8.1 per cent on a year-over-year basis, growing from $314.8 million during the second quarter of 2017 to $340.4 million during the second quarter of 2018. Despite this growth, Adjusted EBITDA margins declined slightly on a year-over-year basis, dropping from 41.1 percent for the second quarter of 2017 to 40.3 percent for the second quarter of 2018.

PlayAGS Inc. (AGS) experienced strong results during the second quarter of 2018. On a year-over-year basis, total revenue increased by 45.4 per cent, growing from $50.1mto $72.8 million, and adjusted EBITDA grew by 40.2 per cent from $26.1m to $36.6m. Adjusted EBITDA margins did decrease on a year-over year basis from 52.1 per cent to 50.2 per cent, which management mainly attributed to equipment sales accounting for a greater percentage of total revenue.

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