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Australia – International markets aid Ainsworth as Australia falls

By - 28 February 2018

Australian slot giant Ainsworth Game Technology saw its first half results damaged by a decline in slots sales domestically with revenue overall falling by two per cent year-on-year to AU$120.3m.

Revenues from Australia were down ten per cent to AU$37.1m whilst international revenues increased by two per cent to AU$83.2m. The international segment made up 69 per cent of Ainsworth’s total revenue with Latin American revenues increasing by 11 per cent to AU$36.6m and machine sales increasing to 1,552, a rise of 26 per cent. Units under gaming operations increased strongly to 2,853, up 31 per cent with Mexico remains an important market in the region with significant market share increases and strong results. North American revenues increased by three per cent to AU$38.3m with the Pac Man licensed product ‘successfully boosting the size of our installed base of machines on participation.’ Ainsworth now has 5,850 units on participation/lease with customers, a pleasing rise of 18 per cent.

Sales in New Zealand, Asia and Europe dropped by 27 per cent. Ainsworth said: “We expect a good contribution from Novomatic in the second half of the year with the commitment for 1,000 kits to be delivered.”

Ainsworth said Profit before Tax was $16.2m, an increase of seven per cent on the prior corresponding period. Included in this result was a one-off gain of $2.5m on the sale of a surplus portion of land in Las Vegas.

Chief Executive Officer, Mr Danny Gladstone said: “The H1FY18 results are in line with our expectations. We continue to make good progress in executing on our key strategies to grow and strengthen Ainsworth. We have invested in new technologies and are increasing our range of innovative content. We have intensified our sales and marketing focus and with new jurisdictions, our international footprint is expanding. Our pipeline of contracted orders is strong. We expect to progressively grow market share and profitability across both international and domestic markets. In North America, we consolidated our strong market position with sales and profit both increasing. Class II markets continue to drive solid growth with almost 3,000 machines now on participation, an increase of seven per cent In Latin America, we delivered consistent growth with sales increasing by 11 per cent. We also enjoyed substantial growth in the number of units on participation, up 31 per cent.

“In Australia, we continued to see challenging and competitive market conditions with sales down 10 per cent. However, as we predicted last August, our market share is starting to improve as we release our innovative new technologies albeit off a low base. Looking ahead, we have expectations for a recovery in market share in H2.”

Mr Gladstone added: “Our first half results provide a solid base for a strong second half performance. We enter H2 with good momentum and we are making continuing progress in growing in the Americas where our innovative technologies perform well. We expect to increase our units on participation, driving high quality earnings and strong cash flow. We look forward to building our strategic relationship with Churchill Downs Inc and growing in new jurisdictions such as Washington. Our relationship with our partner Novomatic is also developing well and we expect to sell more kits and machines to them in the second half. We expect H2FY18 Profit Before Tax result, excluding currency movements to be modestly ahead of the $42.2m in H2FY17.”

The deal with Churchill Downs will see AGT initially supply at least 600 machines to be installed at its newly built historical machine racing facility, Derby City Gaming in Louisville, opening fall of 2018.

The new Trackside facility will feature AGT’s pari-mutuel historical racing games, which have been specifically engineered for CDI as part of the agreement. The games will be supplied on Ainsworth’s range of cabinets, including the A640, A600, A600 Slant Top, A560, A560SL Noir and Wide Boy.

Mr. Gladstone added: “Ainsworth is very proud of this exciting relationship with the iconic Churchill Downs business. We are delighted to supply these historic racing machines and we look forward to continuing to work very closely with our new partner in the future.”

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