Investors sold off shares in Ainsworth Game Technology (AGI) yesterday after the annual meeting heard a sales downgrade which will lead to a fall in first half profit.
The market took fright at the news and down went Ainsworth shares by 8.4% to $2.49. At one stage the shares were down more than 12%.
That’s the lowest the shares have been for 18 months or more and during trading hit a low of $2.40, the lowest they have been since early 2013.
The shares are now down more than 40% in the past year, such has been the level of investor unhappiness with the company’s performance.
AGI YTD – Ainsworth shares down on lower pokie sales
The annual meeting was told that while total sales of poker machines for the 2015 financial year will be higher than the previous year, first half sales will be lower.
CEO, Danny Gladstone told shareholders that improvement will come in the second half in the North American market, while softness in the domestic market will hit revenue in the first half, he said.
"Domestic revenue for the first half of 2014-15 is expected to be similar to the second half of 2013-14 and down approximately 30 per cent compared to the previous corresponding period," Mr Gladstone said.
“Given the expected lower domestic revenue, the company advises that it expects to report a lower [interim] profit compared to the corresponding period, however in line with the second half of 2013-14."
In Australia ”domestic revenue for the first half of FY15 is expected to be similar to the second half of FY14 and down approximately 30% compared to the previous corresponding period in 2014.”
"This revenue decline is largely due to timing as we progress product approvals and is expected to be largely regained in the second half of FY15 resulting in similar levels being achieved compared to the previous 2014 year,” Mr Gladstone told the meeting.
According to Bloomberg estimates, analysts expect first-half net profit, excluding one-off items, to fall 12% to $31.3 million.
They expect full-year revenue will rise 12% to $277 million. Revenue in the 2014 year jumped 23% to $244 million.
