Shares in gaming machine group, Ainsworth Game Technology (AGI) slid nearly 7% yesterday after it surprised the market with a weak earnings update.
The shares fell 6.9%, or 21 cents to $2.81 after it warned that second-half sales in the Australian market were weak and as a result that it now expects an unchanged full-year net profit after tax at about $61.6 million.
Ainsworth said revenue from its Australian poker machines in pubs and clubs had slumped by just over a third.
The trading update said those trends had continued in the second half with unit sales to the Australian corporate market being adversely affected.
It expects 2015 full year revenues to fall by 2% from $244.1 million recorded in 2014, thanks to ve strong growth for offshore sales, partly due to the lower value of the Aussie dollar.
"This reduction is driven by lower domestic revenues for the second half compared to the first half of FY15 which have been largely offset by continued growth achieved within international markets," Ainsworth said in a statement to the ASX.
"Given robust international sales and the positive outlook for domestic sales, AGI expects to deliver strong organic revenue and profit growth in 2016."
And while it expects to meet last year’s net profit figure of $61.6 million for the 2014-15 financial year, the company warned that was subject to any adverse movement in foreign exchange rates and audit completion procedures.
AGI 1Y – Ainsworth sees flat 2015 profit
It added the company’s international sales remain strong with American and Asian revenues on track to increase by 40% 2015 compared with the previous year.
Ainsworth will release its full-year profit on August 18.
Behind the weakness in the domestic market has been slow approvals for new machines in Queensland an NSW.
Ainsworth said the regulatory delays in Queensland and NSW that affected its Australian sales in the first half of the financial year had continued into the second half.
And the Queensland approvals had been expected in December, but they did not come through until March.
Queensland and NSW are Ainsworth’s largest domestic markets, and it said yesterday that all regulatory approvals have now been obtained.
