Ainsworth Game Technology Limited provides the following trading update. On 27th February 2018 AGT provided guidance to ASX; “We expect H2FY18 Profit Before Tax, excluding currency movements, to be modestly ahead of the $42.2 million in H2FY17”. Profit Before Tax, excluding currency movements for H1FY18 was $16.2 million.
While Ainsworth continues its progress to develop a more competitive product range to drive long term market share growth, several short term factors have caused profit expectations for 2HFY18 to be rebased. The Company now expects 2HFY18 Profit Before Tax, excluding currency movements to be around $20 million. Profit Before Tax for the full year FY18, excluding currency movements, is now expected to be approximately $36 million compared to the $57.4 million in FY17. This guidance assumes the Churchill Downs Inc (CDI) machine order as previously announced to ASX is completed in this financial year
Domestic sales expectations for H2FY18 have been adversely affected by a range of factors, including competitive activity, regulatory approval delays in product submissions and further product development changes which have deferred the approval and release of previously scheduled key game titles until H1FY19.
In Latin America, total unit sales are slightly lower in H2FY18 than the prior corresponding period with second hand units making up a larger share of the sales mix. Whilst these second hand unit sales have reduced inventory levels and are profitable, gross margins have been lower.
In North America AGT’s new unit sales in H2FY18, including the contribution from CDI, are expected to be similar to the 2,117 units reported in the prior corresponding period in 2017 with consistent average selling prices. The growth in PacMan licensed product though, with its associated royalty fee and lower gross margin, coupled with the reduction in participation income in the Class III market, are impacting margins and profitability in the region.
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