Ainsworth increase profit forecast to US$29 before-tax

In the company’s latest earnings guidance to the Australian Securities Exchange on Wednesday, Ainsworth said it was on target to register a before-tax profit of AUD22.8 million in its financial second half, having previously indicated a target of about AUD20 million.

Ainsworth said its previous guidance took into account the completion of an order for 900 machines by Churchill Downs Inc. Churchill Downs is developing a “racing machine facility” in the United States that is stocked with Ainsworth products.

In its guidance to the stock exchange in May, Ainsworth said domestic sales prospects for second half of this financial year would be “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 first half financial year 2019”.

The company recorded a before-tax profit of AUD57.4 million in the financial year ended June 2017. Its next results are due for release on August 29. The Australian financial year ends on June 30.

In January this year, Austrian gaming equipment supplier Novomatic AG completed the acquisition of a 52-percent stake in Ainsworth for about AUD473.3 million in a move that gave Novomatic access to new markets in Asia and the United States.

In Asia, Ainsworth competes against another Australian company, Aristocrat Leisure Ltd, for market share. In a recent forward-looking report for slot-machine suppliers, JP Morgan Securities Australia Ltd said Aristocrat would outperform other global suppliers into next year. Analysts Donald Carducci, Shaun Cousins and Shalin Doshi say Ainsworth faces competition from niche manufacturers as casinos seek to install a wider range of machines on gaming floors.