Ainsworth returns to profitabilityEmail Print Normal font Large...

Ainsworth returns to profitability
Email Print Normal font Large font February 21, 2006 - 3:50PM


Gaming machine supplier Ainsworth Game Technology Ltd says it still has a long way to go, after returning to profitability in the first half.

Ainsworth on Tuesday reported a net profit of $3.1 million, compared to a net loss of $2 million in the previous corresponding period, which was restated under the new international accounting standards.

Chief executive David Creary said Ainsworth returned to profitability by focusing on cutting costs while continuing to grow revenue.

"Sustainable growth is a mixture of controlling costs and increasing revenue and the company has a history of increasing revenue but the costs have blown out," he said.

"We needed to make more with less."

Ainsworth had moved some of its Melbourne manufacturing facilities to Sydney as part of its restructuring efforts, Mr Creary said.

The marketing, sales and engineering operations had also been restructured, he said.

Looking ahead, Mr Creary said the past year had confirmed Ainsworth had "a long way to go" to realise its full potential.

"All we needed was a profit to start with, now we want to control the cash-flow situation," he said.

The company had already reduced its inventory despite the introduction of new gaming machine models, with further improvements expected in 2005/06, he said.

Mr Creary said the company could also concentrate on developing its US presence.

"We've got Oregon and Minnesota but we need to get state licenses in place which will mean that we can sell into those markets," he said.

"That will give us the sustained profitable growth that we're looking for."

Sales revenue rose 15 per cent to $46.8 million in the six months ended December 31.

International markets contributed 78 per cent of total revenues, up 10 per cent from the previous corresponding period.

"International gaming is continuing to expand rapidly and Ainsworth-designed games are proving to be successful worldwide," Mr Creary said.

"The previously announced licence agreement with Unicum, the largest casino and gaming equipment supplier in Russia, is expected to provide further opportunities."

Ainsworth had also grown market share in Australia through the introduction of new products, despite difficult conditions linked to regulatory restrictions on the gaming industry, Mr Creary said.

No interim dividend was declared in line with last year.

Ainsworth shares closed 2.5 cents higher to 50 cents.