Australian slot machine supplier Ainsworth Game Technology is focussed on buildings its cash reserves in order to self-fund its growth strategy into 2023, with the resumption of dividend payments temporarily on hold according to Chairman Danny Gladstone.
Gladstone, a former CEO of the company, outlined Ainsworth’s short-term plans while addressing investors at its Annual General Meeting on Thursday. In particular he pointed to Ainsworth’s net cash position of AU$50.3 million (US$33.6 million) as a strong foundation for growth but said it was important to maintain such reserves given ongoing “economic uncertainties”.
“Our priority remains to maintain a strong balance sheet to be able to self-fund our growth strategy and product investments,” Gladstone said.
“We are improving the outputs of our R&D initiatives and lifting the competitiveness of our products. We are offering more value to our customers and have a new organisational structure and financial capability to support these strategies.
“Given the current economic uncertainties combined with supply chain challenges, an increased level of working capital is initially considered necessary to ensure continuity in production to fulfill expected sales volumes in calendar year 2023.
“Once these conditions stabilize and operational requirements can be reliably determined, the Board is committed to review the recommencing the payment of dividends to shareholders.”
Ainsworth returned to profitability in the 12 months to 30 June 2022, reporting a profit before tax of AU$27.3 million (US$18.3 million) and profit after tax of AU$11.8 million (US$7.9 million) – the latter reversing a loss after tax of AU$53.4 million (US$35.7 million) in FY21.
The company’s net cash position of AU$50.3 million was also AU$45.2 million (US$30.2 million) higher than at the same time in 2021.
Ainsworth CEO Harald Neumann said the company expects to achieve profit before tax of AU$18 million for the six months to 31 December 2022 based on current forecasts, representing further growth. He also pointed to ongoing investment into research and development, including the recent launch of two new games studios.
“These will be overseen by seasoned game developers with proven track records of creating successful games. These two new studios are in addition to our established studios in Australia and Las Vegas,” Neumann said.
“We have entered the first half of FY23 with good momentum, the new year has started well and we will continue to execute to plan.”