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Ainsworth CEO Levy Lowers Profit Forecast, Shares Sink

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Ainsworth Game Technology is a well-known company in the gaming world, providing gaming cabinets and games to 50 countries. But the Australian publicly-traded company’s headquarters are located in Newington, Sydney.

For many years, the company has been a steadfastly profitable company in the market. Recent struggles in an increasingly competitive market, however, has prompted Ainsworth to cut its expected 2019 profits by more than $3 million. As a result, the AGI share price fell as much as 9.5% to just $0.76 on the news.

All of this is happening under Lawrence Levy, the new Ainsworth CEO appointed only one month ago.

What is Ainsworth Game Technology?

An Australian company in Sydney, Ainsworth has a simple vision: to deliver excellence in global gaming solutions. And its mission is nearly as plainly stated: to provide high quality innovative gaming solutions globally and to secure sustainable profitability and growth for all stakeholders.

Founded in 1995, Len Ainsworth founded the company to manufacture and supply gaming solutions.

As the company grew and developed its signature product, the Ambassador gaming machine, it stood out from its competitors by way of superior graphics and a varied range of games for players. That machine soon incorporated updated electronics and a powerful processor, while continually improving.

By 2007, Ainsworth released its Ambassador SL model, tailored to various markets and deliverable around the world. And five years after that, the A560SL cabinet was created to include a wider collection of games for the international market.

In Australia, Ainsworth released new branded products with linked jackpots and products like Quadshot and Reels of Wheels. Meanwhile, the A560SL was being commercialised in the Americas. And in New Zealand, revenues increased by nearly 50%.

2015 saw the launch of the new A600 gaming product. The company has since continued to expand to offer everything from the products themselves to a range of gaming design, development, assembly, testing, sales, and field services.

Nearly 500 employees make it all happen from the main Sydney office to other offices in North and Latin Americas. In 2019, Ainsworth products are in 50 countries worldwide.

New Leadership at Ainsworth Game Technology

In April 2019, Ainsworth appointed a new Chief Executive Officer, Lawrence Levy, to keep the firm fresh and competitive.

Levy left his previous position as the Vice President of Global Sales at Novomatic AG Austria. He subsequently brought 37 total years of gaming industry experience with him.

Ainsworth Chairman Graeme Campbell spoke of Levy’s respect and experience as a gaming executive and said; “I am confident that he will further assist the company achieve its strategies to become a leading provider of innovative gaming technology to the global market.”

Enter Market Pressure

The news during the first few weeks of May didn’t look good for Ainsworth.

According to the Sydney Morning Herald, Wilsons analyst Mark Bryan anticipated a negative report from Ainsworth, noting the company had been in “perennial forecast downgrade mode” for five years and would likely continue the trend. He said Ainsworth Game Technology products were failing to “resonate with buyers”.

Bryan was right.

Ainsworth told investors last week that profits were going to be cut for the second half of the 2019 financial year due to intense market pressure and delay in securing approvals for new pokies products. The new forecasted profit was $4 million, down by more than $3 million.

Other bad news came in the form of lower sales in New South Wales than anticipated and a $2 million value reduction of shares in its 616 Digital online social casino business. That was pushing the company to take an impairment of $5 million on its Australian and digital assets.

The company said it expected those pokies approvals to come through soon. Apparently that would then increase its market share in the 2019-2020 timeframe. In addition, Ainsworth reportedly has new products in development and the opportunity to collaborate with Novomatic AG.

Shares immediately sunk more than nine percent in the following day’s early trading. However, they did rebound from $0.76 up to $0.83. One week later, the shares still hover around $0.81.