Aussie gaming tech company Ainsworth (ASX: AGI) is set to rein in the profits as historical horse racing picks up steam globally. Based on current forecasts, the Company expects to report a profit before tax of approximately $20 million, excluding currency impacts and one-off items, for the six-month period ending on June 30, 2023.
Ainsworth’s strong financial performance is attributed to its ongoing revenue growth in North American markets. The Company has successfully expanded its Historical Horse Racing (HHR) products into both new and established areas, contributing to the positive momentum. Notably, it has achieved remarkable results in its gaming operations, including the placement of 400 units at VictoryLand in Alabama under participation agreements.
The success of its Gamblers Gold multigame series has also played a significant role in driving sales. As a result, additional units of the product have been sold in South Dakota and Louisiana during the current period. Ainsworth plans to expand the Gamblers Gold series to other places as regulatory field trials are completed.
The Chief Executive Officer of AGT, Harald Neumann, stated, “I am encouraged by the continued growth being experienced and remain confident that the investments and development initiatives we have undertaken will enable the Company to maintain the positive revenue growth trajectory in coming periods.”
Historical Horse Racing is a form of gambling where players can bet on past horse races using special machines. It has contributed significantly to Ainsworth’s revenue stream. These machines display virtual races based on real races that have already taken place, allowing players to analyse racing form, albeit with names randomly generated in lieu of the real historic race. Similar to real horse racing, players can choose from various betting options, such as picking the winning horse or predicting the order of the top finishers. Correct bets yield monetary rewards based on the odds.
In H1 FY23, the Company reported a Profit before Tax (excluding currency impact) of $9.4 million, compared to $10.4 million in the previous corresponding period (pcp). Furthermore, its net cash balance stood at $36.5 million, compared to $32.2 million in the previous half and $50.3 million in the pcp. The reduction in net cash balance from the previous half was primarily driven by increased investments in working capital, particularly in inventories, aimed at navigating global supply chain challenges.
The Company’s Group Revenue witnessed a substantial increase, reaching over $124 million, which represents a 23% growth compared to the $101 million recorded in the pcp. The revenue growth was observed across key regions, including Australia and the Americas.
Riding forth, Ainsworth anticipates a significant revenue boost of at least 25% in Latin America during H1CY23, with Argentina taking the top spot. However, the Company expects this upward trend to be curtailed in the second half of the year due to the Central Bank’s implementation of stricter import restrictions within the region.
With the ongoing success of its gaming products and a robust presence in key regions, Ainsworth remains poised for continued success in the foreseeable future.
Alinda is a Business Reporter for The Sentiment
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