Ainsworth Game Technology, a gaming machine supplier based in New South Wales, Australia, has initiated a strategic review in response to rumors of a potential buyer. The company has enlisted Macquarie Capital as its financial advisor to explore all possible opportunities. Although no offers have been made, the ASX-listed Ainsworth is open to considering various strategic alternatives to enhance shareholder value.
The decision to conduct a review comes after reports in the Australian Financial Review suggested the company may go private due to challenging market conditions experienced in recent years. Ainsworth’s board of directors released a statement confirming the review and emphasized the commitment to driving sustained, long-term growth through product strategy and continued investments in research and development (R&D).
Following the announcement of the strategic review, Ainsworth’s share price surged, reaching $1.20 at the close of trading—a 22% increase from the previous week. The company’s most recent financial results revealed a significant year-on-year revenue increase for the six months ending on June 30, 2023. Despite this growth, profits were impacted by a write-down on investments made in Argentina, resulting in flat underlying EBITDA compared to the same period in 2022.
North America proved to be Ainsworth’s strongest market segment, contributing 48% of total revenue and generating a 13% year-on-year revenue increase. However, the Australian domestic market continued to pose challenges due to minimal corporate sales, market conditions, and fixed costs. To counteract the lower revenues in Australia, the company reported increased revenues in Asia and New Zealand.
The company’s commitment to R&D was emphasized in both the strategic review statement and its financial results. Ainsworth highlighted investments in Next-Gen Game and Mathematics engines, external content and game development providers, hardware and cabinet design, and talent development initiatives. With a 4.5% year-on-year increase in R&D spending in the first half of the year, Ainsworth is focused on further upgrading its technology, hardware, and game performance.
Harald Neumann, CEO of Ainsworth Game Technology, expressed confidence in the company’s strategies to improve earnings, particularly through R&D investments. He emphasized the focus on upgrading technology, hardware, and game performance to drive further improvements in the future.