Half Year 2026 Ainsworth Game Technology Ltd Earnings Call Transcript
Key Points
- Gross margin expanded 6 points to 62%, driven by a tariff refund and higher average selling prices.
- Operating cash flow turned positive at $8.9 million, a $13.6 million year-on-year improvement, and net debt reduced to $8.5 million.
- Asia Pacific segment grew revenue, units, and profit, with the Raptor platform driving momentum and the A865 cabinet performing well.
- Dragon Legacy family achieved #1 and #2 positions on the Eilers report for new core video games, indicating a strong product turnaround in North America.
- Recurring revenue streams, including HHR connection fees, remain stable with over 10,000 units connected, providing a resilient base.
- Group revenue fell 23% to $116.5 million, with underlying profit before tax down to $4.7 million from $13.9 million.
- North American unit sales dropped sharply to 492 from 1,357, due to an inconsistent product roadmap that eroded operator confidence.
- Latin America revenue declined 20%, impacted by a Mexican gaming tax increase from 30% to 50%, reducing operator capital.
- Dividends remain suspended to preserve liquidity and fund product development, reflecting a cautious capital allocation approach.
- Interactive segment revenue fell to $2.3 million and has not yet delivered, with competitive pressures and game performance issues persisting.
Thank you, and good morning, everyone. Let me start by framing the half honestly, because I think that's the most useful thing I can do for you. Trading conditions since the start of the year have been tough across all of our markets as a result of weak consumer sentiment and challenging macroeconomic conditions. In addition to the prevailing trading conditions, it is important to note that this has been a transitional period for Ainsworth. Revenue of $116.5 million was down 23% on the prior corresponding period and underlying profit before tax of $4.7 million was below the $13.9 million we delivered in the first half of last year. That is not the result we want, and I'm not going to dress it up. But underneath that headline, there are 3 things happening that I'd ask you to hold on to through this presentation. First, the decline is concentrated and explainable. It sits almost entirely in the North American unit sales and in Latin America. In North America, the cause is a product road map that was inconsistent. In Latin America, it is
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