The Ainsworth Game Technology Limited (ASX: AGI) share price will be one to watch on Tuesday morning.
This follows the release of the gaming technology company's half year results after the market close on Monday.
How did Ainsworth Game Technology perform in the first half?
During the six months ended December 31, the Aristocrat Leisure Limited (ASX: ALL) rival reported a 9% decline in revenue to $107.3 million.
This was largely the result of declines in the North America and Latin America markets. Revenues fell 6% and 8%, respectively, in these markets. Domestic revenues were flat at $19.5 million.
Intense competition and product mix changes put pressure on its margins during the half. The company's EBITDA margin fell from 25% last year to just 14% during the first half. This led to underlying EBITDA, adjusted for currency and significant items, falling 28% on the prior corresponding period to $17.2 million.
On the bottom line, excluding currency and one-off items, the company reported an underlying loss before tax of $0.2 million. This is significantly better than the half year guidance from its annual general meeting in November for a loss of $4 million.
Cash flow from operations reduced to $17.9 million. As a result, the Ainsworth Game Technology board decided to defer the reinstatement of the dividend policy at the present time.
Outlook.
Chief Executive Officer, Mr Lawrence Levy said: "At the AGM in November we laid out our six key priorities to strengthen AGT to deliver improved results. I am pleased to report we are making progress on each of these measures. The transition is in progress to make AGT more profitable and efficient."
"We are re-evaluating R&D, increasing our game development resources, sharpening our sales and marketing focus and complementing organic growth with selective acquisitions. We are busy building the foundations and expect return to profitability to deliver a positive net profit in the second half of FY20, with better results in FY21," he added.
