Ainsworth topples Aristocrat from pokies throne

POKER machine maker Ainsworth Game Technology yesterday pipped its cross-town rival , Aristocrat Leisure, with its second profit upgrade this year.

By InvestSMART · 26 Aug 2011

By InvestSMART ·
26 Aug 2011

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POKER machine maker Ainsworth Game Technology yesterday pipped its cross-town rival , Aristocrat Leisure, with its second profit upgrade this year.

After a 17 per cent share price jump on Wednesday, Ainsworth put out an announcement reporting an unaudited $23.1 million net profit for the financial year ending June 30, 2011 compared with a $2.7 million loss for the prior year. Excluding the benefit of tax losses, AGI's net profit was $14.6 million. In May, the company upgraded its earnings forecast to a range of $11 million to $13 million.

Aristocrat reported that its profit forecast for the year ending December 31 this year remained intact, although this relies on the Australian dollar remaining at parity with its US counterpart for the current half year.

The company reported a net profit after tax of $24.9 million down from $49.3 million for the prior half year while revenues dropped to $312.7 million from $340.5 million. The company declared a 2.5? unfranked dividend payable on September 30 and also announced a dividend reinvestment plan.

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Frequently Asked Questions about this Article…

Why did Ainsworth Game Technology's share price jump 17%?

Ainsworth's shares jumped after the company announced its second profit upgrade this year and reported an unaudited net profit of $23.1 million for the year ended June 30, 2011 (compared with a $2.7 million loss the prior year). The stronger profit result and upgraded outlook drove the share-price move.

How much profit did Ainsworth report for the 2011 financial year?

Ainsworth reported an unaudited net profit of $23.1 million for the year ended June 30, 2011. Excluding the benefit of tax losses, the company's net profit was reported as $14.6 million.

What was Ainsworth's prior earnings guidance before the final result?

In May the company upgraded its earnings forecast to a range of $11 million to $13 million. The final unaudited net profit announced was higher than that May guidance.

How did Aristocrat Leisure perform in its recent half-year results?

Aristocrat reported a net profit after tax of $24.9 million for the recent half year, down from $49.3 million in the prior half. Revenues fell to $312.7 million from $340.5 million over the same comparison.

Is Aristocrat's profit forecast still intact and what currency risks did it mention?

Aristocrat said its profit forecast for the year ending December 31 remains intact, but the company noted this outlook depends on the Australian dollar remaining at parity with the US dollar for the current half year.

Did Aristocrat announce a dividend or dividend reinvestment plan (DRP)?

Yes. The article reports Aristocrat declared a 2.5 unfranked dividend payable on September 30 and also announced a dividend reinvestment plan (DRP).

What should everyday investors take away from the Ainsworth vs Aristocrat update?

Investors can note that Ainsworth has swung to a reported profit and upgraded earnings guidance this year, triggering a strong share-price reaction, while Aristocrat experienced lower profits and revenue in the recent half year and flagged currency sensitivity. Also consider the presence of a dividend and DRP at Aristocrat when comparing income and capital outcomes.

Were Ainsworth's profit figures audited and are there adjustments investors should be aware of?

Ainsworth's announced $23.1 million net profit was described as unaudited. The company also disclosed an adjusted figure excluding the benefit of tax losses, which reduced net profit to $14.6 million—an important detail for investors assessing underlying earnings.