It was probably a co-incidence yesterday, but as Aristocrat (ALL) shares were basking in the glow of a higher dividend and solid rebound in 2015 earnings, its smaller local rival was seeing its shares battered after the surprise retirement of a key executive.
The broker has reviewed Dec Q performance across 47,000 slot machines in Australia and found Aristocrat Leisure continues to have the most popular titles, with new game performance 1.3x the floor average. Ainsworth Game Technology continues to underperform at 0.8x, while for other competitors the numbers are hit and miss.
Feedback from casino operators and competitors suggests the company’s North American business can deliver growth in sales and participation. Macquarie also observes Australian ship share looks to a stabilised although game performance is yet to recover.
Ainsworth has outperformed the ASX300 by 42% in the past six weeks, driven by hype around new game releases and particularly the highly anticipated Pac-Man offering, UBS notes. While the stock has been neglected and was due a bounce, the broker believes the market is factoring in a too ambitious broad game improvement.
Ainsworth posted a 57% fall in profit, in line with guidance and the broker. No dividend was announced. FY guidance implies an immediate turnaround but while the broker has lifted forecasts, the numbers are still short.