Ainsworth Game Tech (ASX:AGI) share price rises after 71% revenue increase

The Ainsworth Game Technology share price is rising by 2.5% today after posting a 71% increase in revenue.

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The Ainsworth Game Technology Limited (ASX: AGI) share price is up by 2.75% today after the company posted a 71% increase in revenue over the first half of this financial year.

At the time of writing, Ainsworth shares are trading hands for 82 cents apiece.

What did Ainsworth report today?

Earlier today, Ainsworth released its half year report and investor presentation for the period ended 31 December 2020. The company advised it earned $72.1 million in FY21 compared to $42 million over the corresponding period in FY20. Ainsworth designs and manufactures pokies and lottery machines, and gaming shut downs across the world due to COVID-19 continue to hurt the business.

The company registered a statutory loss after tax of $50.1 million and currency translation loss of $13.4 million in the first half of FY21. Its earnings per share fell to -14.9 cents and its earnings before interest, tax, depreciation and amortisation (EBITDA) was -$36.8 million.

Its biggest losses took place in Latin America, where it lost 85% of its revenue from July to December 2020. The company predicts this will continue to worsen as the region struggles to deal with COVID-19, but is beginning to shed its leased assets in the area.

In positive news for investors, its other international sales remain strong and contribute 73% of its revenue. 

Ainsworth also refinanced its $50 million loan facility with a US-based bank, Western Alliance Bancorporation on 18 February 2021 with a loan period of five years. Ainsworth reduced its total assets base by nearly $70 million from June 2020 to December 2020, primarily due to recognition of impairment losses related to property, plant equipment and leased assets. 

The company advised it will continue to suspend its dividend to increase its own cash reserves.

Ainsworth share price in a nutshell

The Ainsworth share price has a bullish price-to-earnings (P/E) ratio of 20.92.

Over the past 12 months, we've seen the Ainsworth share price rise from around 40 cents to over 70 cents per share, but that's still a long way off its decade highs.

It was priced at $4.50 in 2013 and has steadily declined from that point until November 2020, when it began its current recovery.

Earnings gains backed by MTD Gaming acquisition

The company's half year report says its acquisition of MTD Gaming has had an "immediate and positive impact on EBITDA".

MTD is a developer and supplier of poker, keno and video-reel content. It provides Ainsworth access to multi-game and video lottery terminal markets and expands its existing hardware offering with the Apollo cabinet it manufactures.

Its Australian performance has improved on a small existing base, increasing revenue 118% compared to second-half FY20 of $8.8 million.

Ainsworth's own outlook

The company believes its North American operations will gradually return to pre-COVID levels by the end of 2022, with Australia recovering quicker and Latin America more slowly.

Ainsworth is insistent that it will continue to cut its operational costs without affecting its deliverables market. It also aims to introduce six new brands and lottery games worldwide, while simultaneously re-entering the West Australian market.

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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