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- Due to impacts of COVID-19, Ainsworth Game Technology (AGI) is expecting a 36 per cent revenue loss for the 2020 financial year
- It was the second half of FY20 that saw the biggest decline in revenue, with a 63 per cent drop to $42 million compared to $116 million in the prior corresponding period
- The underlying net loss before tax is expected to be approximately $34 million
- Ainsworth implemented a number of cost saving measured to mitigate the financial impacts
- These includes management and directors taking a 20 per cent pay cut as well as 67 redundancies
- Ainsworth will cancel its final dividend to make sure the company is well placed
- The company will report its preliminary, unaudited FY20 results next week and anticipates to release its audited results in September
- On market close, Ainsworth is down 1.30 per cent and is trading for 38 cents
Gaming machine manufacturer Ainsworth Game Technology (AGI) is expecting a revenue loss for the 2020 financial year mainly due to the COVID-19 pandemic.
Subject to audit completion, the company is expecting a revenue of $149 million, which is a decline of 36 per cent on the 2019 financial year. It was the second half of FY20 that saw the biggest decline in revenue, with a 63 per cent drop to $42 million compared to $116 million in the prior corresponding period.
Ainsworth expects to report an underlying net loss before tax of approximately $34 million, subject to audit completion and excludes non-cash related impairment charges. The loss also excludes one-off costs and JobKeeper subsidies.
Ainsworth customers suspended operations from mid-march. Since that time, some of its customer’s facilities have reopened. However, venues have reduced capital expenditure due to visitations being well below pre-pandemic levels.
During this time, the company implemented a series of cost-saving measures to ensure the company can endure an extended downturn.
These measures included 67 residencies across Australia and in the Americas, at an annualised cost saving of $6.4 million. In addition, 40 roles have been eliminated to save a further $3.8 million per annum.
The company’s executive management and paid directors also took 20 per cent reductions in their base salaries for the June quarter which has now been extended until the September quarter.
“While COVID-19 hit our industry hard, we moved quickly to protect Ainsworth,” CEO Lawrence Levy said.
“We took proactive measures to streamline our overheads and we are securing more flexible financing arrangements to ensure we can endure a protracted downturn. Ainsworth is now well-positioned as customers across our major markets look to recover from the effects of the pandemic,” he added.
Ainsworth will cancel its final dividend to make sure the company is well placed.
Following the repayment of borrowing in the first half of FY20, the company finished FY20 with $42 million in cash.
The company will report its preliminary, unaudited FY20 results next week, on August 27 and anticipates to release its audited results in September.
On market close, Ainsworth is down 1.30 per cent and shares are trading for 38 cents each.
