GGRAsia – Slot maker Ainsworth flags yearly loss, cuts 67 jobs

Slot maker Ainsworth flags yearly loss, cuts 67 jobs

Aug 20, 2020 Newsdesk Industry Talk, Latest News, Top of the deck

Australia-based slot machine maker Ainsworth Game Technology Ltd said in a business update on Thursday that it expected to record an adjusted net loss before tax of approximately AUD34 million (US$24.4 million) in the fiscal year to June 30, amid Covid-19.

It also said the results – still to be audited – would confirm 67 redundancies: 23 in Australia and 44 in the Americas, due to produce “an annualised cost saving of AUD6.4 million”.

“In addition, 40 roles have been eliminated at a further cost saving of AUD3.8 million per annum,” added the group.

The group also said executive-level employees “voluntarily” took 20-percent reductions in base salaries for the June quarter, and that had been extended to the September quarter.

The chairman had also “waived” his fees for the June quarter and had agreed to a 20-percent reduction for the September quarter. Other paid directors had taken a 20-percent reduction in fees for the June quarter, which had been extended to the September quarter.

The firm noted in the filing to the Australian Securities Exchange, that a debt facility with Australia and New Zealand Banking Group Ltd was “in the process of being restructured”.

“Customers across all Ainsworth Game’s markets suspended operations from mid-March. Some reopenings of customers’ facilities have occurred since that time, although venues have reduced capital expenditure” due to visitor numbers “being well below pre-pandemic levels,” said the update.

Ainsworth Game’s likely fiscal-year loss excluded “one-off costs”. They involved: a AUD12-million, non-cash impairment charge relating to Latin America; costs related to the Australian federal government’s “JobKeeper” scheme in response to the Covid-19 crisis; and costs associated with the US$26-million acquisition in March of United States-based MTD Gaming Inc.

Thursday’s announcement said Ainsworth Game expected fiscal-year revenues of AUD149 million, a decline of 36 percent versus the prior financial year.

The firm did note however that it anticipated positive adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of AUD2.9 million for the reporting period. Though it said that figure excluded a “one-off impairment charge”.

The group said its net debt as of June 30 was AUD17.5 million. It had AUD26.5 million in cash as of June 30.

The filing cited Ainsworth Game’s chief executive, Lawrence Levy, as saying: “While Covid-19 hit our industry hard, we moved quickly to protect Ainsworth. We took proactive measures to streamline our overheads and we are securing more flexible financing arrangements to ensure we can endure a protracted downturn.”

He added: “Ainsworth Game is now well positioned as customers across our major markets look to recover from the effects of the pandemic”.