Covid-19 pushes Ainsworth to Aus$39.6m full-year loss

Australian gaming machines and content provider Ainsworth Game Technology (AGT) has posted an Aus$39.6m (£21.8m/€24.3m/US$29.0m) comprehensive loss for its 2020 financial year, after the group’s operations were hit by the novel coronavirus (Covid-19) pandemic.

Revenue for the 12 months to 30 June amounted to $149.4m, down 36.2% from $234.3m in the corresponding period last year.

North America was the main source of income for AGT, with revenue totalling $72.0m, though this was 36.8% lower than $114.0m in 2019.

AGT said this drop was primarily due to reduced unit sales as a result of Covid-19, but also noted that orders for its machine are likely to be deferred to FY21 and as such it should see improvement next year.

Latin America revenue was also down by 42.5% to $42.0m, mainly as a result of land-based closures across Argentina, Mexico and Peru due to the pandemic, as well as the delayed launch of its new AStar gaming hardware.

Revenue from Australia and the rest of the world slipped 27.1% year-on-year to $35.0m, as AGT noted declines across all of its core markets in the segment.

However, AGT did see some growth within its online and digital operations, with revenue here rising from $4.2m to $4.6m. This area of the business was boosted by the launch of its technology with several operators in New Jersey in the US, while AGT and extended deal with Zynga will help drive further growth in FY21.

During the latter part of the financial year, AGT implemented a series of cost-saving measures to help mitigate the impact of Covid-19 on its business. This included eliminating 107 roles across the group, which it said would help save approximately $10m.

Looking more closely at spending, cost of sales was down by 37.5% to $59.0m, while sales, services and marketing expenses were reduced by 8.6% to $59.3m, and administrative costs 11.6% to $22.2m.

However, research and development spend during the year edged up to $41.2m, while impairment trade expenses rocketed by 289.7% to $3.4m and other costs increased 244.4% to $15.5m.

As costs were higher than revenue, this left AGT with a $50.3m operating loss, compared to a $5.4m operating profit at the end of FY19. When including $1.5m in finance income, loss before tax was $48.8m, a stark contrast to $10.9m in profit last year.

AGT received $5.4m in tax benefits, and when also including $3.9m in income directed from foreign current translation, this resulted in a comprehensive loss of $39.6m, compared to a $19.2m profit in FY19.

Chief executive Lawrence Levy said that while Covid-19 hit the business and the industry hard, the group was able to move quickly to protect its operations.

“We took proactive measures to streamline our overheads and restructure previous financing arrangements to ensure we can endure the current downturn,” he said. “AGT is well positioned as customers across our major markets look to recover from the effects of the pandemic.”