Ainsworth Game Technology (AGT) anticipates a 36 percent drop in revenue for the fiscal year to June 30th, 2020, as the Sydney-based gaming machine maker also states that its results will reflect a range of redundancies, and is yet to be audited.
The company stipulates that 67 redundancies, 23 in Australia and 44 in the Americas, will carry annualized cost savings of AU$6.4 m, in expectation of sales to finish at AU$149 m. A further 40 roles were also eliminated with an additional cost saving of AU$3.8 m per annum.
Efforts to implement a number of cost-saving measures to ensure the company can sustain a prolonged downturn are also expected to result in a positive adjusted AU$2.9 m EBITDA.
Adjusted net loss before tax is expected to close at $34 million, excluding one off-cost including non-cash impairment charges, work keeper and MTD acquisition costs incurred in March 2020.
In addition , the company has implemented various cost minimisation measures throughout its final quarter to assist with the impact of the COVID-19 pandemic and the restrictions established in global markets.
These include an increased 20 percent reduction in executive base salary, the chairman waiving his fees for the June quarter and committing to a 20 percent reduction for the September quarter, and other paying directors having taken a 20 percent reduction in salaries.
AGT also noted that a AU$44 m debt facility with Australia and New Zealand Banking Group “is in the process of being amended with covenants being revised to minimum liquidity levels and quarterly sales targets.”
Customers across all AGT markets have suspended operations since mid-March, with some reopenings since although venues have reduced CAPEX because visits are well below pre-pandemic levels.
AGT CEO Lawrence Levy explained: “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. AGT is now well positioned as customers across our major markets look to recover from the effects of the pandemic.”
The AGT expects to release preliminary, unaudited FY20 results after market closure on 27 August 2020 and anticipates release of audited results in September 2020.