The CEO of Australian slot machine supplier Ainsworth Game Technology, Lawrence Levy, says the company is well positioned to ride out the COVID-19 pandemic after implementing a series of cost minimization measures in recent months.
Releasing a business update late Thursday ahead of next week’s FY20 results announcement, where the company anticipates revealing an AU$34 million net loss before tax, Ainsworth outlined several initiatives across its key Australian and US markets, including a voluntarily 20% reduction in base salaries for executive management for the June and September quarters and a waiving of all fees by Chairman Danny Gladstone through 30 June. The company has also negotiated rent relief at its Sydney headquarters – comprising a full waiver for the June quarter and 50% reduction for the remainder of 2020.
There have been a combined 67 redundancies in Australia and the US saving AU$6.4 million, another 40 roles eliminated completely saving AU$3.8 million and 126 US-based employees and contractors placed on furlough, with a freeze on all new hires.
“While Covid-19 hit our industry hard, we moved quickly to protect Ainsworth,” 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. AGT is now well positioned as customers across our major markets look to recover from the effects of the pandemic.”
Ainsworth said it expects to report a 36% year-on-year decline in revenues in FY20 to AU$149 million, of which just AU$42 million was accrued during the six months to 30 June – down 63%. Adjusted EBITDA is expected to be AU$2.9 million.
Ainsworth has cancelled its FY20 final dividend.
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