Australian slots supplier Ainsworth Game Technology (AGT) has warned that it expects to include a non-cash impairment of goodwill in the amount of AU$43.1 million (US$30.0 million) in its financial results for FY25 following a review of its North American Cash Generating Unit (CGU). The impairment relates to the acquisition of Nova Technologies in 2016 and MTD Gaming Inc in 2020 – both part of the CGU – and is a result of the underperformance of the North American CGU in FY25, AGT explained.
This underperformance has, the company added, caused AGT to revise its growth assumptions for the North American CGU which have been reflected in the company’s impairment assessment, resulting in a deficiency in the recoverable amount compared to the carrying value of this goodwill asset at the reporting date.
AGT also said it expects to report one-off losses amounting to AU$22.7 million (US$15.8 million), primarily due to net foreign currency losses, transaction costs relating to the terminated scheme of arrangement involving parent company Novomatic AG and off-market takeover offers, and the impairment of other non-current assets relating to Online CGU.
As such, AGT said it expects to record an underlying EBITDA for FY25 of approximately AU$48.0 million (US$33.4 million), similar to FY24, with underlying EBITDA margin falling from 18.3% to 16.5%. The lower margin has, the company added, resulted in further pressure on operating cash flows due to lower sales than anticipated.
AFT also expects to report an underlying Profit before Tax, excluding currency and one-off items (Underlying PBT), of approximately AU$21.0 million (US$14.6 million) for FY25, slightly lower than the AU$21.5 million (US$15.0 million) estimate previously provided.
Notably, AGT said the goodwill impairment from its North American CGU will not affect the company’s US-based operating subsidiary’s ability to meet financial covenants tied to an existing Western Alliance Bancorporation secured loan facility.
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