Why has the Ainsworth Game (ASX:AGI) share price dropped 7% today?

The Ainsworth Game (ASX: AGI) share price fell 7% today on news the company expects a loss of $15 million in the first half of FY21.
The post Why has the Ainsworth Game (ASX:AGI) share price dropped 7% today? appeared first on Motley Fool Australia. –

A slot machine with a row of red, sad faces, indicating a drop in the share price for gaming companies

The Ainsworth Game Technology Limited (ASX: AGI) share price is down 7.1% at 32.5 cents today, on news the company expects to make a loss of $15 million in the first half of FY21. The slot machine manufacturer projects that depressed market conditions as a result of COVID-19 will continue to impact its business throughout the first half.

A more positive outlook for the second-half

Despite forecasting challenging market conditions for the first half, Ainsworth is optimistic that its business will improve in the second-half. 

The company says that based on the current landscape in North America, it anticipates improved performance as FY21 progresses. This improvement will be built on on the success of its HHR (Historical Horse Racing) products, as well as on its recent acquisition of MTD Gaming. Ainsworth purchased the United States-based MTD Gaming for US$26 million back in March this year. 

In Australia, the company says it sees encouraging initial market response to its new A-Star cabinet slot machine products.

Ainsworth did not release additional details when it announced earlier today that it expected to make a $15 million loss in the first half of FY21 but said this would be a year of two distinct halves. The first half would be about safety and security through the reopening phase. The second half about recuperation and development as the world entered the “new normal” phase.

The company will provide an update on its progress at half year results in February 2021.

How did Ainsworth Game fare in 2020?

Ainsworth’s FY20 results reflected the impacts of COVID-19. For full-year FY20, sales revenue was A$149 million, a decline of 36% compared to FY19. It reported a loss after tax for the year of $43 million. 

The company attributed these disappointing numbers to the suspension of some of its clients from mid-March, as a result of Government-ordered shutdowns of casinos and bars around the world, including in Australia. Since that time, some of its customer’s facilities have reopened. However, venues have reduced capital expenditure made by its customers due to patron numbers being well below pre-pandemic levels. 

The Ainsworth Game share price has lost more than half its value this year. The share price began the year trading at 80 cents, its highest level for the year. The Ainsworth Game share price reached its all-time high in 2017, when it was trading at $2.65. At today’s price of 32.5 cents, the company currently commands a market cap of $110 million. 

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why has the Ainsworth Game (ASX:AGI) share price dropped 7% today? appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!