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.
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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.
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