Placing Ainsworth Under Review as Pokies Sales Grind to a Halt

We place Ainsworth under review to assess the firm's diminishing competitive position following the release of fiscal 2020 results. Ainsworth declared an underlying net loss after tax of AUD 30 million compared with our forecast for a AUD 2 million loss. Revenue for the year fell 36% to AUD 149 million, with the impact principally felt in the second half. Sales in the second half were down over 60% compared with both the first half of fiscal 2020 and the second half of fiscal 2019. Electronic gaming machine, or EGM, sales have been particularly hard-hit by the coronavirus-induced shutdowns of most of the firm's customers. We anticipate Ainsworth's customers have been slowing capital expenditure prior to shutdowns in order to protect balance sheets, grinding EGM sales to a halt.