Ainsworth AGM reveals investor divide after takeover battle
Australian gaming machine manufacturer Ainsworth Game Technology’s annual general meeting highlighted continuing divisions among shareholders, after a board nomination backed by minority investor Kjerulf Ainsworth failed to win support and several company-backed resolutions faced opposition from about one-quarter of voters.
The strongest opposition emerged over a proposal to elect former AGT chief executive Samuel Lawrence Levy as a non-executive director. Levy secured only 25.18 per cent of proxy votes in favour, while 74.82 per cent were cast against the proposal. Open proxies controlled by the chair were also voted against it. The voting outcome followed months of takeover and ownership activity involving the company.
Shareholder battle leaves divided vote
In his AGM address, chair Danny Gladstone discussed the corporate activity involving AGT during 2025, including a takeover offer from Novomatic AG and proportional takeover offers launched by Kjerulf Ainsworth.
Kjerulf Ainsworth’s offers were priced at AU$1.30 (US$0.85) per share, above Novomatic’s AU$1.00 (US$0.65) takeover proposal. Gladstone told shareholders those activities had now concluded and that AGT would continue operating under its existing strategies.
Despite most resolutions being carried, voting patterns showed a sizeable dissenting group remained among shareholders. Roughly 25 per cent of proxy votes opposed several resolutions, including the re-election of directors, the remuneration report, constitutional amendments and the renewal of proportional takeover provisions.
The company’s remuneration report also recorded a first strike under Australia’s Corporations Act after more than 25 per cent of shareholders voted against the proposal.
R&D spending comes under scrutiny
During the meeting, Gladstone addressed shareholder concerns over AGT’s research and development spending and the returns generated from those investments. He said continued R&D investment was needed to meet technical testing and regulatory requirements across gaming markets.
He said the company needed to continue investing in technology and product development to maintain and improve market share in increasingly competitive markets.
Chief executive Ryan Comstock told shareholders that R&D expenditure represented about 17 per cent of group revenue during FY2025. He added that R&D spending during the first half of 2026 was expected to increase by about 7 per cent year-on-year and represent around 22 per cent of total revenue.
The company said continued investment supported the rollout of its A-Star Raptor cabinet platform across multiple regions.
Revenue rises in 2025 but North America weakens
AGT reported FY2025 revenue of AU$290.8 million (US$189 million), up 10 per cent year-on-year. Underlying EBITDA remained broadly stable at AU$48 million ($31.2 million), while underlying profit before tax reached AU$21.1 million ($13.7 million).
However, the company recorded a statutory loss after one-off items, including impairment charges, transaction costs linked to takeover activity and currency translation losses.
North America remained AGT’s largest market, generating revenue of AU$151.3 million ($98.3 million) during FY2025. The region contributed more than half of the total group revenue.
Still, AGT warned that trading conditions had weakened in early 2026. Revenue for the first half of 2026 is expected to fall to around AU$116 million ($75.4 million), compared with AU$138.7 million ($90.2 million) in the second half of 2025.
According to the company, weaker outright sales, lower gaming operation placements and stronger competition in North America were the main reasons for the decline.
Underlying EBITDA for the first half of 2026 is expected to fall to around AU$13 million ($8.5 million), down from AU$26.9 million ($17.5 million) a year earlier.
The company said positive operating cash flow was still expected during the period, although increased investing and financing outflows would likely push net debt to about AU$14 million ($9.1 million).
Asia Pacific growth offsets pressure elsewhere
AGT reported stronger performance in the Asia Pacific region, where revenue increased 52 per cent year-on-year to AU$65 million ($42.2 million). The company attributed the increase to the rollout of the A-Star Raptor cabinet in Australia, higher unit sales and stronger game performance.
The company said all six game titles launched with the cabinet had performed above house average since rollout.
Latin America and Europe generated revenue of AU$69.3 million ($45 million), up 4 per cent from the previous year, although profitability in the region declined because of product mix changes and higher costs linked to sales of newer cabinets.
AGT also said import restrictions in Mexico continued to affect operations, although stronger sales in Argentina partly offset the impact.
Comstock confirmed as permanent CEO
The AGM also marked one of the first major shareholder meetings since Ryan Comstock was formally appointed chief executive earlier this month. Comstock had served as acting CEO since October 2025 following the resignation of former chief executive Harald Neumann. The company said the board reviewed his performance during the six-month acting period before confirming him in the role permanently.
Ainsworth said Comstock joined the business in 2012 and had served as chief operating officer since 2018.
Under his contract, Comstock will receive a base salary of US$625,000 per year and remain eligible for short-term and long-term incentive arrangements tied to company performance.
Ownership structure remains unchanged
Despite recent takeover activity, Novomatic remains AGT’s majority shareholder. As of early May, the Austrian gaming technology group owned 67.39 per cent of the company’s ordinary shares. The AU$1.00 ($0.65) per share offer to increase ownership to 75 per cent ended in February 2026 without achieving that level.
Kjerulf Ainsworth, son of company founder Len Ainsworth, increased his own stake to 8.35 per cent following the close of his latest proportional takeover offer in April.
His offer targeted 5.5 per cent of each shareholder’s holdings and formed part of a broader strategy to increase ownership through partial acquisitions rather than a full takeover bid.
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