Public

Ainsworth Game Technology (AGI) 2015 AGM Report

Company/ASX Code : Ainsworth Game Technology Limited (AGI)
Venue :
11am Grace Hotel (Wilarra 1 Room)
Level 2, 77 York St
Sydney, New South Wales
Monitor : Ms Carol Limmer
AGM Details / NoM : Tuesday 17th November, 2015
# of Attendees : 50
# Holdings represented by ASA : 50
Value of Proxies : $288,000
# Shares Represented by ASA : 96,000
Market Capitalisation : $900 million

The Chairman, Len Ainsworth, spoke briefly about AGI’s financial performance, highlighting that the organisation has been aiming to be building a stronger, more diversified and profitable global gaming and technology Group and that FY 15 is the 6th consecutive year of profit growth.

The Chairman announced their proposed acquisition of US company, Nova Technologies LLC, which has a certified and proven Class II Bingo Server and an extensive library of games and software support. Nova has recurring revenues from about 1300 units and will effectively double AGI’s footprint of units in USA. Purchase price is USD 38m – to be financed from operating cash flows and a new credit approved ANZ loan facility. This proposed purchase is consistent with AGI’s strategy to leverage into Class II market and build greater profitability and higher quality earnings. This proposed purchase received some media coverage following the meeting.

An architect’s drawing of their new North America manufacturing HQ was shown – likely opening in 2nd half FY 16.

The Chairman also announced the proposed appointment of a new female independent NED (current Board is all male), Heather Scheibenstock, who has significant experience in local and international gaming and leisure industries. She is expected to commence mid-January, subject to regulatory approvals and procedural formalities. 

Mr Ainsworth sees FY16 as another progressive and prosperous year for AGI with continuing focus on the execution of their strategies of new products (such as A600), new games and technologies to leverage across their platforms, new jurisdictions and licences, Nova (complementary and accretive fit creating an increased presence in Class II and Class III gaming in key Americas market), growing online business and their new US facility (providing opportunity to raise profile and presence in Americas). 

The CEO gave further details on the financial highlights within the context of ‘good results in a challenging year’. Included was a breakdown of sales and profit by region with the comment that they are now well established in international markets, with momentum for further growth. He spoke about the new technologically advanced A600 machine introduced to the domestic market and the popular US market brands. The CEO also provided comprehensive detail on the proposed Nova deal as well as their online (Mobile, Tablet and Desktop) and online ‘social casinos’ businesses. He mentioned their intention to purchase the remaining 60% of Digital 616 in FY16. He is ‘quietly confident’ for the year ahead. CEO further mentioned that he expects a temporary margin decline (due mainly to aspects such as currency inflated componentry costs and increased investments) but margin improvement beyond FY16 year.

In relation to his proposed re-election, Mr MB Yates spoke with relevance as to his current and future contribution to the Board.

The ASA representative was only person to make comments/ask questions about remuneration, including having a higher percentage than 25% of STI deferred with deferral also into equity and using actual market value rather than ‘fair value’ calculation methodology for determination of LTI allocations.

Proxy numbers were shown prior to discussion/questions on each resolution. ASA was in favour of all resolutions which were subject to show of hands voting. All resolutions were passed with over 99% in favour.