Why Did Ainsworth’s Revenue Soar Yet Profit Plunge 65% in H1 2025?
Ainsworth Game Technology reported a robust 25% increase in revenue for the first half of 2025, driven by strong land-based sales and new product launches, but statutory profit plunged 65% due to foreign exchange losses and one-off transaction costs. The company’s strategic acquisition by Novomatic advances as shareholder approval looms.
- Revenue up 25% to AUD 152.1 million
- Statutory profit after tax down 65% to AUD 4.9 million
- Underlying profit before tax stable at AUD 13.9 million
- North America remains largest market with 55% of revenue
- Novomatic acquisition scheme progressing, subject to approvals
Revenue Growth Driven by Land-Based Sales and New Product Launch
Ainsworth Game Technology Ltd (ASX, AGI) has reported a significant 25% increase in revenue to AUD 152.1 million for the six months ended 30 June 2025. This growth was primarily fueled by strong land-based sales across its key markets, notably North America and Asia Pacific. The release of the TM Raptor cabinet in Australia earlier this year played a pivotal role in boosting sales volumes and average selling prices in the region.
Profitability Impacted by Foreign Exchange and One-Off Costs
Despite the revenue surge, statutory profit after tax fell sharply by 65% to AUD 4.9 million. The decline was largely attributed to foreign currency losses of AUD 8.6 million, reflecting a weaker US dollar against the Australian dollar at the reporting date. Additionally, one-off costs related to the ongoing Novomatic acquisition transaction, amounting to AUD 1.6 million, further weighed on profitability. The company’s underlying profit before tax remained steady at AUD 13.9 million, indicating operational resilience when excluding these factors.
Segment Performance Highlights and Margin Pressures
North America continues to be Ainsworth’s dominant market, contributing 55% of total revenue with AUD 83.1 million. The segment saw growth in Historical Horse Racing (HHR) units connected to its system, rising to 10,496 units, which generate recurring revenue streams. However, margins were pressured by a shift in product mix and competitive conditions, particularly in Latin America and Europe, where import restrictions and economic challenges persisted. The group’s gross margin declined to 56% from 67% in the prior corresponding period, reflecting a higher proportion of outright sales with lower margins and reduced online revenue following the termination of an exclusivity agreement.
Balance Sheet Strength and Financing Update
Ainsworth maintained a solid balance sheet with net cash of AUD 1.4 million as at 30 June 2025, down from AUD 9.7 million at the end of 2024. The company increased its secured bank loan facility with Western Alliance Bancorporation from US$50 million to US$75 million, providing ample liquidity to support growth initiatives. All financial covenants under this facility were met during the period.
Novomatic Acquisition Scheme Advances
Following the announcement of a scheme implementation deed with majority shareholder Novomatic AG in April 2025, the scheme booklet was registered with ASIC in July and dispatched to shareholders. The proposed acquisition of the remaining shares by Novomatic is subject to shareholder and court approvals, with the outcome expected to significantly shape Ainsworth’s strategic direction. The company has not declared any dividends during the period, reflecting a focus on reinvestment and transaction-related considerations.
Bottom Line?
As Ainsworth navigates currency headwinds and integration with Novomatic, investors will watch closely for margin recovery and the scheme’s final approval.
Questions in the middle?
- How will Ainsworth manage ongoing foreign currency volatility impacting earnings?
- What margin improvement strategies will the company deploy amid competitive pressures?
- What are the implications for shareholders if the Novomatic acquisition scheme is approved or rejected?
