TATTS DIVESTS UK SLOTS BUSINESS FOR $210M
Written on the 27 June 2016
TATTS Group (ASX:TTS) has divested its 'struggling' UK-based slots business for $210 million in the wake of Britain voting to withdraw from the European Union.
The Brisbane-based wagering company sold Talarius Limited to gaming outfit Novomatic UK, which is expected to result in an accounting loss of $50 million.
Novomatic will gain the economic contribution of the business from March 19 this year under the terms of the sale.
Talarius, which operates gaming machines in high street and motorway venues across the UK, contributed less than 2 per cent of Tatts' earnings in FY15 at $6.2 million.
Tatts CEO and managing director Robbie Cooke (pictured) says the funds will be used to repay the company's UK debt facilities.
"The sale of Talarius follows three years of intense effort to improve the performance of a business that struggled since its acquisition by Tatts back in 2008," Cooke says.
"Our patience in repositioning the business has seen it become a very attractive asset in a highly competitive gaming segment in the UK and has provided a path to maximising shareholder value.
"As a large international gaming group, Novomatic is the logical acquirer of the business - its established UK position, deep industry knowledge and synergy opportunities makes it a natural owner of the asset.
"I am pleased to say this step completes the transformation of Tatts' gaming unit to a pure B2B business, entirely focused on providing gaming monitoring and other services to gaming operators."
Tatts has updated its profit forecast to be in between $255 and $265 million following the sale of Talarius.
Statutory profits will also be impacted by an $18.6 million tax interest charge relating to the Victorian government's successful appeal regarding the company's pokies license in High Court, as well as $4 million in legal fees.