Lotteries and wagering firm Tatts Group has sold its struggling UK-based slot machine and internet gaming operator Talarius to Novomatic UK for $210 million, and will take a loss on the sale.
Tatts said in a statement to the ASX yesterday that the sale would result in an accounting loss of about $50 million in the 2016 full financial year which would mean it will miss most analyst earnings estimates.
The company’s shares fell by close to 4% at the opening to $3.71, their lowest level since April 15, but rebounded as the wider market recovered and ended at $3.86, steady on the day.
“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,” Tatts chief executive Robbie Cooke said in the statement.
Without the earnings contribution from Talarius, Tatts expects fiscal 2016 profit from continuing operations to be in the range of $255 million to $265 million, slightly less than analysts’ forecasts of between $259 million and $282 million.
Net profit will include a $50 million loss incurred on the sale of Talarius, as well as $22.6 million of tax interest and legal fees related to a dispute with the Victorian government over Tatts’ slot machine licence.
And it is the second deal involving Novomatic and an Australian poker machine business.
Market reports yesterday say the Austria-based gaming machine group had managed to win control of Ainsworth Game Technology via the purchase of a 52.2% stake held by Len Ainsworth. The deal will need regulatory approvals.
It was clinched at a meeting of Ainsworth Game shareholders in Sydney yesterday and came after lengthy legal action, especially from a leading hedge fund, Fortress Investment Group.
