Tatts Group Sells its UK Pokies Business
The UK business has been struggling since it was acquired by the company and Tatts has announced they plan to use the proceeds from the sale to pay down debt. On Monday, Tatts said that the sale would lead to an accounting loss of around $50 million for the 2016 financial year.
“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,” said Robbie Cooke, chief executive of Tatts, in a statement to the ASX.
Talarius contributed $6.2 million, less than 2 percent, of Tatt’s earnings during the 2015 financial year. The company is not expecting the sale, after repaying debt, to have a significant impact on continuing earnings. The company will include the contributions from Talarius as a discontinued operation up until the date of sale (March 19, 2016) when posting its full-year financial results.
In its trading update, Tatts acknowledged other factors that would impact its financial results for the 2016 financial year. These would include non-recurring items such as charges incurred following a court appeal it lost regarding its Victorian pokies license. The company was ordered to pay $18.6 million in after-tax interest charges plus $4 million in legal fees. Taking into account the High Court decision, Tatts is expecting a net debt of $1.05 billion.
Excluding Talarius, Tatts reported its continuing operations are expected to post a net profit of between $255 million and $265 million for the 2016 financial year, which is slightly lower than the $259 million to $282 million projected by analysts.
March 23, 2017