On Monday, Tatts announced that Novomatic UK had agreed to buy Talarius, which operates Quicksilver-branded slots venues. Tatts said it expects to realize a net gain of £111m from the transaction. The deal gives Novomatic the economic benefit of the Talarius business as of March 19, 2016.
Talarius’ contribution to Tatts fiscal 2015 earnings was a mere A$6.2m, less than 2% of total earnings, and Tatts says the sale won’t have a material impact on its continuing earnings per share. Tatts said the divestment will result in a non-cash accounting loss of A$50m in the company’s fiscal 2016 numbers.
Tatts acquired Talarius back in 2008 and Tatts CEO Robbie Cooke says the company made an “intense effort” over the last three years “to improve the performance” of the slots business. Now that it has become “a very attractive asset in a highly competitive gaming segment,” the time was right to sell.
The sale reduces Tatts’ gaming unit to the Maxgaming electronic gaming services division and the Bytecraft technical support services business, meaning Tatts’ gaming unit no longer has a B2C component.
Tatts also offered the markets a trading update on its FY16 numbers for the 11 months up to May 31. Overall growth in Tatts’ mainstay lottery operations was up 8.7% over the same period last year, while wagering turnover rose 4.2%.
In keeping with recent trends, Tatts’ online operations reported the most significant growth, with online lottery sales up one-third, representing 13.5% of all sales. Similarly, online wagering was up nearly 23%, representing 30% of sales.
When the final FY16 numbers are released on August 18, Tatts expects net profit after tax to come in between $255m to $265m, excluding the Talarius contributions.