Austrian gaming operator Novomatic has scrapped plans for an initial public offering due to regulatory uncertainty in its German market operations.
On Tuesday, Novomatic announced that this week’s proposed listing on the Frankfurt exchange would not proceed as planned. The listing was expected to value the company, which has over 26k employees based in 80 countries, at around €5b.
A Reuters source claimed the IPO was put off because of the slower than expected implementation of new German regulations regarding gambling halls, a market in which Novomatic holds a 53% share thanks to its Admiral brand. The company boosted its German presence this spring via the acquisition of slots hall operator Casino Royal.
The new rules require gambling halls to be up to 500m apart from each other, and each hall will be limited to 12 electronic gambling machines (EGM). Novomatic has previously stated that, while it expects these new rules to trim its German EGM footprint by up to 30%, it also expects the remaining machines will get more use.
Another factor in Novomatic’s decision to postpone its public float is the ongoing delay in closing its acquisition of Australian gaming device maker Ainsworth Game Technology (AGT). The deal, which was struck in February 2016, was seen as key to expanding Novomatic’s reach into markets in the US, Latin America and Australasia.
At the end of August, Novomatic reported revenue of €1.2b in the first six months of 2017, an 11.3% improvement over the same period last year and a new company record. However, H1 earnings were down 1.6% to €282.5m and profit fell 29% to €56.3m as higher taxes in Italy and Austria took their toll.
Novomatic counted nearly 2,100 gaming venues (including casinos, sports betting shops, and slots and bingo halls) at the end of H1, up from 1,800 last year. The company’s complement of EGM was also significantly higher, adding around 9k units for a total of 70,700.