Gambling and wagering company Tatts Group (ASX:TTS) has written down the value of the investments in its UK business and its NSW software assets by a combined $165 million.
The company said it planned to reduce the book carrying value of its Talarius investment by $140 million as the result of the emergency UK VAT tax increase, which has made the immediate outlook for the consumption spending uncertain.
The business had already been struggling as a result of the global financial crisis, but Tatts had been pouring funds into it in anticipation of recovery.
But the tax hike has made Talarius' prospects less certain during the upswing, Tatts said.
As a result of the charge, the carrying value of Talarius is now $180 million.
The company also plans to take an additional $25 million non-cash amortisation charge for the software used to monitor jackpots on gaming machines in NSW, as a result of a plan to upgrade the underlying IT applications powering the system.
Tatts said it still intends to declare a dividend even after the charges, and expects the dividend to be no lower than the one paid for FY09.
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