Talarius plc has underscored its reputation as one of the UK’s most dynamic gaming stocks, following the £12m purchase of Leisurama Entertainments Ltd and Leisurama Holdings Ltd. The company’s 19 adult gaming centres (AGC’s) will be integrated into Talarius’ market-leading Quicksilver brand, which now totals 183 sites. The acquisition, which was announced to the London Stock Exchange on 3rd March, saw the Talarius share price rise to a high of 184.5p. Talarius will fund the acquisition from cash and existing bank facilities following the successful placing of six million shares in January 2006.

Leisurama’s portfolio of AGC’s and bingo lounges complements Talarius’ existing portfolio in the North of England. The acquisition takes Quicksilver to circa 10,000 gaming machines, one of the largest machine estates in the UK, which will allow it to continue deriving significant economies of scale. In the 52 weeks ended 31 December 2005, Leisurama had sales of £4.7m, generating normalised pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA) of £2.2m and operating profit of £1.7m. The consideration represents 5.1 times estimated EBITDA for the year end to 31 December 2006. Historically, the normalised 52-week pro-forma figures for Leisurama’s year-end to 30 April 2005 were sales of £4m, EBITDA of £1.5m and operating profit of £1m.

The positive sales trend identified for the Quicksilver business in the Pre-close trading announcement on 18 January 2006 has continued to strengthen. The integration of two previous acquisitions (Royals and Blackheath) has continued to progress to plan and the synergies being delivered provide management with confidence that savings and economies of scale will also be achieved in Leisurama.

The purchase of Leisurama marks a frenetic period of activity for the AIM-listed Talarius plc, which has invested a total of £42m in acquisitions over a seven-month period. The acquisition trail began in July 2005 with the purchase of the 13 Royals sites for a consideration of £10.65m, followed in November with a £19m acquisition of Blackheath Leisure’s 24 sites based in Greater London.

Reflecting on the purchase of Leisurama and its impact on the development of the Quicksilver brand, Talarius CEO Nick Harding said: “It’s been an incredibly significant and rewarding period for Talarius plc and the 1,000 people who now work for the Talarius group.” He continued: “We represent the dominant brand in many of the country’s major conurbations. With more people in the UK associating AGC’s with the Quicksilver experience than with any other chain, we will be at the vanguard of demonstrating that high street adult gaming is both profitable and socially responsible.

“This is a business with which we are very familiar. We know the management team well and are confident that the business will be integrated seamlessly. On a personal note, I would like to pay tribute to Laurence Corrigan of Leisurama. I have known Laurence for many years and I am delighted to have finally been able to convince him of the good sense of realising the value of his estate. I can assure him that the Leisurama business is in extremely safe hands!”

Talarius listed on AIM in April 2005 with the intention of consolidating the fragmented high street gaming market. The Leisurama purchase is the fourth acquisition since listing. The official statement released to the City confirmed the management team’s intention to pursue further complementary acquisitions.
(E-03.08.06)

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