Event group Tarsus (LON:TRS) has confirmed its commitment to emerging markets by selling a 51 percent interest in Modamont, its struggling French subsidiary, to a JV partner, Premiere Vision, for €6.1 million. The move marks a significant cut in Tarsus’ exposure to the economic gloom of the French market allowing a greater focus on the growth opportunities afforded by current operations in Asia, the Middle East and Turkey.

Speaking to Stockopedia, Douglas Emslie, the group managing director of Tarsus, said: “Eighteen months ago we launched our 50/13 strategy to get more into emerging markets and I see this as really a continuation of the execution of that strategy. Views on this have changed dramatically but Europe now looks like it will see slow growth to decline over the next 10 years. We saw the opportunity to reduce our exposure to France and it gives us more flexibility to bring in more emerging markets opportunities. The reality is that the growth is not in the UK, it is certainly not in France, but it is going to come from the Asian economies, the Middle East and Turkey – and those are the three areas that we are focused on.”

Emslie added that it was too early to tell whether the group would sell off its remaining French business – which now accounts for 10 percent of group revenues. Last year, Tarsus’ share of Modamont revenues and profits were approximately €2.2 million and €0.6 million respectively. On completion of the sale, Tarsus’ French operating division will repay a loan of €2.2 million to Modamont, with the net proceeds – believed to be around £3.2 million – earmarked to give additional balance sheet flexibility. That is expected to involve Tarsus channelling more resources into executing its plan to derive 50 percent of revenues from emerging markets by 2013 – what it calls its 50/13 strategy.

In a note to investors, Investec said the French disposal was “good news” and made good sense given Tarsus’ clear and aggressive targets to expand into emerging market growth assets. It estimated that, post disposal, the deal would take Tarsus’ emerging market sales from 37 percent to 41 percent and that net proceeds from the sale would come in at around £3.2 million. Investec noted that underlying trading remained strong and slightly ahead of its…

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