Broker snap: Rank rated 'hold' as trading slows, says Panmure

13th May 2013 10:06

Shares in Rank Group aren't that expensive, according to Panmure Gordon, but the broker has kept its 'hold' rating and 160p target price for the stock after its third quarter was affected by poor weather.Rank announced on Monday morning that full-year results for continuing business will likely be below the prior year after sales and customer numbers at its casinos and bingo clubs were hit by the freezing weather over the past few months.Excluding the now discontinued Blue Square Bet business, earnings before interest and tax (EBIT) will under the £69.7m recorded the year before. Panmure expects consensus EBIT forecasts to move down to around £68m.This would leave the group trading at an adjusted 2013 enterprise value-to-EBITDA multiple of 7.2 "which is not expensive given the group's market leading position in UK casinos", said Panmure.This position has been cemented by the £179m acquisition of Gala casinos which the company has just completed."For the group's transformation to be complete we think consideration should be given to the demerger of the Mecca & Enracha businesses, whose profit trajectory has been given a boost through the inclusion of the online operations."The stock was down 2.67% at 161.56p by 10:19.BC