Rank boosts FY profit despite tough trading and competition

14th Aug 2014 08:32

Bingo and casino operator Rank Group blamed tough markets and competition for a full-year revenue fall in its Grosvenor casino and Mecca bingo businesses, although acquisitions boosted profits.Rank said like-for-like revenue from Grosvenor venues dropped by 4% although digital revenue lifted 38%. Mecca like-for-like venue revenue fell 5% and online revenue dipped 4%.But Grosvenor's total revenue lifted 30% to £391.2m, driven by a £107.2m revenue contribution from acquired casinos, fuelling a 20% rise in operating profit to £56.8m.Mecca's revenue decreased 3% to £288.2m as customer visits decreased in the year. Lower revenues and higher digital IT costs resulted in total brand profit declining 16% to £37m.The impact of the acquired casinos drove group revenue 13% higher to £707.7m while group underlying pre-tax earnings before exceptional items rose 7% to £116m.Adjusted pre-tax profit fell 4% to £62.5m, adjusted earnings per share were unchanged at 12.4p, net debt increased 32% to £137m but the group hiked its dividend per share by a tenth to 4.5p from 4.1p.Rank said cost-cutting and tighter capital spending had resulted in a 21% rise in second half operating profit against a tough first half.Chief executive Henry Birch said Rank was well-placed for growth after a government cut in bingo duty, major capital investment programmes planned at its Nottingham, Bournemouth and Luton casinos and full year benefits from the £8.9m investment in new products in the acquired casinos."In the short term, the introduction of a digital point of consumption tax will impact performance, but our strong brands and market leading positions ensure that the group is well placed and provide long-term opportunities." Shares in Rank fell 2p or 1.2% to 168p at 08:07 in London.PW