Online migration accelerates at Rank

Rank Group is still pulling in the punters despite the recession, although more and more of them are having a flutter online these days.

The group, which has changed its year-end to the end of June from the end of December to fall into step with Malaysian parent company Guoco, said revenue in the 12 months to June 30th rose 3.4% to £600.5m from £580.7m in the preceding 12-month period.

Headline profit before tax jumped 9.0% to £61.5m from £56.4m the year before. Exceptional items reduced that figure to £40.8m, whereas last year one-off items worked in Rank's favour and boosted reported profit before tax to £181.4m, after the group won a battle with the UK tax-man.

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Basic earnings per share (EPS) slumped to 7.2p from 36.5p the year before, while adjusted EPS moved up to 11.6p from 10.2p the year before, beating market expectations of 10.75p.

The dividend pay-out over the 12-month period has been lifted to 3.60p, up from 2.66p last year and ahead of market expectations of 2.99p. Rank's annualised dividend per share has grown at a compound rate of 31.2% since 2009, the group noted.

The number of customers served in the reporting period rose by 4.9% to 2.67m from 2.55m the year before, with the number of customer visits to the group's bingo clubs and casinos up 3.4% to 28.84m from 27.90m a year earlier.

Average spend per visit remained stable at £20.82, but average revenue per customer eased 1.4% to £224.82 from £228.08 previously, which can be explained by the number of customers rising faster than customer visits. Rank said it has seen a rise in the number of leisure-oriented customers visiting its UK venues, and these customers tend to visit the venues less frequently than Rank's seasoned gamblers and bingo addicts.

Grosvenor Casinos saw revenue rise 4.2% year-on-year (y/y) to £255.8m, with operating profit up 10.9% to £42.8m.

Mecca Bingo scraped up a 0.1% y/y increase in revenue to £237.8m but operating profit eased 5.4% to £28.3m.

In a possible sign of the times, the online business, Rank Interactive, achieved eye-catching growth in both revenue and operating profit, with the former up 20.8% y/y to £77.7m and the latter up 26.5% y/y to £10.5m. The group's online Mecca bingo site did particularly well, the group said.

In another sign of the times, the Spanish operations saw revenue slide 12.8% to £29.2m while operating profits collapsed to £1.4m from £4.0m in the preceding 12-month period.

Net cash at the end of the period rose 12.4% to £41.8m from £37.2m at the end of June 2011.

Trading since the end of July has seen group revenue rise 6% on a year earlier, with like-for-like revenue up 4%.

"While the current economic conditions remain challenging we have continued to increase the popularity of our brands and we look forward to the future with optimism," said Chairman Ian Burke.

The group announced it has recently rejigged its organisational structure to a model based on brands - e.g. Mecca, Grosvenor Casinos, Blue Square - rather than the delivery method - e.g. clubs, casino, online. A single member of Rank's executive committee has been assigned responsibility for each brand.

JH