Casino and bingo company Rank Group (RNK) has protected its chips well, despite having to stomach roughly £5m in extra taxes thanks to the recent introduction of remote gaming duty. Underlying operating profits rose 11 per cent to £46.1m if the tax is ignored, but even with it included they were virtually flat. A good performance from its Grosvenor casinos helped, with total spend per visit rising in London and the provinces.
Net debt has reduced more quickly than analysts' models had predicted, said management, mainly because of an extra £11m banked from the sale of a freehold as well as a tax refund. This prompted broker Edison to reduce its expected net debt figure for the full year to £42m, from £65m, and it now predicts the business to have £23m of net cash at the end of the 2018 financial year, compared with its previous forecast of £1m.
Chief executive Henry Birch says the migration to a new digital platform will go ahead as planned at the end of March. The company hopes its 'My Mecca' app will encourage a sizeable portion of its estate customers to its online proposition.
Analysts at Peel Hunt expect pre-tax profits of £79m for the year to June, leading to EPS of 15.7p, compared with £74m and 14.6p in FY2015.
| RANK GROUP (RNK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 282p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 281p-282p | 12-MONTH HIGH: | 302p | LOW: 166p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 83p* | NET DEBT: | 16% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 343 | 36.3 | 7.2 | 1.6 |
| 2015 | 353 | 42.7 | 9.7 | 1.8 |
| % change | +3 | +18 | +35 | +13 |
Ex-div: 11 Feb Payment: 22 Mar *Includes intangible assets of £399m, or 102p a share | ||||
