To an extent, regulation and its consequences overshadowed these half-year results from casino operator Rank. Specifically, the group is awaiting the Competition Commission's verdict on its merger with Gala Casinos. Regulators must report their final findings by 20 February and it's widely expected that Rank could be forced to dispose of casino licences in at least six locations - including Edinburgh, Bristol and Liverpool - in order to avoid competition issues.
Operationally, the figures revealed a mixed performance. For example, a high win margin at London-based Grosvenor Casinos meant revenues there grew 13 per cent to £144.5m, with corresponding operating profits up a third to £25.4m. However, that was offset by much slower growth at Mecca Bingo, where higher costs meant profits tumbled 15 per cent to £22.5m. Overall customers visits in the period were slightly ahead at 14.37m, with average spend per visit up 4.6 per cent to £21.71. What's worrying investors, though, is the start to the second half after Rank blamed heavy snow for fewer customer visits. Management now expects a combination of disruption and high-fixed costs at its venues to result in a £3m revenue hit this year.
Peel Hunt downgraded its end-June 2013 forecasts by 4 per cent and now expects pre-tax profit of £61.7m, with EPS of 11.5p (from £61.5m and 11.5p in 2012).
RANK (RNK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 152p | MARKET VALUE: | £594m | |
| TOUCH: | 152-153p | 12-MONTH HIGH: | 159p | LOW: 110p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 60p* | NET CASH: | £62.6m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 283 | 19.0 | 3.60 | 1.00 |
| 2012 | 297 | 15.3 | 2.30 | 1.25 |
| % change | +5 | -19 | -36 | +25 |
Ex-div: 20 Feb Payment: 22 Mar *Includes intangible assets of £215m, or 55p a share | ||||
