Shares in Rank Group (RNK) have fallen by more than a half since late February, reflecting the spread of Covid-19 and the shuttering of casinos during lockdown. Such venues constitute more than three-quarters of Rank’s like-for-like revenues, meaning that the blow has been severe – sending operating profits plunging by two-fifths to £23.5m for the year to June, and leading management to put the dividend on ice.
That said, the earlier part of the reporting period had given cause for encouragement. For the eight months to 29 February, profits more than doubled to £70.9m. That performance was underpinned by Grosvenor casinos, for which like-for-like sales improved by 16 per cent to £260m. But the picture abruptly changed for Grosvenor as time wore on, flipping to a decline of almost a fifth for the full 12 months.
Still, ‘stay at home’ orders did not prevent people from using Rank’s online services. Digital net revenues grew by almost a quarter to £145m on an underlying basis – albeit pro-forma figures were dampened by the recently-acquired Stride business, following work to “harmonise” safer gambling controls.
Consensus forecasts put adjusted EPS at 3.45p for FY2021, from 7p in FY2020.
| RANK GROUP (RNK) | ||||
| ORD PRICE: | 129p | MARKET VALUE: | £ 506m | |
| TOUCH: | 128-129p | 12-MONTH HIGH: | 326p | LOW: 85p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 52 | |
| NET ASSET VALUE: | 94p* | NET DEBT: | 81% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 709 | 85.5 | 19.1 | 6.5 |
| 2017 | 707 | 79.7 | 16.1 | 7.3 |
| 2018 | 691 | 46.7 | 9.2 | 7.5 |
| 2019 | 695 | 34.6 | 7.4 | 7.7 |
| 2020 | 638 | 15.4 | 2.5 | 2.8 |
| % change | -8 | -55 | -66 | -63 |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £521m, or 133p a share | ||||
