Historically, gambling companies didn't worry about where customer money came from. But new UK Gambling Commission rules have made it mandatory for companies to determine the source of funds for high-stake bets. For Rank (RNK), the consequences have been most pronounced in its Grosvenor Casinos business, where sales fell 6.1 per cent to £373m and operating profit declined 6.7 per cent to £48.6m.
Chief executive John O’Reilly said the impact from tighter customer due diligence should be less pronounced going forward; during the second half of last year the group had to work through a backlog of existing customers to determine the legitimacy of their funds. The impact was most strongly felt in London, since many visitors don’t carry proof of funding sources, such as a bank statement or pay slip.
Mr O’Reilly took over as chief executive in May, and is busy implementing a "transformation programme". The Grosvenor One single wallet will be introduced in the second half of the current financial year, which Mr O’Reilly believes will encourage punters to bet both in casinos and online.
Analysts at broker Peel Hunt expect pre-tax profit of £78.8m in the year to June 2019, giving EPS of 16p, increasing to £83.7m and 16.7p in FY2020.
| RANK GROUP (RNK) | ||||
| ORD PRICE: | 172p | MARKET VALUE: | £682m | |
| TOUCH: | 171-172p | 12-MONTH HIGH: | 250p | LOW: 155p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 100p* | NET DEBT: | 2% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 708 | 14.4 | 4.5 | 4.50 |
| 2015 | 701 | 74.5 | 15.1 | 5.60 |
| 2016 | 709 | 85.5 | 19.1 | 6.50 |
| 2017 | 707 | 79.7 | 16.1 | 7.30 |
| 2018 | 691 | 46.7 | 9.2 | 7.45 |
| % change | -2 | -41 | -43 | +2 |
| Ex-div: | 20 Sep | |||
| Payment: | 30 Oct | |||
| *Includes £459m of intangible assets, or 116p a share | ||||
