Casino operator Rank (RNK) is busy implementing a three-year transformation programme aimed at stimulating revenues, driving down costs and harnessing technology and data analysis. Thanks to 300 different cost-cutting initiatives, management reckons it can claw back £10m in the second half alone, which would bring annual savings to a total of £19m.
While these first-half numbers might not suggest much progress at first, adjusted operating profits of £30.3m actually beat broker Peel Hunt's £29m forecast. This was helped by a moderated decline in like-for-like sales between the first and second quarter, with the opening period adversely affected by the summer heatwave.
Rank's digital division is also gaining better traction. The recently acquired YoBingo contributed to a 15.8 per cent increase in digital revenue to £70.4m, while excluding YoBingo’s contribution still left digital turnover up 5.1 per cent on a like-for-like basis to £63.9m.
Analysts at Peel Hunt expect adjusted pre-tax profits of £70m, giving EPS of 14.2p, compared with £74.2m and 15p in FY2018.
| RANK (RNK) | ||||
| ORD PRICE: | 156p | MARKET VALUE: | £610bn | |
| TOUCH: | 155.6-156.2p | 12-MONTH HIGH: | 240p | LOW: 129p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 101p* | NET CASH: | £7.7m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 354 | 32.8 | 6 | 2.15 |
| 2018 | 348 | 22.8 | 5 | 2.15 |
| % change | -2 | -30 | -25 | - |
| Ex-div: | 14 Feb | |||
| Payment: | 14 Mar | |||
| *Includes intangible assets of £457m, or 117p a share | ||||
