Only about a third of the general public thinks gambling companies can be trusted. Rank Group (RNK) is hoping to change that. The intention is to trial set limits on slot machines and share the findings with gambling addiction researchers. Chief executive Henry Birch believes this is the right thing to do, both morally and from a business perspective, as problem gamblers will reach their limit and burn out more quickly. It could also discourage regulators from adding new rules or taxes.
One such tax includes a new 15 per cent gaming duty on customer bonuses. This had a £1m impact on profits in the first half, and should increase to between £3m and £3.5m by the year-end. Cautious consumer spending hurt sales at Rank’s venues, but careful cost-cutting meant operating profits still improved by 9 per cent to £46.4m. Mr Birch called the digital segment "the real highlight”, with revenues up 16 per cent to £60.6m and operating profits up more than half. The new Grosvenor One single account is meant to encourage customers to play online and at venues. Rank is aiming to have 15 per cent of its retail customers playing digitally within the next three years, up from 3 per cent now.
Analysts at Peel Hunt expect pre-tax profits of £78.6m in the year to June 2018, giving EPS of 16p, compared with £79.3m and 16p in FY2017.
| RANK GROUP (RNK) | ||||
| ORD PRICE: | 226p | MARKET VALUE: | £881m | |
| TOUCH: | 225-226p | 12-MONTH HIGH: | 250p | LOW: 198p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 101p* | NET CASH: | £4m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 355 | 35.4 | 7.2 | 2.00 |
| 2017 | 354 | 32.8 | 6.4 | 2.15 |
| % change | - | -7 | -11 | +8 |
| Ex-div: | 15 Feb | |||
| Payment: | 15 Mar | |||
| *Includes intangible assets of £413m, or 106p a share | ||||
