Rank,FY09
Rank's 2009 turnover was up 1% on the year before, the Group's year-end key performance indicators reveal, despite a 4% fall-off in turnover from egaming arm Rank Interactive.
RANK’S 2009 TURNOVER was up 1% on the year before, the Group’s year-end key performance indicators (KPIs) reveal.
The growth was due largely to the expansion of its casinos business, as well as the effect of tax changes contained in the Budget 2009, which increased Mecca Bingo’s reported revenue but reduced its operating profit.
However egaming division Rank Interactive was the sick man of the Group, recording a 4% drop in turnover against static turnover at Mecca Bingo, which dropped managing director Simon Wykes in May, a 2% rise at Top Rank Espana and a 3% rise at Grosvenor Casinos.
This was explained by a 38% fall-off in Rank Interactive’s sportsbook revenue, cushioned by growth of 7% in gaming.
A statement read: “As a result of the Group’s resilient trading performance, cost control measures and its current low cost of financing, Group adjusted earnings per share for 2009 will be significantly higher than in 2008 and will be above the upper end of analysts’ forecasts.”
During the final 12 weeks of the year, group turnover grew by 2% on the same period a year earlier as both Rank Interactive and Grosvenor Casinos delivered improved performances. Rank Interactive saw particular recovery in the period, with stronger gaming and “a lower rate of decline” in sportsbook resulting in revenue up 7% on the same period in 2008. Highlights for Rank Interactive include a games tie with CryptoLogic.
James Hollins, leisure analyst at London brokerage Daniel Stewart, said: “Overall, the figures are solid, with positive returns on the group’s investment in the ‘G’ casino brand driving higher admissions, as well as better progress in delivering a sound online product. Mecca remains our one area of key concern.
“In the absence of any declaration of a return to dividend payments (we assume capital will likely be put into new format roll-out rather than returned to shareholders in the short-term) and the rating still at a relative premium following a stronger recent run, we would advise profit taking and remain with a Sell stance.”
As reported on EGRmagazine.com, Rank expects to collect £25.9m in overpaid VAT in the first quarter of this year, and submitted a claim for £16m VAT overpaid on main stage bingo in its land-based clubs from 2004 following the UK government’s announcement that it will no longer charge VAT on bingo games.