Tough odds for Rank Group as profits decline

CASINO operator Rank’s luck was mixed during the second half of last year, as good online and casino performances were overshadowed by difficulties at its Mecca bingo halls and Blue Square sports betting business.

Operating profits at its Grosvenor casinos rose by a third and its Mecca bingo business saw digital revenues overtake those from bingo halls for the first time.

However, the company said yesterday that the January snow had hit trading in the last two weeks, and that increased costs in its bingo halls and at Blue Square business had led to a fall in overall profits.

The Blue Square division, which Rank is exploring a sale of, saw its operating losses treble in the period to £4.8m, making a successful disposal look unlikely.

Overall, Rank saw pre-tax profits fall 19 per cent to £15.3m in the six-month period, which represents the first half of its financial year. Turnover rose from £296m to £312m.

“It’s been a difficult first half, there’s no question about that,” chief executive Ian Burke said, although he said the company had a big opportunity to use the Grosvenor brand to expand its online casino operation.

Rank’s £205m deal to buy Gala’s 23 casinos has been put on hold by the Competition Commission, which is set to report back on 20 February.

If the deal is cleared, Rank and Gala will have to reach a new agreement, as the original deal’s deadline passed last September.