Rank Regulatory News (RNK)

7 May 2008 07:01

Rank Group PLC07 May 2008 7 May 2008 The Rank Group Plc Interim Management Statement 17 weeks to 27 April 2008 The Rank Group Plc ("Rank" or the "Group") announces trading results for thefirst 17 weeks of 2008. As anticipated, the effects of the smoking ban and adverse changes to gamingregulations resulted in lower levels of Group revenue compared with the first 17weeks in 2007. However, we have experienced a modest improvement in averageweekly revenue levels compared with the final four months of 2007 (the periodimmediately following the implementation of the Gambling Act 2005), andcost-saving initiatives have strengthened the Group's profit performance. Having taken action to address our cost base, our objective is to return theGroup to revenue growth. We are focused on growing the number of visits to ourbusinesses by rewarding loyal customers, reaching out to engage with newcustomers and raising standards of service and product for all customers. Group On a like-for-like basis, Group revenue was 8% lower than in the first 17 weeksof 2007, reflecting the year-on-year effects on our UK retail businesses of theEnglish and Welsh smoking bans and the loss of Section 21 gaming terminals(under the Gambling Act 2005). Revenue in Blue Square, our interactive business,remained strongly ahead of the comparable period in 2007. Year on year segmental and Group revenue for the 17 weeks to 27 April 2008 Like-for-like revenue (excludes Total revenue club openings, closures and relocations)Mecca Bingo (14)% (16)%Top Rank Espana* 7% 7%Grosvenor Casinos (8)% (7)%Blue Square 10% 10%Group (8)% (9)% * Year on year movements in revenue are shown on a Sterling basis; if stated inEuros, Top Rank Espana revenue declined by 2%. Mecca Bingo In Mecca Bingo revenue declined by 14% on a like-for-like basis, with admissionsdown 13% and spend per head down 1%. However, this represents a modestimprovement in trading compared with the final four months in 2007. In England and Wales, like-for-like revenue is down 17% against the comparableperiod in 2007, while in Scotland it is marginally ahead. During the period we extended the number of clubs with outside gaming areas to43 and we developed 23 adult gaming centres within our Mecca Bingo portfolio. Inthe clubs where we have been permitted to make these innovations, we have seenincremental revenue and profit improvement. In February 2008 we opened a new Mecca Bingo club at Thanet in Kent and we arepleased with its early trading performance. In April we closed our Mecca Bingoclub in Swindon. At present no further club openings or closures are scheduled. We were disappointed by the Government's decision to reject industry calls fortaxation reform for bingo in its Budget 2008. We support the position of theBingo Association that, in the absence of any clear rationale for theperpetuation of 'double taxation', HM Treasury should grant bingo parity withother forms of gaming in Britain through the abolition of VAT on bingo revenues. Top Rank Espana The difficult consumer environment in Spain affected the performance of ourSpanish bingo clubs business during the first 17 weeks of the year. Although ourreported revenue grew by 7%, this was as a consequence of the strength of theEuro against Sterling. In Euros, revenue declined by 2%, with spend per headflat and admissions down 2%. Grosvenor Casinos In Grosvenor Casinos revenue declined by 8% on a like-for-like basis, withadmissions down 14% and spend per head up 5%. Like-for-like revenue declined by4% in our London casinos and by 13% in our provincial casinos. Our Londoncasinos benefited from an increase in spend per head, with win margin higherthan in the comparative period in 2007. Admissions were down by 14% in bothLondon and the provinces. As with Mecca Bingo, this performance represents a modest improvement in averageweekly revenue, compared with the final four months in 2007. In February we opened our fifth casino under the G Casino brand, at Thanet (arelocation of our Ramsgate casino licence) and we are pleased with its earlytrading performance. We remain on schedule to open our first casino in Scotland,at Aberdeen later this year. Blue Square Blue Square, our interactive gaming division, grew revenue by 10% against thecomparable period in 2007. Our games products, and in particular, Meccabingo.comperformed strongly in the period but revenue from our sportsbook business waslower, reflecting the increasingly competitive nature of the UK sports bettingmarket. Pension Plan As we announced at the time of our annual results on 29 February 2008, we haveentered into a series of agreements to transfer the assets and liabilities ofthe Rank Pension Plan to Rothesay Life. Since then we have received theappropriate tax clearance for the transaction from HM Revenue and Customs. We remain on course to complete this transaction by 30 June 2008 and anticipatea net cash inflow to Rank of at least £20m. Outlook Given the difficult trading environment for our retail gaming businesses we areencouraged by the Group's start to 2008. We have achieved a degree of success inadjusting to the smoking ban and the new gaming regulations and have takentimely action to protect profits. Nevertheless we are conscious that thedifficult consumer climate is likely to make 2008 a challenging year for thegaming sector. Ends Conference call A conference call for investors and analysts will be held at 8.30am BST today (7May 2008). Dial-in information follows below: UK (free call): 0800 694 0257USA (free call): 1866 966 9439International: +44 1452 555 566Passcode: 44300631 A replay of the conference call will shortly be available from the Rank Group'swebsite (http://www.rank.com/). Further enquiries The Rank Group PlcDan Waugh, director of investor relations +44(0)1628 504053 Financial DynamicsBen Foster/Marc Cohen +44(0)20 7831 3113 This information is provided by RNS The company news service from the London Stock Exchange