Rank scraps dividend

12-12-2007

Rank scraps dividend
Britain's second-largest bingo hall owner, Rank, has scrapped its second-half dividend due to challenging conditions facing its business.

"The effects of the smoking ban, recent restrictive changes to gaming regulations and a weakening in consumer confidence have resulted in an uncertain outlook for 2008," the company said in a statement announcing its decision.

Rank confirmed trading at both its Mecca bingo halls and Grosvenor casinos had deteriorated since September. The gaming group said the loss of some higher-jackpot gambling terminals in both businesses, as a result of new UK regulations, had compounded the earlier effect of the smoking ban – which has curbed the company's sales since its introduction in July.

Like-for-like revenues at its Mecca venues plummeted by 18 per cent in the 14 weeks to September 1st, with admissions down 15 per cent and spending per customer falling by three per cent.

At its Grosvenor casinos like-for-like revenues declined by seven per cent over the same period, with admissions down five per cent and spending per head two per cent lower.

Rank confirmed the rate of revenue growth for its Blue Square betting website and Spanish chain of bingo clubs had also slowed in recent weeks.

"The short-term trading outlook for Rank remains challenging," the group stressed.

But Rank said its board remained confident the company's long-term strategy to take advantage of the anticipated growth in leisure-based gambling, particularly in the UK, would pay off.

The gaming group reported a one per cent increase in like-for-like revenues and a two per cent decline in total revenues for the 49 weeks to December 9th.

Rank said it expected to report group operating profits broadly in line with market expectations for the whole of 2007.

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