DISAPPOINTING HALF YEAR FOR RANK'S INTERACTIVE
DIVISION
7 August 2009
Blue Square subsidiary suffers decline in
turnover in a challenging environment
The UK land and online gambling group Rank Group plc
published its half-year results for the six months ended
30 June 2009 on Friday, with its online division
recording an 8 percent decline to GBP 24.9 million (H1
2008: GBP 27 millon). Operating profit fell 14 percent
to GBP 3 million (H1 2008: GBP 3.5 million).
Sportsbetting subsidiary Blue Square.com suffered a 43
percent slide in revenues to GBP 4.4 million (H1 2008:
GBP 7.7 million, which was attributed to an adverse run
of Premiership football results in the UK.
Online
bingo operations fared better, with the group’s websites
growing revenue by 12 percent to GBP 16.4 million (H1
2008: GBP 14.7 million).
However, Internet poker
operations remained in the doldrums, with revenues
declining 15 percent to GBP 1.7 million (H1 2008: GBP 2
million), and online casino revenues likewise slipped 8
percent to GBP 2.4 million (H1 2008: GBP 2.6 million.
Management revealed that future plans for the
online division include the launch of GCasino.com, which
will be the premier online casino brand, benefitting
from it's prestigious land equivalent.
Wider
group financial highlights included:
* Group
revenue of GBP 266 million (2008: GBP 257 million.
* Group operating profit before exceptional items of
GBP 30.2 million (2008: GBP 28.9 million).
*
Group operating profits after exceptional items GBP 31.6
million (2008: - GBP 66.3 million loss)
*
Adjusted profit before tax of GBP 24.7 million (2008:
GBP 17.6 million)
* Net debt of GBP 208.1 million
(GBP 226.5 million as at 31 December 2008)
Key
events reported by management included strong trading at
the land-based Grosvenor Casino and continued
stabilisation of Mecca Bingo; reduction in net debt; and
increased capex to boost growth. On the negative side,
tax changes announced in the 2009 UK Budget are expected
to cost Rank plc approximately GBP 9 million on an
annualised basis.
Ian Burke, chief executive of
the Rank group said: "Rank performed well during the
first half of the year, achieving profitable revenue
growth in a difficult economic environment and further
strengthening the group's balance sheet through debt
reduction.
"We have set out a clear strategy for
growth within the UK gaming market, expanding our
portfolio of G Casinos, delivering operational
improvements in Mecca Bingo and repositioning Rank
Interactive to prioritise its gaming websites and
meccabingo.com in particular.
"The first half of
the year has been marked by a number of positive changes
to gaming regulations, resulting from improved
understanding between the bingo industry and the
Department for Culture Media and Sport ('DCMS').
"However, the volatile nature of HM Treasury's
fiscal policy remains the principal challenge for the
group. We are disappointed by the government's decision
to introduce a significant increase in the taxation of
bingo during this year's budget and will continue to
give active support to the Bingo Association in its
campaign to achieve a fair deal for Britain's licensed
bingo clubs.
"Despite the economic uncertainty,
we are encouraged by the progress we have made this year
in terms of enhanced customer propositions, a stronger
senior management team and the group's financial
position. While we remain cautious in the near-term, we
look forward with confidence in the long-term prospects
for gaming and the success of the group's growth
strategy."
Online Casino News Courtesy of
Infopowa
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