30th Jan 2020 09:42
(Alliance News) - Rank Group PLC on Thursday said cost savings and a solid performances from its digital division, Grosvenor casino venues and international operations resulted in a sharp rise in half-year earnings.
The gambling company, which also owns the Gala Bingo brand, added that underlying operating profit for the year to June 30 is estimated to be between GBP113 million and GBP123 million, versus GBP72.5 million in financial 2019. On pre-IFRS 16 basis, underlying operating profit is anticipated between GBP105 million and GBP115 million.
Shares in the FTSE 250-listed company were up 1.4% at 284.46 pence each in London on Thursday morning.
For the six months to December-end, Rank's pretax profit more than doubled to GBP39.8 million from GBP18.7 million a year ago, on a 14% higher net gaming revenue of GBP397.4 million versus GBP348.2 million. Net gaming revenue is revenue less customer incentives.
The Digital unit saw a 14% rise in like-for-like net gaming revenue in the first half, driven by the performance of the Mecca and Grosvenor brands. Grosvenor venues posted a 15% jump in gaming revenue, while Mecca locations saw a 1% drop. International venues benefited from investments, Rank said, and saw a 9% rise in gaming revenue.
First half operating profit jumped to GBP56.1 million from GBP25.8 million. Adjusted operating profit increased 70% year-on-year to GBP55.1 million.
Chief Executive John O'Reilly said: "The revenue growth in our digital business and across our Grosvenor and Enracha venues shows that we are moving in the right direction in key areas of our business. We remain on track and are confident in our ability to deliver operational and financial improvements underscored by a relentless commitment to delivering exciting, entertaining and safe gambling environments and experiences for our customers.
"The successful integration of Stride into our business will ensure that we benefit from strong synergies, proprietary technology and a first-class digital team, all of which will position us well for the second half of the year," O'Reilly added.
The company completed the acquisition of Stride Gaming PLC for GBP116.0 million in October 2019. It continues to expect cost synergies from the Stride deal to be in line with its GBP13 million guidance, largely to flow through in financial 2021 and 2022.
Rank lifted its interim dividend by 30% to 2.8p per share.
By Tapan Panchal; [email protected]
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