29th Jan 2015 07:59
LONDON (Alliance News) - Mecca bingo operator Rank Group PLC Thursday said revenue and profits rose in the first half of the year, driven by casino acquisitions by its Grosvenor Casinos business, while profit improved at its Mecca business thanks to cost savings and the reduction in bingo duty.
The company, which operates the Mecca bingo chain as well as Grosvenor Casinos, posted a pretax profit before exceptional items of GBP34.9 million, up from GBP28.3 million the year before, as revenue rose 3% to GBP361.7 million, up from GBP352.4 million.
Including exceptional costs, the group's pretax profit was GBP36.3 million, compared with a GBP6.2 million loss a year earlier when it had booked GBP34.5 million in exceptional items.
The group declared a 19% increase in its interim dividend to 1.60 pence per share.
"We have continued our focus on improving our digital business and this strategy has resulted in a 16% increase in digital revenues and 75% increase in operating profit," said Chief Executive Henry Birch in a statement.
Rank said it has just signed a deal with Bede Gaming to supply its new core digital platform.
Last year, the group raised its full year dividend by 10% after posting strong revenue growth, boosted by casino acquisitions, although its profit was hit higher exceptional costs.
In March last year the UK government announced that bingo duty would be cut to 10% this year, down from 20%, to support bingo and encourage investment. When the government first announced its plans, Rank revealed it was planning to open three new bingo clubs.
"The group's venue maintenance and development programme remains very busy in the second half and beyond into 2015/16. Rank remains in a strong financial position, possesses market-leading brands and has a clear strategy for long term growth. As a result, the board continues to look to the future with confidence," said Birch Thursday.
Grosvenor Casinos' revenue increased 6% to GBP205.6 million, principally driven by the acquisition of the Gala Coral estate, while operating profit rose by 10% to GBP31 million.
Mecca's revenue was marginally down at GBP143.3 million, with improvements in its online channel being offset by the brand's venues performance. Total operating profit for the business rose by 65% to GBP22.9 million, supported by the reduction in bingo duty.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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