26th Apr 2006 07:01
Rank Group PLC26 April 2006 26 April 2006 The Rank Group Plc AGM trading statement 16 weeks to 16 April 2006 Summary The Rank Group has made a steady start to the year in terms of revenueperformance. Profits remain under some pressure in our Gaming Division, in partdue to higher business costs (including energy) and changes to the taxation ofour gaming machines. In addition, Mecca Bingo is facing the impact of thesmoking ban in Scotland. Hard Rock continues to trade strongly in its cafesbusiness as well as through its gaming and hotel interests. Gaming In Grosvenor Casinos we generated 12% growth in revenue, continuing to takeadvantage of the early freedoms of gaming deregulation that were introduced inOctober 2005. Admissions are up by 14% for the estate as a whole, with ourprovincial clubs enjoying higher increases than in London clubs. Admissionsgrowth has yet to translate into increased handle, as new members are morelikely to play gaming machines rather than table games. Revenue in Mecca Bingo is flat year-on-year, with a 2% rise in spend per headcompensating for a 2% fall in admissions. At the end of March 2006 we relocatedour Edinburgh Palais club to nearby Fountain Park, creating the world's firstfully-electronic bingo club. In addition we opened one new club at Crewe inJanuary and we closed our club at Stepney, East London earlier this month. On 26 March 2006 a ban on smoking in public places was introduced in Scotland,where Rank operates 14 Mecca Bingo clubs. During the first three weeks of theban we have seen a modest reduction in admissions to our Scottish clubs, but agreater reduction in spend per head. We are monitoring closely our tradingperformance in Scotland and will provide a more detailed assessment of theimpact of the ban with our interim results on 2 September. In Spain, our 11bingo clubs will be subject to a partial smoking ban from September 2006. From 1 August 2006, our gaming machines in Mecca and in Grosvenor will besubject to higher levels of Amusement Machine Licence Duty. We anticipate thatthis will have a negative effect on 2006 profits of approximately £750,000. Thiscost is in addition to the estimated £5m of additional VAT payments arising froma change to the tax treatment of Section 21 machines introduced in December2005. Blue Square has made a positive start to the year with continued growth inon-line gaming and stronger sportsbook margins than in 2005. Hard Rock Hard Rock has grown like-for-like sales in company-operated cafes by 9% withfood and beverage sales up 12% and merchandise ahead by 4%. This strongperformance is in part due to trading at our cafe in New York City, which lastsummer we relocated to its new site on Times Square. Total sales forcompany-operated cafes are ahead by 7%. We continue to take action to improve the quality of the Hard Rock Cafeportfolio, closing two under-performing company-operated cafes since the startof the year. And we remain on course to add between five and seven new cafes toour estate in 2006, with the majority to be opened by our franchise partners.Hard Rock's hotel and gaming interests, which include the Seminole IndianNation's two Hard Rock Hotel & Casinos in Florida, continue to trade strongly. Deluxe Media We are proceeding with an exit of Deluxe Media via separate disposals of itsconstituent operations and are in the early stages of negotiations with a numberof interested parties. Share buy-back At the time of Rank's preliminary results in March 2006, we announced ourintention to return £200m to shareholders through a share buy-back programme. Asat market close on 25 April 2006, we had purchased and cancelled a total of 19.4million shares in The Rank Group Plc at a cost of £45.7m. ends For further details: The Rank Group Plc Dan Waugh 020 7535 8031 The Maitland Consultancy Suzanne Bartch 020 7379 5151 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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