Rank Group PLC (LON:RNK), owner of the Mecca Bingo and Grosvenor Casino chains, was hit by the introduction of the National Living wage and increased property costs as its interim earnings fell 17%.
Pre-tax profits for the six months to December 31 reversed to £35.4mln from £42.7mln for the same period last year on like-for-like revenues of £378.6mln (up 2%).
Income investors in Rank received a boost as the dividend was hiked 11% to 2p a share.
"The first half of the group's financial year has seen challenging trading conditions for both our retail casino and bingo businesses, with strong comparable figures in the previous year,” said chief executive Henry Birch.
“That being said, both businesses showed a year-on-year improvement from quarter to quarter.
“Our digital business continues to grow strongly and there remains significant potential for this channel as we deliver improvements in the second-half."
Birch said the company had had detailed plans to improve second-half operating profit and remains confident Rank will make “good strategic progress” in 2017 and expects full-year profits to be in line with City forecasts.
The shares, down 17% in the last six month, marked time at 193p.