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Rank Group returns to growth thanks to digital acceleration

After declining in the first half, underlying operating profit jumped 20% in the second half to produce a total of £72.5mln, a decline of 6% year on year

Rank Group owns Grosvenor casinos

Profits at Rank Group PLC (LON:RNK) returned to growth in the second half, with a strong digital performance in the fourth quarter feeding through to an “encouraging start” to the new financial year. 

The Mecca bingo and Grosvenor casino operator said the £115mln takeover of online bingo specialist Stride Gaming PLC (LON:STR), agreed in May, was expected to complete in the autumn.

Revenue of £729.5mln was flat on a like-for-like basis for the year to 30 June, with turnover in bricks-and-mortar venues down 2% but digital net gaming revenue up 11% as growth accelerated to 17% in the fourth quarter.

After declines in the first half, underlying operating profit in the second half jumped 20% to produce a total of £72.5mln, a decline of 6% year on year. 

After exceptional costs of £28.6mln, including an £8mln provision for technical non-compliance with UK minimum wage regulations, statutory post-tax profits fell 23% to £27.6mln.

As the board upped the dividend 3% to 7.65p, chief executive John O’Reilly said he was pleased with the second half performance. 

The transformation programme he launched last December, he said, “is pivotal to our growth strategy both in the UK and internationally” and was “excited by the important initiatives that are being implemented across each of our businesses”, while “there remains a lot of improvement to be delivered”.

He said the Stride acquisition “will help step change our digital business” and overall for the group was “optimistic about 2019/20 outturn”.

Rank, which also announced that non-executive director Alex Thursby, a former banker, will be appointed as chair at the annual shareholder meeting in October, saw its shares little moved at 152.23p on Thursday morning. 

 

Quick facts: Rank Group

Price: 91.1 GBX

LSE:RNK
Market: LSE
Market Cap: £355.91 m
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