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Rank Group says cash burn to be £10mln per month during coronavirus pandemic closures

The group said its underlying operating profit for the year to June 30 is expected to be £48mln-58mln

Rank Group - Rank Group to burn £10mln per month during closures

Rank Group PLC (LON:RNK) has said its monthly cash burn during the coronavirus pandemic enforced closures will be £10mln per month, down from the previously expected £17mln per month, thanks to support from the government.

The owner of Grosvenor Casinos said 7,000 of its 7,600 staff have been furloughed, saving £8mln per month, adding to the £1mln saved by a business rates holiday.

As of March 31, the group said in a statement, it had £166mln of cash in the bank, while the month of April was expected to be cash neutral.

Rank Group also said that at the beginning of the lockdown period it asked HMRC to repay £25mln in VAT on slot machine revenue between 2002 and 2005, which was received earlier this month.

It noted that the tax office had appealed a previous ruling in the Upper Tribunal, which found in favour of Rank, however, if the Court of Appeal rules in favour of HMRC, Rank will have to pay back the £25mln.

Underlying operating profit for the year to June 30 is expected to be £48mln-58mln and the company said it expects to meet all its bank covenants.

The gambling firm, however, will not recommend a dividend.

In the quarter ended March 31, group like-for-like revenues dropped 4%, it added.

"Rank is positioned to trade through the aftermath of Covid-19 on a cash positive basis even on our assumption of revenue falling 50%," analysts at house broker Peel Hunt commented.

Shares advanced 5% to 175p on Monday at the opening bell.

--Adds analyst's comment, shares--

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