Rank Group shares collapse

Shares in Rank Group collapsed 34p to 125 after warning that annual profits would be significantly down.

The Mecca bingo and Grosvenor casino owner saw £133 million wiped from its market value and said the smoking ban introduced on July 1 had discouraged customers, along with the loss of gaming terminals, required by the Gambling Act 2005 which commenced September 1.

The group warned that annual operating profits would be significantly below that of last year after tough trading conditions at its bingo and casino operations, affecting its shares by more than 21%.

In a trading update, the group announced that their UK retail businesses were poorer than expected but they understand that they are shared by the broader UK bingo club and casino markets and are not unique to Rank.

The group added that if the disappointing levels of recent weeks’ trading continue through to the remainder of the year, group operating profit for the full year would be considerably lower than in 2006. Group operating profit before exceptionals was £77.4 million in 2006, down from £90.5 million the previous year.

Group like-for-like sales were up 2% in the 40 weeks to October 7 whereas those at Mecca Bingo were down 2% and they were flat during the period at Grosvenor Casinos.

The company announced in August that underlying operating profit increased 26% to £47.9 million in the first half of its financial year, revenue fell 2.3% to £284.6 million.

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