Rank recovery on track as bingo giant battles the smoking ban

Published on Wednesday 7 May 2008 21:05

GAMING firm Rank has reported a "modest improvement" in trading at its Mecca bingo halls, despite a 13 per cent fall in admissions this year.

Mecca's like-for-like revenues declined 14 per cent in the 17 weeks to 27 April, compared with the 17.3 per cent slide seen in the final four months of last year.

The industry is under pressure because of a UK-wide smoking ban, new gambling laws and a double tax burden.

Rank, which also operates Grosvenor Casinos and the Blue Square betting business, said it had been encouraged by its performance in the face of a difficult trading environment.

The company told shareholders at its annual meeting: "We have achieved a degree of success in adjusting to the smoking ban and the new gaming regulations and have taken timely action to protect profits. Nevertheless we are conscious that the difficult consumer climate is likely to make 2008 a challenging year for the gaming sector."

Rank is attempting to tackle the smoking ban by providing outside enclosures at 50 of its clubs by the end of the year, as well as running "interval bingo" games for smoking punters.

It has extended the number of clubs with outside gaming areas to 43, resulting in a revenue and profit improvement. Like-for-like revenues in Scotland, where a smoking ban has been in place since March 2007, were marginally ahead.

In Grosvenor Casinos, revenues declined by 8 per cent on a like-for-like basis, with admissions down 14 per cent and spend per head up 5 per cent. As with Mecca, the performance represented a modest improvement compared with the final four months of 2007.

Investec Securities said substantial progress was being made with the turnaround strategy as Rank updates its bingo and casino offerings. The broker added: "Whilst we acknowledge the consumer risk, we remain upbeat on long-term prospects."