Hard Rock shines as gaming divisions struggle at Rank

Rank Group's Hard Rock division out-performed the firm's bingo and casino divisions during the 16 weeks to 16 April, posting an impresive 9% increase in like-for-like sales at its company-operated outlets.

Food and drink sales rose 12% in the period, buoyed by the company's flagship Hard Rock Cafe in New York, which has relocated to Times Square.

Rank said it was taking action to improve the Hard Rock estate. It has closed two underperforming sites and expects to open between five and seven new sites this year. Hard Rock's gaming arm also performed "strongly".

In contrast, Rank said profits at its other gaming divisions "remain under some pressure" due to higher business costs (including energy), changes to the taxation of gaming machines, and the impact of the Scottish smoking ban on its Mecca Bingo estate.

Revenue at Mecca was flat year-on-year, with a 2% rise in spend per head compensating for a 2% decline in numbers. Rank said it was monitoring the impact of the ban closely, and will provide a more detailed assessment in its interim results, due in September.

The group's Grosvenor Casinos saw a 12% increase in revenue, along with a 14% rise in admissions across the estate, but Rank noted the admissions growth had yet to translate into an increase in handle as the new members were more likely to play machines.

Rank's machine estate was subject to approximately 5m [pounds sterling] in additional VAT payments arising from the changes to the tax on Section 21 machines in December 2005, and the company expects to pay a further 750,000 [pounds sterling] this year when the increase in Amusement Machine Licence Duty is imposed.

The firm's Blue Square division has made "a strong start to the year", increasing sportsbook margins and seeing growth in online gaming.

The group has completed some 45m [pounds sterling] of the 200m [pounds sterling] share buy-back programme it announced in March.