Rank sees 'slower decline' in bingo as Blue Square excels

Leisure Report, June, 2008

Rank Group has slowed the decline in its revenues after fighting back against the smoking ban.

The company said expansion into Spain and into other forms of interactive gambling had also helped offset revenue falls at its core bingo business. Group revenue fell by 8% in the first 17 weeks of 2008 compared with a year earlier, but was up slightly on the final four months of 2007.

Despite this, the group's shares, down almost 6% at 89p in the wake of the news, were among the worst performers on the FTSE 250.

The largest decline came at the group's Mecca Bingo business, where total revenue fell by 16% in the first 17 weeks of 2008 compared with the previous year, or 14%, excluding the effects of club openings, closures and relocations.

Rank said: "We are focused on growing the number of visits to our businesses by rewarding loyal customers, reaching out to engage with new customers and raising standards of service and product for customers.

"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."

Revenue declined in each of Rank's business units with the exception of Blue Square and Top Rank Espana, its Spanish operation.

Blue Square's revenue rose 10% on a like-for-like basis compared with a year earlier, while revenue at Top Rank Espana rose by 7%, although this was largely as a consequence of the strength of the Euro against Sterling.

Rank also said it expected to receive at least 20m [pounds sterling] in cash to reduce its debt when the transfer of its pension plan to a Goldman Sachs unit, announced in February, has been completed.