Rank plc reports a positive year

The UK land and online gambling group Rank plc released its full year results to end-June Tuesday, claiming continued like-for-like revenue growth across all brands and channels. However, analysts noted that the group operating profit before exceptional items at GBP 82.4 million fell 2 percent, impacted by higher digital operating costs and a weak fourth quarter at Grosvenor casino venues.

Key highlights of the report included:

* Continued like-for-like growth across all brands and channels, with Group like-for-like revenue up 2 percent at GBP 753 million;

* Group EBITDA before exceptional items and Remote Gaming Duty up 2 percent at GBP 139.8 million;

* Continued strong digital revenue growth, up 11 percent; with online revenue at Grosvenor up 37 percent.

* Adjusted profit before tax up 4 percent at GBP 77.4 million;

* Profit before taxation but after exceptional items was up 15 percent at GBP 85.5 million;

* Mecca’s retail bingo growth continues, with revenue up 2 percent;

* Debt levels further reduced from GBP 52.9 million in the preceding year to GBP 41.2 million in 2014-2015;

* UK digital brands migrated to new digital platform in Q3 2015/16, on time and within budget;

* Dividend growth with dividend per share of 6.50p, up 16 percent year-on-year

* Adjusted EPS up 5 percent.

Henry Birch, chief executive, said the group’s performance in the year represented a solid set of results with group revenue up 2 percent, again recording like-for-like growth across all brands and channels in the year.

“This year we have focussed on delivering significant projects to ensure we have the right platform in place for future growth. This included the migration of our digital business onto a new platform, the rollout of an improved retail casino management system and investments into new generation machines in both our casino and bingo venues,” he said.

“At the same time we have delivered a substantial increase in the dividend to our shareholders. Rank remains in a strong financial position, possesses market-leading brands and has a clear strategy for long-term growth.

The reports notes that:

Group revenue is before adjustment for customer incentives; Group EBITDA is operating profit before exceptional items, depreciation and amortisation;
adjusted profit before tax is profit from continuing operations before taxation adjusted to exclude exceptional items, the unwinding of discount in disposal provisions and other financial gains or losses.

It also notes that adjusted EPS is calculated by adjusting profit attributable to equity shareholders to exclude discontinued operations, exceptional items, other financial gains or losses, unwinding of the discount in disposal provisions and the related tax effects;

“The directors believe that exceptional items and other adjustments impair visibility of the underlying performance of the Group’s business and accordingly, these are excluded from our non-GAAP measurement of Revenue, Profit Before Tax, EBITDA, Operating Profit and Adjusted EPS,” the report notes.

Regarding the potential of digital operations, the company statement asserts:

“In 2015-16, our digital operations generated 13 percent of group revenue whereas digital channels now represent around 39 percent of Great Britain’s gambling market (excluding National Lottery). This presents a significant growth opportunity.

“We are in the process of enhancing our capability in this area such that we can meet the changing needs of our customers and capture a greater share of the digital market.”

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