Full year results for Rank

Online gambling division among the underperformers

Full year 2009 results from the Rank Group showed small improvements, although the online gambling division was one of those that underperformed last year. Nevertheless, investors will be pleased to hear that a small dividend is in prospect after some tough times with the UK gambling group.

2009 revenues totalled GBP 540 million, up 3.4 percent year-on-year (2008 FY GBP 522.2 million), generating an EBITDA of GBP 58 million, or 4 percent lower than the corresponding period in 2008.

The small improvement was mainly due to the performance of the Grosvenor land casino brand, where operating profit rose 19 percent to GBP 30.9 million. Other divisions fared less well, with the online gambling operations reporting revenues down 3 percent to GBP 50.8 million which resulted in a fall in operating profit of 1 percent to GBP 7.5 million.

It was not the only division to underperform; operating profit at Mecca Bingo declined 15 percent to GBP 32.3 million, and Top Rank Espana posted a decline of 19 percent to GBP 5.6 million.

Rank management reported that current trading is strong with revenue growth up 5 percent thanks to a good start by online bingo and casino operations, which are up 9 percent, and at Grosvenor casinos which are showing an increase of 14 percent.

The company statement noted: “The current year is forecast to be a period of gradual, if fragile, economic recovery in Britain, Rank’s key market."

In related news, Rank's directors have suggested that the government consider a flat tax rate of 15 percent for all UK betting and gaming, instead of the current seven diverse tax rates.

The company's 'Responsible Taxation - Fairness, Simplicity, Sustainability' report argues the benefits of a flat rate, which include ensuring a competitive equality with overseas operators in more benevolent tax jurisdictions; increasing UK tax income and creating jobs in the UK; lower administrative costs in regard to tax compliance and collection for operators and the Treasury alike.

Ian Burke, the company's chief executive says: “At the moment the gaming and betting activities of UK consumers are subject to a patchwork quilt of taxation, without any apparent logic or relationship to social policy. It is particularly concerning that the current system of taxation seems to be undermining the aims of the Gambling Act by imposing the highest rates of duty on those venues which provide the greatest degree of supervision and have the lowest rates of underage gambling.”

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