- Full year profit up 38%
- Dividend hiked 206%
- Land-based reforms now live
Casino and bingo operator Rank Group (RNK) reported a 38% increase in underlying like-for-like operating profit for the year to 30 June, in line with previously upgraded guidance, and raised its dividend three-fold.
Better-than-expected trading and excitement around new land-based reforms coming into effect in July have boosted the shares by 70% this year, so some profit-taking is not surprising, and in early trading the shares were down by 6p or 4% to 139.5p.
INFLECTION POINT
Chief executive John O’Reilly commented: ‘We have had another successful year, delivering revenue growth and profit ahead of our expectations. Both online and in our venues the customer reaction to the investments we are making in our businesses has been excellent.
‘With the long-awaited legislative reforms for casinos now delivered, the Group is at an exciting inflection point.
‘The Grosvenor business will benefit from the higher gaming machine allocations and the introduction of sports betting which will better meet existing customer needs and increase the attractiveness of casinos to a broader base of consumers.’
DIVIDEND HIKE
Group like-for-like net gaming revenue increased by 11% to £795.3 million while underlying like-for-like operating profit jumped 38% to £63.7 million, reflecting positive operating leverage.
The standout performances came from the Grosvenor casino venues and UK digital channel with like-for-like operating profit up 35% and 41% respectively.
Grosvenor venues saw a 3% increase in visitor numbers and an 11% increase in spend per visit as well as an improved table margin.
Mecca Bingo grew like-for-like net gaming revenue by 5% reflecting higher spend per visit while visitor numbers were flat. Enracha like-for-like revenue was up 9%.
The company said it had made a good start to the new financial year with group net gaming revenue up 9% for the first six weeks, positioning the group well to meet current full year expectations.
Rank announced a 206% increase in the annual dividend to 2.6p per share, equivalent to 27% of earnings per share, in line with a progressive dividend policy which is expected to see the payout ratio grow to over 35% in the medium term.
