Rank Group earnings fall despite strong digital showing

Rank Group posted its half-year results for the six months to 31 December on Thursday, with like-for-like group revenue up 2% to £378.6m.

The FTSE 250 firm reported digital revenue up 11% to £52.4m, saying its digital platform was “stable and performing well”.

Like-for-like retail revenue was flat in the period at £326.2m.

It said it saw improving trends in retail casino and UK digital in Q2 over Q1, and confirmed its digital operations were restructured to “drive further future growth”.

Debt levels were 37% lower than prior year at £33m, with leverage down to 0.3x.

Group EBITDA before exceptional items fell 5% to £59.7m, however, with group operating profit before exceptional items down 9% to £36.6m.

Basic earnings per share were 7p, down 14%, while adjusted earnings per share fell 7% to 6.9p.

Rank still reported continued strong dividend growth with an interim dividend of 2.0p, up 11% year-on-year.

“The first half of the group's financial year has seen challenging trading conditions for both our retail casino and bingo businesses, with strong comparable figures in the previous year,” said chief executive Henry Birch.

“That being said, both businesses showed a year-on-year improvement from quarter to quarter.”

Birch said Rank’s digital business continued to grow strongly, and there remained significant potential for the channel as the company delivers improvements in the second half.

“Despite increased inflationary and employment costs, we have detailed plans to improve H2 operating profit and remain confident that the group will make good strategic progress in 2017.

“As a result, the board expects that the full year results will be in line with market forecasts.”