Rank reviews sports betting arm

[dave nz]

Leisure group Rank admitted it had placed its Blue Square sports betting operations under review as it produced further evidence that it had stabilised its core bingo and casino businesses.



Recovering from the smoking ban and laws reducing the number of £500 jackpot machines, operating profits at Grosvenor Casinos fell only £400,000 to £29.5m last year.

Mecca Bingo's profits slipped from £43.6m to £41.8m – but would have fallen 25.2pc without a £9.2m contribution from Rank's recovery of £59.1m in overpaid VAT.

In the past eight weeks, Mecca's like-for-like sales fell 3pc, while Grovesnor's rose 3pc. Bingo attendances were hit by the February snow.

The disappointment was Rank Interactive, the wing that contains the Blue Square operation, where underlying sales fell 10pc – largely due to unfavourable football results.

Ian Burke, Rank's chief executive, has recently changed the division's management team. "We are going to give them a chance to see what they can do turning round the sports book." Mr Burke said, agreeing it was not a good time to sell a business.

Nick Batram, a KBC Peel Hunt analyst, said: "We question the long-term future of the business within Rank unless further investment is made."

At the pre-tax level, Rank fell to a £26.1m loss versus last time's £7.1m profit on revenues down 2.3pc at £522m. Despite the VAT refund, Rank had a net £30.4m of exceptional charges, mainly due to the £99.2m loss offloading its final-salary pension scheme. The shares fell ½ to 59½p.