Rank fights back despite the pain
Dec 13 2007 by Peter McCusker, The Journal
MECCA Bingo owner Rank deepened the pain for shareholders after announcing it would not pay a dividend for its 2007 performance.
The group, which paid out £15.6m on its final dividend of 4p a share last year, said the decision reflected recent trading, uncertainty facing the gaming industry and concerns of a consumer spending slowdown in 2008.
Rank shares have more than halved this year after the impact of the smoking ban and changes in gaming regulations hurt revenues.
Rank said revenues from its entire estate, including Blue Square betting and Grosvenor Casinos, showed a 2% fall in the 49 weeks to December 9, leading to a 1% rise when changes to trading space are stripped out.
Mecca dragged the figures lower, with like-for-like revenues down by 18% in the last 14 weeks of the period. However, Rank said its performance had stabilised since October, when the figure was running 19% lower.
The drop since September came after the introduction of laws limiting the number of high-value jackpot machines across Rank’s 102 halls.
Mecca’s gaming machines contributed more than £70m to Rank’s revenues last year. Each club had 13 £500 jackpot machines, but this has been reduced to four under the new rules. Rank was braced for some impact, but since September its admissions have fallen 15%.
Initiatives to revive the Mecca business have included the rollout of electronic bingo, with more than 5,000 units deployed across 99 clubs.
It has also accelerated the deployment of licensed outdoor gaming areas so smokers can carry on playing.
