Today’s Rank Group trading update for the 48 weeks to 25 November reports similar trends to those seen in the first half of the year. Higher operating costs and lower sportsbook margins have caused the company’s profit before tax to be lower than in 2004 despite higher revenue. Grosvenor Casinos have seen admissions up 9%, accelerating since 1 October when the 24-hour gambling rule was abolished, but Rank states it is too early to judge the effect of the recent changes in gambling regulations.

Mecca bingos have seen a 6% decline in admissions and flat growth although Top Rank Espana has delivered steady growth. A new casino licence has been obtained in Stockton-on-Tees, the sixth new licence for Grosvenor Casinos this year, and four further applications have been made. Rank reports strong customer and volume growth at its Blue Square online operation, although win margins on sports betting are down on last year. Revenue growth at Hard Rock Casinos and Hotels was slower than in the first half, which had benefited from the year-on-year impact of the 2004 opening of the Seminole casinos in Florida.

Rank claims to be making steady progress with the sale of Deluxe Film and Deluxe Media Services. Analysts see a lack of news on the sale and a lacklustre trading performance, causing Rank shares to fall. However, Rank shares could become good value if the Deluxe sale is accomplished, as the company then would be seen by many as an attractive future takeover bid target. (E-12.06.05)

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