In the trading update issued today by the Rank Group for the 25 weeks to 24 June 2007, the company states that all its business sectors grew like-for-like revenue against the same period in 2006. A strong growth in operating profit was attributed to revenue performance and cost cutting measures. The outlook for the second half of the year, however, may not be so rosy.

Profit performance is likely to be hit by the smoking ban coming into force next month as well as higher casino taxation. Mecca Bingo in both Scotland and Wales has already been adversely affected by smoking bans. In Scotland admissions have declined 13% since the beginning of January and in Wales, where the smoking ban was introduced on 2 April, revenue has fallen 5%. Scotland in recent weeks has shown early signs of recovery.

Steps to minimise the effect of the smoking ban include the installation of smoking enclosures with outdoor bingo terminals and larger cash prizes. Revenue at Top Rank Espana grew 3% for the period and is also showing recovery from the partial smoking ban introduced there in 2006.

Grosvenor Casinos has seen a 5% increase in spend per head but a 1% decline in admissions. Like-for-like revenue grew 4% but Rank’s profit growth was diluted by the changes in casino gaming duty implemented on 1 April 2007. The online gaming and sportsbook Blue Square continued to maintain strong revenue growth, up 37%. Describing its performance as being a solid start to the year, the Group’s total revenue increased 2% for the 25 week period. (E-06.28.07)

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