Rank sees bright start to year

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Mecca Bingo parent Rank Group has posted a 14 per cent hike in annual profits

Mecca Bingo parent Rank Group has posted a 14% hike in profits and said momentum has continued into 2011 despite being hit by higher taxes and Spain’s smoking ban.

The group reported like-for-like revenues up 2% in the first eight weeks of the new year as its resurgent bingo business offset more difficult trading for Grosvenor Casinos and its Spanish arm.

The January 1 smoking ban in Spain sent Top Rank Espana revenues plunging 18% since the year-end and Rank is expecting turnover from the division to fall by up to 10% this year.

Its Grosvenor Casinos chain also suffered as punters in London came away with more winnings since the new year, sending revenues down 6% in spite of a 16% hike in visits.

Mecca, which has seen a marked revival thanks to its turnaround and rebranding efforts, notched up an 8% rise in revenues thanks in part to weak comparatives caused by last year’s January snow, while meccabingo.com drove interactive gaming sales up by 25% in the eight week period.

Rank’s 2010 results topped market expectations, with pre-tax profits of £55.2 million against £48.5 million a year earlier.

Rank saw the number of visits to Mecca bingo halls increase for the first time in more than a decade in the first half of 2010 as it began rebranding sites under its new Full House format in order to attract a younger crowd.

It has also been overhauling its food and drink offering in recent years to encourage visitors to spend more, including the introduction of table service. This saw sales of food and drink rise 11.2% in 2010.

However, the Government’s move last January to end its temporary VAT reduction hit Mecca earnings, which fell 8% to £29.7 million in 2010 and Rank cautioned this year’s VAT rise will present a further challenge.

Grosvenor’s performance in 2010 was the main driver behind Rank’s profit hike, with the division seeing earnings rise nearly 17% to £36 million on like-for-like sales up 5%. The group now has 35 Grosvenor casinos across the UK.

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