Rank Group earnings slide after tough first half

(Sharecast News) - The Rank Group issued its interim results for the six months ended 31 December on Thursday, reporting a 2.4% fall in group like-for-like revenue to £366m.It did see a 5.1% improvement in digital like-for-like revenue to £63.9m, but venues like-for-like revenue fell 3.9% to £302.1m.The FTSE 250 gambling operator said group EBITDA before exceptional items was £52.3m - a fall of 17.4% - while group operating profit before exceptional items was 27.3% lower at £30.3m.Adjusted profit before tax was down 27.6% at £29.1m, and adjusted earnings per share contracted 23.8% to 6.1p year-on-year.On a statutory basis, revenue was off 1.7% at £348.2m, group operating profit fell 24.6% o £25.8m, and profit before tax was down 30.5% at £22.8m.Cash generated from operations slid 9.5% to £56m, while Rank boasted net cash of £7.7m - up from £4m a year earlier.Basic earnings per share after exceptional items slid 25% to 4.8p, while the company left its dividend for the period unchanged at 2.15p.On the operational front, Rank Group said the improvement in digital revenue could be put down to its Mecca and Grosvenor brands continuing to grow customer volumes.Its YoBingo business was also performing ahead of the acquisition plan.Grosvenor venues were impacted by a reduced contribution from major players, a weather impacted first quarter and a "challenging" consumer backdrop, the Rank board claimed.It made "key" casino investments at the Barracuda, as well as in new gaming machines and electronic roulette across the estate during the period.Grosvenor's single account and wallet offer, Grosvenor One, was successfully trialled in the period, with a full rollout scheduled by the end of the 2019 financial year.Rank also said its transformation programme, which was launched during the half, was gaining momentum.Looking beyond the first half, Rank Group said trading in the short four week period to 27 January was in line with its expectations.It said it expected its full-year performance to be in line with current consensus, adding that it had identified total group cost savings of £10m for the second half, with a full-year net benefit of £19m expected in the 2020 financial year."The first half of our financial year has been a tough trading period; I am however encouraged by the group's improved performance in the second quarter," said chief executive officer John O'Reilly."The three-year transformation programme that we outlined at our full-year results in August is now well underway with nearly 300 initiatives identified and tasked."O'Reilly said the programme would gain further momentum in the second half, adding that the management team was positive about what could be achieved."While there is lots to be done to deliver the revenue improvements and cost efficiencies identified, I am confident in the outlook for Rank and excited about the opportunities that exist."