RE: Best of British Bargain21 Mar 2024 14:11
As recently as Febuary ( 6 weeks ago)
ank Group recovery drives shares and impresses analysts
Last updated: 15:54 01 Feb 2024 GMT, First published: 15:49 01 Feb 2024 GMT
Bingo wheel with balls Rallied [70 p to 78.4p high]
Rank Group PLC (LSE:RNK), the owner of Mecca Bingo and Grosvenor Casino, saw shares soar around 5% after a “solid” set of interims, which highlighted strong recovery in all its channels.
Last year was filled with challenges, most notably weakened demand, plaguing the group’s financial results, with the six months to December 2022 producing less than £3 million in operating profits.
This year around, operating profits rose by £19 million to £21.7 million, largely due to a 9% increase in like-for-like revenues, which reached £363 million in the six months.
Bingo site closures and lower energy costs also helped, offsetting headwinds like the increased expenditure required for workers.
Grosvenor Casinos experienced a 10% uptick in like-for-like sales, with weekly averages rising above analyst estimates to £6.4 million and closing in on management’s target of £7 million.
Last April, the government announced it would be implementing reforms to the gambling industry, with companies like Rank expected to be affected.
Although the reforms haven’t been put through, management forecasts an £8 million hit due to the changes for staking limits online.
However, with changes to bingo also expected, analysts are confident Rank will see a £15 million to £20 million benefit.
With trading continuing positively in 2024, Shore Capital analysts are buyers of the stock and even see scope for operating profits to return to £100 million.
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