Rank adapting to new climate

Mecca Bingo owner’s ‘self-help story’ pleases analysts

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Mecca Bingo owner Rank said yesterday that efforts to cope with the impact of smoking bans and new gambling laws had boosted recent trading.

The firm – which has improved its food and drink offering and introduced outside areas to accommodate smokers – has also installed a larger number of gaming machines in its bingo clubs.

In the six weeks since September 1, Rank’s like-for-like revenue was up 5%.

At Mecca, comparative revenue rose 2%, with an 8% rise in spending per customer offsetting lower admissions.

Rank praised the “much stronger” recent performance but warned investors of the headwinds from a slowing economy.

It said: “While the group has continued to perform in line with expectations, we recognise that the broader economic climate remains uncertain in the near-term.”

Rank said it had gained permission for 83 games arcades at its Mecca Bingo halls – of which 64 were up and running – since the beginning of the year.

This has allowed it to boost the number of money-spinning machines from 406 to more than 660 so far.

Rank also owns the Grosvenor Casino chain, which has seen a 14% rise in like-for-like revenue during the past six weeks.

Admissions were down 14% but average spending among the customers still gambling jumped 33%, suggesting punters with bigger bankrolls had not yet been deterred from the tables.

Rank will soon have a new casino at Shiprow, in Aberdeen, operating under the G Casino brand.

It opens to the public on Friday, November 7.

Overall group revenue in the 41 weeks to October 12 fell 8%, as the firm struggled with the tough comparisons of the previous year.

It also said trading at its Spanish arm, Top Rank Espana, was being hit by the wider problems of the economy in that country.

The firm’s Blue Square betting website grew revenue 1% over the year so far, largely thanks to its meccabingo.com site. Sports betting revenue slid 11%, however, in a increasingly competitive marketplace.

Rank shares rose 7.5% to 60.5p following the update. Investec analyst Matthew Gerard said: “After a year of significant upheaval, Mecca and Grosvenor are delivering positive like-for-like revenue growth, driven by management actions and an uplift in machine revenue. While the outlook for 2009 is uncertain, a self-help story leaves Rank better placed than most.”