Casino operator Rank still on lookout for M&A opportunities

* Focus on expanding online business with new products

* Rank still scouting for M&A across the board - CEO

* Online revenue rises 11 pct

* Shares (Berlin: DI6.BE - news) rise as much as 7.5 pct

(Adds CEO, analyst comments, details, background)

By Rahul B and Noor Zainab Hussain

Aug 23 (Reuters) - British casino operator Rank Group Plc

is still on the lookout for M&A opportunities after

talks over a joint bid for William Hill Plc (Other OTC: WIMHF - news) ended last

week, and will expand its online services to strengthen its

business.

Gambling faces higher taxes and tighter regulations in

Europe, and a series of mergers has intensified competition as

firms market themselves to younger sports fans betting via

mobile apps.

Rank and online gambling firm 888 Holdings Plc had

wanted to jointly take over rival William Hill but they gave up

their pursuit on Thursday, saying they had not been able to

meaningfully engage with William Hill's board.

Rank, whose business is predominantly in Britain where it

owns the Mecca Bingo and Grosvenor Casinos chains, was still

scouting for deals, its head said on Tuesday, after the company

posted a 4 percent rise in annual profit but lifted its

full-year dividend by 16 percent.

"The company has been looking at M&A for the last 18 months

and continues to do so and there is definitely a focus on the

digital arena for that," CEO Henry Birch told Reuters.

He declined to say whether Rank was now pursuing a two-way

deal with 888.

Adjusted profit before tax rose 4 percent to 77.4 million

pounds ($102 mln) in the year ended June 30, helped by efforts

to strengthen its multi-channel offer.

Revenue rose just 2 percent to 743 million pounds, but

online revenue grew 11 percent, Rank said.

Birch said Rank would introduce a single account and single

wallet across its retail and online businesses, allowing its

customers greater on-the-go access. It would also launch a new

online bingo brand in the second half of the financial year

ending next June.

Trading in the seven weeks to Aug. 14 had been "positive"

and in line with management's expectations, the company said,

adding it expected Britain's vote in June to leave the European

Union would have little or no direct impact on Rank's

performance.

"Rank management and, we infer, the majority shareholder,

has made it clear that Rank is open to participating in the

consolidation of the sector. Today's results show that it will

be ready when the right offer comes along," Peel Hunt analyst

Ivor Jones said in a client note.

Rank is 56 percent owned by Hong Leong Company (Malaysia)

Berhad, according to Reuters data.

Rank shares rose as much as 7.5 percent after the company

said it would pay a final dividend of 4.70 pence per share,

pushing its full-year payout up 16 percent. Its dividend cover,

however, was 2.4, down from 2.6 last year.

The shares later paired gains to trade up 2.8 percent at

227.8 pence by 0846 GMT.

($1 = 0.7580 pounds)

(Reporting Noor Zainab Hussain and by Rahul B in Bengaluru,

writing by Esha Vaish; Editing by Gopakumar Warrier and Susan

Fenton)