Rank sees profits decline and warns of slow start to H2

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LONDON (ShareCast) - Shares in FTSE 250 (FTSE: ^FTMC - news) bingo and casino group Rank dipped into the red on Thursday morning after the company missed profit forecasts with its first-half results amid a 'challenging economic environment'.

Rank, which is in the process of acquiring the Gala Casinos network from Gala Coral (purchased for £205m in May), saw revenue increase by 5.0% in the six months to December 31st to £312m, up from £295.9m the same period the year before.

However, adjusted profit before tax came in £31.3m, down 4.0% from £32.5m and slightly below Panmure Gordon's £34m estimate. This company said this was mainly due to one-off additional marketing costs in Blue Square Bet and higher operating costs in Mecca bingo venues.

Nevertheless, the company bumped up its interim dividend per share by 14% from 1.1p to 1.25p.

The company said it remains confident about its outlook for the full year, but admitted that the second half has got off to a "slow start".

"Rank has delivered a satisfactory set of results in what is a challenging economic environment," said Chief Executive Ian Burke.

"Growth in customer numbers, visits and spend per visit across the Group has been achieved by strong performances in our Grosvenor Casinos venues and in meccabingo.com."

As for the Gala Casinos acquisition, the Competition Commission announced last month that its final report on the proposed transaction would be released on February 20th.

Shares were down 1.49% at 150.62p in early trading on Thursday.

BC