Rank reports profits down in 2006
by Elaine Frei
A ban on smoking in public places that will soon go into effect in England and Wales has leisure group Rank (LSE: RNK) worried about their bottom line. They blame a similar ban that has already been introduced in Scotland for a drop of 15 percent in their like-for-like sales at its Mecca Bingo Clubs there. While Rank has no casinos in Scotland, it said that data from firms that do run casinos there shows that their profits have been affected by the smoking ban.
Rank reported that its pre-tax profit was down 13.7 percent last year, falling to £44.4 million from £50.5 million in 2005. The company also reported that its online bookmaker, Blue Square, saw its operating profits increase by 680 percent to £7.8 million. Along with its report Rank, which recently sold its Hard Rock Cafes to concentrate on its gambling business, said that it will deal with the new smoking bans by upgrading its facilities for casino and bingo patrons who wish to smoke and by trying to bring in more non-smoking customers. The ban takes effect on 2 April in Wales and on 1 July in England.
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