Rank's Revenue Growth Is Steady; Board Considering Sale of Hard Rock
U.K.-based gaming and entertainment company Rank Group Plc (RNK.L) has released a trading update for the half-year period ended June 25, 2006, stating that revenue growth has remained steady, although profits in the gaming division remain under pressure from rising business costs and the smoking ban in Scotland is negatively affecting bingo revenues. The Blue Square online gaming and betting shop unit is showing strong year-on-year improvements in revenue and operating profit.
Rank's Hard Rock division continues to trade strongly and is entering a new phase of its development as it seeks to expand its business in the restaurant, casino and hotel markets. Rank also revealed that it has retained Merrill Lynch International to assist a review of the potential strategic options for Hard Rock and to assess whether it should remain part of Rank or be sold. Hard Rock generates about 30 percent of Rank Group's earnings, and market analysts estimate that the division could achieve a sale price of between £450 million and £550 million.
Should Rank decide to pursue a Hard Rock sale arrangement, it seems plausible to expect private equity firms such as Permira, Blackstone, Candover and Cinven--as well as American gaming firms--to show interest. The sale would reduce Rank to a more gambling-focused company, and takeover bids from gambling groups and private equity firms could easily be anticipated.
Rank also informed the market of its progress toward its earlier stated plan to return £200 million to shareholders through a share buy-back program. The company stated that it has purchased and cancelled a total of 45.9 million shares in The Rank Group Plc at a cost of £102 million.
Gala Coral Named Britain's Largest Independent Company
British gambling group Gala Coral ranks as the country's largest private company in terms of sales after having earned £7.4 billion in the last year. The company sits atop KPMG's Top Track 100 league table, which was compiled by research and events company Fast Track and appeared as a supplement to this week's Sunday Times. Gaming group Betfred made the list at No. 43 and Bet365 ranked in at 58.
ubet2win Reports Annual Loss
British online bookmaker ubet2win Plc (UBT.L) experienced a loss of £264,000 in 2005, its first full year of trading. The company stated, "The year to 31 December was very much a start-up period for the company, and the results reflect this." The company launched an Internet poker site in January and hopes that it will produce strong revenue growth.