As costs continue to rise, Rank Group's first half-year core profits fall

no operator Rank Group Plc has released its half-year results for the six –month period ending December 31 2016.

Despite group revenue up 2% to £378.6, the core operating profit for the group for the first half fell 5% as increased inflationary and employment costs hurt the company, sending its shares down more that 6% in early trading. However, the firm had a solid performance from its digital operations, which offset a decline.

Rank Group CEO, Henry Birch explained that the operator had faced “challenging trading conditions” for its retail casino and bingo division over the first half of the fiscal year. Nonetheless, Birch revealed that both units posted an improved on a year-on-year basis.

The digital division of the operators continued its strong growth over the period, so that it kept its significant potential for the second half of the fiscal year

Debt levels were 37% lower than the year prior at £33m, with group operating profit before exceptional items was down 9% to £36.6m.

Moreover, the firm’s EBITDA before exceptional items fell 5% to £59.7m as introduction of the national living wage, increased property costs and general cost inflation impaired the company.

Birch concludes: “Despite increased inflationary and employment costs, we have detailed plans to improve H2 operating profit and remain confident that the group will make good strategic progress in 2017.

“As a result, the board expects that the full year results will be in line with market forecasts.”

Last year, Rank and online gaming firm 888 Holdings Plc abandoned their efforts to buy William Hill in a cash-and-stock deal in a bit to create Britain’s largest multi-channel gambling operator by revenue. Bit William Hill failed to show any interest in engaging with the consortium and rejected both takeover proposals.