Rank Group (RNK) H2 2010 earnings summary

Executive summary

• Gross revenue £567.8m; EBITDA £92.3m, operating profit £62.0m, adjusted PBT £55.2m and adjusted EPS 10.2p, all above 2009.

• Operating cash flow £93.1m; net debt fell to £123.4m from £186.8m; dividend per share rose to 2.40p from 1.35p.

Financial highlights

• Statutory profit before tax £73.5m vs £52.0m; profit for the period £53.2m vs £38.5m.

• Adjusted profit before tax £55.2m vs £48.5m; exceptional items were £19.0m vs £2.8m.

• Operating cash inflow after capital expenditure and disposals was £41.6m vs £54.6m; cash flow before dividends and financing items was £68.8m vs £36.7m.

• Total operating costs increased to £505.8m from £482.0m; marketing rose 14.3% and depreciation 17.0%.

Outlook and guidance

• FY2011 capital expenditure forecast at £50m–£55m, with a pre-tax return on capital target above 15%.

• G Casino target remained at least 20 venues by FY2012; one new build and at least two conversions planned for 2011.

• In the eight-week trading period, visits grew at Grosvenor Casinos and Mecca Bingo, Rank Interactive momentum continued, and London casino performance was held back by lower win margins.

• Refinancing was expected in 2011; VAT resolution was expected by end-2012.