Rank Group (RNK) H2 2015 earnings summary

Executive summary

• FY 2014/15 operating profit rose 16% to £84.0m; H2 profit was up 6% on H1 despite remote gaming duty headwinds.

• Digital revenue grew 21% and operating profit 14%; all brands delivered profit growth.

• Strategic priorities focused on a multi-channel offer, digital capability, venue development, brand investment and technology-led efficiency.

Financial highlights

• Gross revenue was £738.3m, up 4% YoY; operating profit before exceptional items was £84.0m, up 16%.

• Adjusted EPS was 14.6p, up 18%; EBITDA was £126.3m, up 9%.

• Profit before tax was £74.5m vs £14.4m; profit for the period was £74.8m vs £20.2m.

• Cash inflow from operations was £154.5m vs £107.2m; closing net debt fell to £52.9m from £137.0m.

Outlook and guidance

• Current trading for the first 7 weeks was in line with expectations, with positive trends continuing.

• Priorities include growth across brands and channels, a new digital platform, a retail bingo concept, Grosvenor admissions growth and Mecca like-for-like revenue growth.

• Bede platform migration was estimated to launch in Q3 2015/16, likely as a single launch for both UK brands, with Enracha to follow.

• 2015/16 forecast effective tax rate was 21%–23%; cash tax rate on adjusted profit forecast at 17.5%–20%.