Rank Group’s Hard Rock division outperformed the firm's bingo and casino divisions during the 16 weeks to 16 April, posting a 9% increase in like-for-like sales at its company-operated outlets.
Food and drink sales rose 12% in the period, while merchandising sales were 4% ahead, buoyed by the company’s flagship Hard Rock Café in New York, which has relocated to Times Square.
Rank said it continued to take action to improve the Hard Rock estate. It has closed two underperforming sites since the turn of the year and is on target to open between five and seven new sites during 2006, mostly franchised operations. The Hard Rock gaming arm also performed “strongly” during the period.
In contrast, Rank said profits at its other gaming divisions “remain under some pressure” due to higher business costs (including energy), changes to the taxation of gaming machines, and the impact of the Scottish smoking ban on its Mecca Bingo estate.
Revenue at Mecca was flat year-on-year, with a 2% rise in spend per head compensating for a 2% decline in numbers. Rank said it was monitoring the impact of the ban closely, and will provide a more detailed assessment in its interim results, due in September.
The group’s Grosvenor Casinos saw a 12% increase in revenue, along with a 14% rise in admissions across the estate, but Rank noted the admissions growth had yet to translate into an increase in handle (the term for the total amount of wagers made by the players at a game during a specific period of time) as the new members were more likely to play machines than games.
Rank’s machine estate was subject to approximately £5m in additional VAT payments arising from the changes to the tax on Section 21 machines in December 2005, and the company expects to pay a further £750,000 this year when the increase in Amusement Machine Licence Duty is imposed from August.
The firm’s Blue Square division has made “a strong start to the year”, increasing sportsbook margins and seeing continued growth in online gaming.
Rank added it was in the “early stages” of negotiations to sell its troublesome Deluxe Media division via separate disposals of its constituent operations.
The group has completed some £45m of the £200m share buy-back programme it announced in March.
