Rank Group (LON:RNK) has reported flat revenue for the first 15 weeks, against a strong 2015 comparative. Mecca digital has just been relaunched, supported by a new TV campaign, and better cross-sell remains a key opportunity for Rank. We expect profits to be H2 weighted, and with a slightly uncertain consumer outlook we have trimmed full year estimates, but Rank remains strongly cash generative. This underpins its progressive dividend payout and leaves it flexible to take advantage of acquisition opportunities.
A flat start to the year
L-f-l revenue for the 15 weeks to 9 October grew by 1%, with total revenues flat. Grosvenor venues in particular faced a tough comparative, with l-f-l revenue down 1% versus a 2015 period that grew by 10% (helped by a strong win margin). Mecca venues’ flat l-f-l was a solid performance. Grosvenor digital’s 30% growth (off a small base) was partly offset by Mecca digital (-4% as expected, due to the platform migration disruption), leaving overall digital revenues up 7%.
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