The Rank Group (LON:RNK) Announces Earnings Results

The Rank Group (LON:RNK) released its quarterly earnings data on Thursday. The company reported GBX 5.60 EPS for the quarter, Digital Look Earnings reports. The Rank Group had a return on equity of 3.65% and a net margin of 1.67%.

Here are the key takeaways from The Rank Group’s conference call:

• Group like-for-like net gaming revenue rose 6% to £419.8m and underlying like-for-like operating profit increased 15% to £40.6m, with margin up to 9.7%; the Board recommended an interim dividend of 1p.
• Grosvenor rolled out 850 additional gaming machines (up to 80 per license), driving machine revenue growth and supporting the medium?term target of average weekly NGR of £9.5m and a 500bp margin improvement, with reward schemes and sports?betting trials planned to lift demand.
• The UK digital business faces a pre?mitigation profit hit of about £46m from the new 40% RGD; management has cut marketing and begun supplier negotiations with most mitigation expected by April, but warns of industry consolidation and lower digital profitability in the near term.
• Abolition of the 10% bingo duty from April provides Mecca an annualized benefit of £6.5m, supporting a move to double?digit operating profit next year, while Enracha (Spain) and a Portugal launch are contributing incremental growth.
• Cash conversion was modest (net free cash flow £3.8m), capex guidance was lowered to £50–55m (timing change), closing net cash was £39.4m but including lease liabilities net debt is £165m, and a £6.5m Spanish payment?fraud cash impact was recorded — all of which add near?term cash and liability risk.

The Rank Group Stock Performance

Shares of RNK traded up GBX 1.54 during midday trading on Thursday, hitting GBX 92.54. 342,720 shares of the stock traded hands, compared to its average volume of 773,117. The firm has a market capitalization of £433.49 million, a PE ratio of 9.74, a price-to-earnings-growth ratio of 1.75 and a beta of 2.48. The business’s 50 day moving average price is GBX 101.90 and its two-hundred day moving average price is GBX 123.33. The Rank Group has a 1-year low of GBX 75 and a 1-year high of GBX 166.20. The company has a debt-to-equity ratio of 58.20, a quick ratio of 0.65 and a current ratio of 0.47.

Analyst Ratings Changes

RNK has been the topic of several research reports. Peel Hunt restated a “buy” rating and issued a GBX 200 price target on shares of The Rank Group in a report on Wednesday, October 15th. Deutsche Bank Aktiengesellschaft downgraded The Rank Group to a “hold” rating and lowered their target price for the company from GBX 163 to GBX 104 in a research note on Friday, January 23rd. Finally, Shore Capital restated a “house stock” rating on shares of The Rank Group in a research note on Tuesday, November 11th. One equities research analyst has rated the stock with a Buy rating and one has given a Hold rating to the stock. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus price target of GBX 152.

About The Rank Group

The Rank Group Plc has been entertaining Britain since 1937, from its origins in motion pictures to today’s gaming based entertainment brands. Over the course of more than three-quarters of a century, the Group has entertained many millions of customers in Britain and around the world. The Group’s story is one of iconic brands and talented people with a mission to entertain.