The Rank Group (LON:RNK) Posts Earnings Results

The Rank Group (LON:RNK) announced its quarterly earnings results 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 Up 0.9%

RNK traded up GBX 0.80 during trading on Thursday, hitting GBX 91.80. The stock had a trading volume of 361,185 shares, compared to its average volume of 774,040. The stock has a 50 day simple moving average of GBX 101.90 and a two-hundred day simple moving average of GBX 123.33. The company has a debt-to-equity ratio of 58.20, a quick ratio of 0.65 and a current ratio of 0.47. The Rank Group has a twelve month low of GBX 75 and a twelve month high of GBX 166.20. The company has a market capitalization of £430.02 million, a PE ratio of 9.66, a PEG ratio of 1.75 and a beta of 2.48.

Analysts Set New Price Targets

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

The Rank Group Company Profile

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.