Shares in the UK land and online gambling group Rank Group plc fell almost 4 percent Thursday morning following the release of the company's full year results, which reported a 7 percent year-on-year fall in profits.
The company blamed the fall on a challenging UK retail environment and exceptional items.
Statutory pre-tax profit in the year to 30 June 2017 fell to GBP 79.7 million (FY 2016: GBP 85.5 million), adversely impacted by the underperformance of Grosvenor Casino chains in Southend and Plymouth, the disposal of a Mecca site at Bradford and the restructuring of UK retail operations.
Revenue fell to GBP 707.2 million from GBP 708.5 million due to a “challenging UK retail environment”.
However, the company's digital operations bucked the downward trend experienced in retail, achieving a 12 percent y-o-y growth in revenue.
Rank reported that it had undertaken a comprehensive review of its cost base with a particular focus on labour following the introduction of the National Living Wage in April 2016. Following this, the company decided to reduce front-line labour hours, change its remuneration structure, cut management roles at club level and to simplify its organisational structure.
On the back of these actions, employment costs still rose 2 percent on pay rises and an increase in the minimum wage.
CEO Henry Birch said the new financial year has started well, and revealed that Rank has put in place a number of digital, product and venue-based initiatives which are expected to drive top line revenues in the year ahead.
The company raised its dividend by 12 percent to 7.30p as it cut net debt by 70 percent to GBP 12.4 million and delivered a 6 percent increase in cash generated from continuing operations to GBP 116.3 million.