Rank Share Discussion Threads

[scrapman] 13/4/2011 10:31

Thanks for that Logan , thought I was talking to meself there for a while

[loganair] 12/4/2011 13:58

It looks like Rank may have a little more cash to come back from HMRC:

Plenty of chips to play with After HMRC reluctantly handed over £74.8m (with a further £79.5m of interest due), Rank is close to getting a full house in terms of the various VAT claims it has lodged (only slots to go now).

Assuming Rank gets to keep the money, management will have to decide what to
do with it. The organic development programme is already fully funded from cash
flow and following receipt of the interest (due later this month) Rank will be left with net cash. Add the expected £47m year-end net cash position, then in theory the company could return £286m or 73p to shareholders. A fair value for the shares following the return would be 130p. Therefore, under this scenario the total value would be 203p per share.

Another alternative is for management to use the proceeds to fund acquisitions.
This would most likely be in the area of land based casinos. However, beyond a
bid for Gala's casino business, the opportunity doesn't appear that significant. Given the issues that have surrounded Gala it is difficult to accurately guess what the business is worth but based on the £30m EBITDA it achieved in 2010, we think £300m is a reasonable ballpark assumption. Financially this is a deal Rank could do without recourse to shareholders. The competition authorities would likely look at such a deal but Rank would argue that given the nature of the casino business, it is in no position to manipulate prices to the detriment of the consumer. Whether Gala's shareholders/financiers are in a position to sell at this point in time or at this level is another matter.

At the current point in time we feel that the most likely outcome is that Rank does return cash to shareholders but that management will want to keep their options open so it may restrict borrowing to 1x EBITDA. This would still return about 38p per share. Whatever, the company decides to do with the cash, the shares represent excellent value at this level.

Source: Peel Hunt estimates (this is the third time in the past 6 months they have increased their estimate.)

.................2011E................ 2012E
........Previous..New..Change.Previous..New.Change
PBT.(£m).56.4.....58....0.3%... 59.9....67.6..13%
EPS.(p)..10.4.....10.8..4%......11.2....12.8..14%
DPS.(p)...2.8......2.9..3%.......3.1.....3.6..15%

[loganair] 12/4/2011 13:47

Peel Hunt - Rank Group (Buy, TP 179p)

The group has taken time to shake of the shackles of the past in terms of
perception, but over the last two years Rank has been one of the best performing stocks in the sector. The recent VAT success could see a significant return of value to shareholders, or possibly used to finance a move for Gala Casinos; either should be well received by the market.

[loganair] 12/4/2011 13:33

Still here or there as it is and waiting.

The Investors Chronicle reconed 'Keep buying Rank Group' at 155p, 'now that it has settled its long running VAT dispute with HMRC' while brokers at Peel Hunt wonder how the windfall will be used within the company. Rank could have surplus of over £40m by the end of 2011, wiping out around £110m of net debt and leaving Rank free to pursue acquisitions in online gaming and casinos, notes the broker.

[scrapman] 09/4/2011 10:30

Logan , you about , any views on the spike in volumes this week , ?

[scrapman] 08/4/2011 09:52

unusual volumes of late , something happening ??

if todays 2x 250000 are not a roll , it would give a bit of reason why the price was knocked this week ,

[scrapman] 29/3/2011 09:19

looks like 150p is the new 130p , stuck here untill something else happens

[scrapman] 28/3/2011 08:51

seems like 185 is very realistic , if the rebates hold up , and another chunk of change on the way for interest

[nellie1973] 23/3/2011 17:59

Broker upgrade today target 185p

[scrapman] 23/3/2011 08:52

Yes I know you have been perplexed by the BT holding , makes a mockery of the reporting rules ,

Where do you see the share price heading in the next few weeks , ??

any chance that with the cash in the bank a new interested party will show their hand , Guoco and Gentings stake , plus a few others , and it's a done deal

[scrapman] 22/3/2011 17:06

hi Logan , seems like HMRC have given up the ghost , maybe clearing the decks prior to the budget ,

if this does not tempt Guoco , nothing will

+++++++++++++++++++++++++++++++++++++=

C&P from Yahoo


British bingo hall and casino operator Rank Group said it had received a tax and interest charge rebate worth around 154 million pounds, sending its shares up 16 percent on Tuesday. Skip related content

The group, which runs Mecca Bingo, said it had received 74.8 million pounds from Her Majesty's Revenue and Customs (HMRC) in overpaid VAT tax. The repayment covers VAT paid on games of bingo from 1973 to 1996.

Rank said it would also receive around 79.5 million pounds of interest relating to this claim later in March.

"These repayments follow successive rulings in Rank's favour in both the First-tier Tribunal's tax chamber and the High Court," Rank said in a statement.

Shares in Rank rose by 16 percent to 150 pence following the announcement, valuing the business at 580 million pounds.

HMRC has appealed the rulings, however, and the claims will now be considered by the European Court of Justice.

Rank said it expected that this appeal will be heard in 2011 and it would make the appropriate repayments if the appeal is successful.

"The claims concern the inconsistent application of VAT to bingo revenue generated by Rank's businesses. It is Rank's contention that this inconsistency contravened the European Union's principle of fiscal neutrality," Rank said.

(Reporting by Matt Scuffham, Editing by Rosalba O'Brien)


========

Is that + to aprox 50p a share ??

[loganair] 22/3/2011 16:48

This is unexpected fantastic news.

With already £101m back from HMRC over the past 15 months now another £74.8m plus £79.5m in back interest making a sub total of £154.3m, a total in 15 months of £255.3m.

They are now in a position to easily pay of their debt, (Net debt of GBP123.4m). This will also save them a few £m in interest payments which can go straight to the bottom line.

[5dally] 22/3/2011 16:25

Nice jump on that news :-)

[scrapman] 16/3/2011 09:15

All very quiet in here (again)

Am in Far East at the moment , last week in Malaysia ,local buiseness paper there had an article that many Malaysian company looking to buy overseas company's as a lack of M&A opps in local market ,

wish they would hurry up then !!

[randolph and mortimer] 02/3/2011 11:23

Does not not one think that there may be fewer Middle Eastern punters, or certainly, less cash flowing in places like the Victoria, given the state of the MENA region?

It might even be the end of the football boom if Crown Princes no longer have access to a cash float which may or not be there in time.

[loganair] 01/3/2011 11:05

Peel Hunt 28 February 2011:

Rank Group (Buy, TP 160p from 145p) - Upgrade post final results

The reinvention of Rank into a focused company with a track record of overdelivery continued with last week's final results. Adjusted PBT came in 4% ahead of our forecast (which we had already upgraded twice during the year). Given that the December snow probably cost over £2m of lost profit at Mecca, the 2010 result was even more impressive.

2011 has started solidly with LFL sales up 2% at the group level. Grosvenor is off 6%, but this is the result of a below-average hold in the London casinos; visits are actually up 16% across the division. The interest charge will be higher than we originally expected, and this is largely because of the forthcoming refinancing. As a consequence, we are putting through a 3% upgrade to our EBITDA forecast for 2011, but after the higher interest charge this equates to a 1% rise at the PBT level. The company has guided to a lower tax charge, so the advance at the EPS level is 3%. While this is not a spectacular increase, Rank has consistently outperformed (in the underlying business) over the past few years and a further upward revision to forecasts is possible.

We are moving our target price to 160p from 145p, reflecting the benefits to cash flow from the lower tax charge going forward and the marginal upgrade to numbers. At 160p, the prospective EV/EBITDA would be 7.7x for 2011E, falling to 7.2x to the following year. This is supported by a sum-of-the-parts valuation and DCF. Furthermore, this does not include the potential receipt of further tax claims, which could be worth at least £65m.

Rank presents both a recovery story (Mecca and Interactive) and expansive growth (casino). Management has done an excellent job in a difficult market and with debt falling and strong cash generation, it has the weapons to maximise the opportunity. Buy.

Rank Group - changes to forecasts

............................2011E................2012E
Y/end December (£m) Previous New Change Previous New Change
EBITDA................93.0...95.6...3%....96.6...98.6...2%
PBT...................56.1...56.4...1%....58.8...59.9...2%
EPS (p)...............10.1...10.4...3%....10.4...11.2...8%

[loganair] 25/2/2011 15:15

Rank believes that it is prudent to retain balance sheet flexibility until such time as appeals from Her Majesty's Revenue and Customs ('HMRC') against the Group's VAT refunds are fully and finally resolved. We expect the European Court of Justice to deliver a final ruling in this matter within the next 18 months.

Peel Hunt were remarkably accurate with their 2010 estimates.

Est Adj PBT £53m Actual £55.2m
Est Adj EPS 9.7p Actual 10.2p
Est Divi....2.4p Actual..2.4p increasing by 23% over last year. With a Final Dividend of 1.66p to be paid on 04 May 2011, on the register by 01 April 2011.

And also Net debt of £123.4m down from £186.8m last year 2009.

Overall I think a very good set of results.

[loganair] 22/2/2011 19:14

Rank sets out to discover home truths - By Rose Jacobs

Rank Group, the company behind Grosvenor casinos and Mecca bingo, has become the latest UK group to employ immersive market research to better understand its customers.

Rank is sending senior staff into the homes of customers to probe daily habits that would sometimes seem to have little to do with its products and services. In addition to long interviews, researchers photograph the subjects at home, travel with them on their journeys to bingo clubs or casinos and observe them throughout their visits. The process can take six hours or more.

And yet while qualitative market research – of which immersive observational studies are one part – is usually more time consuming and expensive to conduct than quantitative surveys, it now takes a chunk of many R&D budgets.

"Qualitative research has grown as fast if not faster as a proportion of the total," said Ben Page, chief executive of Ipsos Mori, the UK arm of global research group Ipsos.

He estimates that 15 to 20 per cent of his company's work is qualitative.

Unlike other companies, however, Rank wants its top executives to take part. Ian Burke, chief executive, has already spent a day following a couple from their home to one of the company's casinos and observing them there. "At Mecca, there are already back-to-floor initiatives [in which head office staff work at the clubs]," said Jon McPherson, Rank's group head of insight and analytics. "But immersion with a customer is very different from seeing things through the eyes of the employee."

The push follows a year in which Rank stemmed a decline in Mecca revenues by getting customers to spend more per visit – in part through new offerings, such as food and drink table service and "After Dark" bingo, a looser form of the game.

Luring more people in is the next task – and one Mr Burke has said cannot be accomplished without a better understanding of why people go to bingo halls.

Mecca has paid out ... £500,000 during 2010 on "customer insight". Rank spent £1.5m ($2.4m) during 2010 – about 2 per cent of operating profits – divided equally between qualitative and quantitative approaches.

"It's been Ian's passion," said Mark Jones, managing director of Mecca. "It's not just research, it's 'insight', which is more intrusive, but in a positive way."

Mr McPherson hopes even to involve Rank Interactive, the group's online division. "We have good technology for measuring how people move around a [web] page, but we don't know if people come home, put the children in bed, make a cup of tea and then sit down at the computer."

He admits these immersions could be difficult to arrange. The Mecca research might involve two hours in a customer's home before going to the club, but with Rank Interactive it may mean "staying in the customer's spare bedroom".

[loganair] 22/2/2011 17:39

21st February Peel Hunt: Rank (Buy, TP 145p)

Preview of final results, Friday 25 February

The group is due to report final results on Friday 25 February. Despite the impact of the snow in December, we expect the group to deliver profits in line with our expectations of £53m, up from £48.5m last time.

Grosvenor will be the star of the show and we are looking for operating profits to rise 17% to just over £36m. This growth is being driven by volume and positive like-for-like sales, with the G casino format working well. There is a pipeline of new sites and conversions and, while like-for-like benchmarks will get more demanding, we expect further growth in the current year.

For Mecca, it is a case of stability, with profits likely to be down by £1m to £31.3m. Without the impact of the snow in February and December last year, the result could well have been flat. Management is still experimenting with the Full House concept, but at some point more detail will be needed if the market is not to become frustrated at the lack of progress. Nevertheless, we believe that management will get Full House right and that the opportunity across the estate could be significant. In the meantime, there is the potential for more favourable machine legislation that should boost the business. In Spain, we expect flat profits at TR Espana (£5.8m).

Profits from the Interactive division will be influenced by the timing of investment/marketing spend but we are expecting a flat (£7.5m) outcome for the year. Bingo will be the star and at last Mecca is beginning to punch its weight online. Blue Square is another story and although helped by a World Cup, we wonder about the long-term future of the business within Rank.

We expect the current trading statement to be positive, with the absence of snow a factor. Evidence from other leisure businesses suggests that the consumer is still active and we do not see why this shouldn't be the case for Mecca and Grosvenor.

Management has done an excellent job at Rank against a challenging economic
backdrop. Organic opportunities present themselves for both Grosvenor (non
operating licences and new licences) and Mecca (Full House and positive
legislation). After a strong run, we are not surprised that the shares have paused for breath. Positive legislative developments, new licenses and positive progress with Full House are all catalysts that could see the outperformance resume.

Y/E...Dec..2009A.2010E.2011E.2012E
Sales.(£m).540.0.574.2.593.3.612.1
EBITDA.(£m).83.9..89.5..93.0..96.6
Op Margin(%)10.7..10.5..10.6..10.7
Adj PBT(£m).48.5..53.0..56.1..58.8
Adj EPS.(p)..8.9...9.7..10.1..10.4
EPS growth(%)22.6..8.6...4.4...3.2
DPS.(p).......1.4..2.4...2.7...2.9
PER.(x)......14.4.13.3..12.7..12.4
Div yield.(%).1.0..1.8...2.1...2.2
FCF yield(%).14.9.12.8..11.6..12.2
EV/EBITDA(x)..8.2..7.1...6.7...6.3

[thorpematt] 10/2/2011 22:50

Interesting stat for sure - I'm guessing it's Bingo related?
Not that many Poker females (% wise) and sports betting is usually male dominated too (cricket, footy, F1 e.g).

Good for Rank if correct I guess.

[loganair] 09/2/2011 13:54

Quite interesting. At 04.30 this morning on Radio 4 I was listening to the founder of BWIN, the Austrian on-line gaming company.

He said how before he started BWIN he popped over to see Ladbrokes, Coral and Rank, all of who already had on-line gaming and how surprised he was in less than 2 years BWIN's market cap. had over taken the lot.

He then went on to say the big problem with too many UK companies is that due to the average age of their directors they were good at managing decline but not at rejuvenating their said companies. And this is why directors need to be under the age of 45 years as they are better able to cope with change and modernizing companies.

Something I didn't know, that except for the UK, 97% of on-line gamblers are male were as in the UK it's approxiamtely 50/50 male/female.

[grizzly bare] 09/2/2011 11:58

Thanks Killie for info.