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 Welcome to
the News desk.
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| Rank takes on the smoking ban with mobile
bingo |
28/06/2007 |
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Graeme
Wearden
Rank Group is installing outdoor shelters with gambling machines at
its Mecca Bingo clubs in an attempt to mitigate the impact of this weekend's
smoking ban in England.
The company, which will also be deploying
portable electronic bingo machines, warned this morning that the upcoming ban
would "hold back profit performance" in the second half of this year.
It said that revenue had fallen by 5% at its three Mecca clubs in Wales
since a ban on smoking within enclosed premises came into force there, in April
2007.
In Scotland, where a ban on
smoking indoors started in March 2006, like-for-like revenues are down 10% so
far this year, with admissions to its 14 Mecca clubs down 13%. This revenue
decline is an improvement on the 15% drop recorded in 2006 after the ban came
in.
"In recent weeks we have begun to see some early signs of recovery
in Scotland," said Rank today.
It is taking several steps to try to
minimise the impact of the ban in England, which will force customers to leave
their seats and go outside to smoke. It is installing "smoking enclosures" at
many clubs, which will include outdoor gambling machines. It also plans to
raise the size of its cash prizes to lure more customers through the doors.
"The initiatives we are introducing are designed to make sure that our
customers' experience of bingo is enhanced rather than impaired by the smoking
ban, with consistently attractive prize boards, the development of electronic
bingo products and the creation of outside enclosures where customers can
continue to play bingo," said Ian Burke, chief executive.
Rank also
expects the rise in casino gambling duty, announced in March's budget, to cost
its Grosvenor Casinos £8m a year.
The warning came in an otherwise
upbeat trading statement. Rank's overall revenues are up 5% so far this year,
and the company said it was delivering "strong growth in operating profits".
Shares in the company, which also runs the Blue Square gambling
website, gained 6p in morning trading to 186.75p, a rise of 3.3%.
Ivor
Jones, analyst at Panmure Gordon, was encouraged that revenue at the Welsh
Mecca clubs only fell by 5%,.
"While this is a small sample and a short
period we are very encouraged that all of the energetic actions of management
are paying off," said Mr Jones.
"The bingo estate overall is now much
better well prepared for the smoking ban than were the 14 clubs in Scotland,"
Mr Jones added.
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