Edison Investment Research - Rank Group PLC (RNK) Rank Group - Weakness in Grosvenor affects EBIT

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Edison Investment Research

Victoria Pease

Rank Group - Weakness in Grosvenor affects EBIT

Rankâ€™s trading update (13 weeks to 1 April) showed 17% growth in Digital, but the core Venues disappointed, with Mecca down 2% and Grosvenor down 9% on a like-for-like basis. The shortfall was largely due to fewer customer visits, as well as a lower gross win margin from VIPs. The company expects the weaker consumer environment to continue and has now guided to FY18 clean EBIT of Â£76-78m vs previous consensus of Â£83m. We have adjusted our forecasts to the lower end of guidance. The stock has dropped sharply on the news and trades at 5.7x EV/EBITDA and 11.8x P/E for CY18e, which is a meaningful discount to peers.

06/04/2018 3 EN

Underlying

Rank Group PLC

Rank Group is a gaming operator. Co. has four segments: Grosvenor Casinos, which is a casino operator that provides a range of casino table games, including roulette, blackjack, baccarat and poker as well as electric casino and slot machine games; Mecca, which is a bingo operator that provides a selection of games from bingo to a range of slot games, and the venues also have food and drinks, and live entertainment; Luda, which is a community-based gaming brand; and Enracha, which is Co.'s community-based gaming business for the Spanish market that provides community games like bingo as well as electronic casino and slot machine games, sports betting, food and drink and live entertainment.

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GB00B1L5QH97 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Victoria Pease

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Rank Group - Weakness in Grosvenor affects EBIT

Rank Group: 1 director

Rank Group - Recovery potential and operational gearing

RANK GROUP sees an upgrade to Slightly Positive due to a better fundamental star rating

Basilea Pharmaceutica - Cresemba milestone payments continue to roll in

AAC Clyde Space - Solid start to the year with further order growth

Tinexta - Typical seasonality in Q124

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