Treasury is our biggest problem, says Rank - Thursday 6th of August 2009

Casino and Mecca bingo owner Rank has said the biggest challenge the company faces is the "volatile nature of HM Treasurys fiscal policy".

Reporting a first-half profit which beat forecasts, Rank said the Governments decision in this years Budget to raise the duty on bingo from 15pc to 22pc and other measures will cost it 9m in profits this year.

Ian Burke, chief executive, is continuing to lobby for the tax to be lowered but said he "wouldnt offer odds" on when and if Rank would succeed.

Mr Burke said another arm of Government, the Department for Culture Media and Sport, had been helpful to the industry by allowing a greater number of higher-stakes slot machines in bingo clubs at the same time the Treasury was bringing in the tax increase.

The tax rise follows Ranks successful court case to reclaim VAT paid on interval bingo games, which saw 59.1m refunded to the company last year.

Rank said its casino business performed better than bingo in the first half, with revenue up 4.4pc to 106.7m. Mr Burke said measures such as an improved range of food and drinks and a loyalty scheme have attracted customers. Revenue at Mecca bingo slipped to 116.3m from 116.9m and operating profit fell 16.3pc to 19m, partly because of the higher tax rate.

Rank reported a pre-tax profit of 27m for the half, recovering from a 76.6m loss last year, and revenue rose 3.5pc to 266m.

The company will not pay a first-half dividend, and said its payment to shareholders will resume when trading conditions improve.

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