he company, which will also be deploying portable electronic bingo machines, warned 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.
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 CEO Ian Burke.
Rank also expects the rise in casino gambling duty, announced in March’s budget, to cost its Grosvenor Casinos us$ 15.9 million 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 186.75 p, 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 Jones.
"The bingo estate overall is now much better well prepared for the smoking ban than were the 14 clubs in Scotland," Jones added.