Rank shares tank as casinos hit by slowdown

SHARES in casino and bingo firm Rank plunged after it warned of rising costs and slow recovery.

The FTSE 250 group, which owns the Grosvenor Casinos chain, lamented the lack of wealthy foreign customers returning to its London venues following Covid.

The turnout in its Grosvenor casinos had improved since April, but the firm said it has been ‘considerably weaker than expected’.

Rank, which also owns Mecca Bingo, said the performance across its other businesses has been broadly in line with expectations. But this was not enough to offset fears over the impact of inflation and a slowdown in trading.

As such, Rank said it expects profit for the year to the end of June to be around £40m, down from a previous projection of between £47m and £55m.

This was the second time the company has lowered its profit forecast this year.

In April, Rank said it expected profits to range between £47m and £55m, down from a previous forecast of £55m to £65m. Shore Capital analyst Greg Johnson said the ‘crux will be a return in higher-spending international customers over the summer, and we now see a pick-up from July’.

He cut his forecast for Rank’s profits for the next financial year by £8m to £62m, before adding: ‘Despite the continued difficult trading backdrop we remain buyers of the stock.’

Meanwhile analysts at Peel Hunt downgraded Rank’s profit forecasts to £40m from £50m and lowered the target price to 175p from 220p. Shares crashed 18.2pc, or 18p, to 81.2p at one stage.

It’s been a dismal month for the London stock market.

But the week got off to a brighter start with the FTSE 100 up 1.4pc, or 100.75p, at 7117p during the day, and the FTSE 250 gaining 0.4pc, or 68.75p, to 18,94.66.

Energy stocks were among the top risers on the Footsie as the oil price stabilised following a big drop on Friday.

BP gained 2.6pc, or 10p, to 389.45p and Shell climbed 3.3pc, or 67p, to 2111p.

Fellow North Sea oil and gas producer Harbour Energy also rose, by 2.1pc, or 7.1p, to 354.1p, after boss Linda Cook wrote to Chancellor Rishi Sunak and called on him to revise the proposals for the Energy Profits Levy.

British Gas-owner Centrica rose 4.1pc, or 3.2p, to 80.64p on its return to the FTSE 100.

Royal Mail (up 3.5pc, or 9.4p, to 281.4p) and ITV (up 6.2pc, or 4.04p, to 69.48p) were also on the march as they bounced back on their first day back in the FTSE 250 following the latest reshuffle.

Blue-chip mining giant Glencore climbed 3.4pc, or 15.65p, to 476.85p following a warm show of support from brokers after Friday’s trading update on coal and trading.

Deutsche Bank hailed the ‘much needed’ boost and said it points to half-year profits at the coal business of around £7.4bn.

This is ahead of earlier expectations of £5.4bn.

Glencore also said it was on target for its trading business to make profits of £2.6bn in the first half, well ahead of expectations.

Barclays and JP Morgan both said Glencore should be a ‘top pick’ for investors.

Housebuilders weighed heavily on the top flight amid signs the red hot market is cooling.

Research from Rightmove (up 1.5pc, or 8.2p, to 550.2p), the UK’s largest property website, revealed average prices rose by 9.7pc in the year to May, down from a 10.2pc increase in the 12 months to April.

The firm said higher borrowing costs and more homes coming on to the market will see the rate of price growth ease to 5pc by the end of the year.

Shares tumbled across the blue-chip housebuilders. Persimmon was down 4pc, or 78p, to 1859.5p, Barratt Developments fell 3.9pc, or 18.6p, to 453.3p, Berkeley Group slid 4.2pc, or 164p, to 3727p and Taylor Wimpey sank 3.1pc, or 3.8p, to 117.05p.

Among the mid-caps, shares in Vistry fell 2.6pc, or 22.5p, to 839.5p, Countryside Partnerships dipped 1pc, or 2.8p, to 267.8p, and Redrow slid 3.5pc, or 17.7p, to 482.8p.