UPDATE 1-Rank says trade weakening after H1 profits halved

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LONDON, July 31 (Reuters) - Rank Group (RNK.L), the British bingo, casino and online gaming firm, said it had seen a slight weakening in its performance over recent months as it reported that first-half profits had more than halved.

Rank, which has been hit by legislation banning both smoking and lucrative gaming machines in its bingo halls, said the trading environment for all its businesses was challenging, with rising operating costs and its customers under increasing financial pressure.

"We remain cautious on the outlook for the rest of the year, given the present uncertainties surrounding consumer confidence," said Chief Executive Ian Burke. Adjusted pretax profit fell to 17.6 million pounds in the six months to end June, from 37.3 million the year before. That was at the upper end of market expectations that ranged from 13.5 million to 17.9 million pounds, according to a Reuters poll of four analysts.

"Although group revenue and operating profit were substantially lower than in the first six months of last year, our performance reflects a significant improvement compared with the second half of 2007," said Burke.

Rank confirmed it would not be paying an interim dividend but will resume dividend payments once trading conditions and the market outlook have improved.

Shares in Rank, which have outperformed the FTSE All Share Travel & Leisure Index .FTASX5750 by 3.6 percent since the start of the year on bid speculation, were down 1 percent at 74.5 pence at 0930 GMT. (Reporting by Matthew Scuffham, editing by Will Waterman)