UPDATE 1-Gambling group Rank plans cost cuts after profit warning
LONDON Oct 17 (Reuters) - British gambling company Rank Group plans to cut costs after warning that a poor performance from its bingo business would lead to a fall in operating profit in the six months to the end of December.
Rank, which is majority-owned by Malaysia's Guoco Group and also operates casinos in Britain, said it would act after like-for-like revenues fell 7 percent in the 15 weeks to Oct. 13.
Rank shares fell more than 4 percent to 147.4p in early trading after the profit warning.
The company expects to make up some lost ground in the second half of its financial year, which runs to June, as the cost reductions take effect and it gains additional revenues from 19 casinos bought in May.
"The board anticipates operating profit for the full year to be marginally below market expectations," Rank said, adding that the first half would be "materially below" the 33.4 million pounds ($53.20 million) for the same period last year.
Rank runs 97 bingo clubs in Britain and said that a summer heatwave in July had hurt trade; a complaint also made by Britain's high street bookmakers. Rank added that revenues in its online bingo business had fallen by 3 percent in the face of growing competition.
It now has 55 casinos in Britain after buying 19 from Gala Coral Group in a 179 million pound ($285 million) deal this year.
The new casinos are performing well and will also benefit from planned refurbishments, the company added.
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