Rank is worth substantially more than 150p per share ... - Rank Group

Well Positioned for Future Growth
4
Wider Distribution of Rank’s Brands via Online and Mobile Media
• Future growth across Rank’s brands can also be driven by providing customers with the distribution channel to
suit their preference.
• Rank’s brands are currently available across multiple channels but driving closer operational integration and the ability
to cross-sell between channels represents an important source of future growth.
Community / Bingo Casino Sports-led Community / Bingo
Venues ✓ ✓ – ✓
Online ✓ ✓ ✓ 2011
Mobile ✓ ✓ ✓ –
• Continue to drive • Increase cross-over • Launch of Blue • Launch of online
Initiatives/
Opportunities
scheme to reward
clubs for promotion
of MeccaBingo.com
Launch of Mecca
•
Bingo ‘app’
12
1
Estimated incremental operating profit.
between land-based
and online casinos
Square ‘app’
gaming in Spain
Online-Offline Crossover Rates
Market 6% 12% 10% –
Rank 5% 1% – –
• Typically, customers who play with Rank in venues and online generate significantly greater revenue than
customers who just play on a single channel. Driving greater participation across channels to leverage brands
and customer relationships represents a significant opportunity for Rank.
5
Option over International Expansion
• Rank’s businesses in Spain and Belgium together contributed approximately 10% of revenue in 2010. In 2011
they face challenging trading conditions due to the economic environment and the implementation of full
smoking bans.
• With performance in these markets expected to improve over the medium term, Rank’s overseas businesses
represent an opportunity for growth. Developing these “footholds” in a measured way at the same time as
pursuing positive regulatory change represents a further valuable growth option:
—— Spain: online gaming to be launched in H2 2011; and
—— Belgium: online legislation in place with casino licences restricted to the four land-based operators.
6
Evolving Nature of the Regulatory Environment
• In line with its policy of constructive political engagement, Rank believes that regulatory change will be a
net benefit to the industry over the near and long term. Recent successes have included positive changes to
amusement machine regulation and taxation in both Spain and the UK.
• Conservative Party commitment to reduce bingo duty to 15%
Near Term • DCMS proposal to allow more B3 machines in bingo clubs
•
Long Term
+c.£7m per annum 1
+c.£1m per annum 1
Engage with governments and regulators to continue to shape their approach to regulatory
change in the interests of customers and shareholders