Rank knocked by Scots smoking ban

The Scottish smoking ban wiped £4.5m from Rank's annual profits in 2006, the company's chief executive Ian Burke said yesterday.

Some 50 per cent of bingo players indulge in a nicotine habit - more than twice the national average - and the company has been rocked by the impact of the ban on the gaming habit.

Overall pre-tax profits from continuing operations fell to £44.4m from £50.5m.

Mr Burke is now planning a series of measures to try to cushion the blow when a similar ban comes into force in England and Wales in July. That includes the provision of sheltered outdoor smoking areas, mobile terminals to enable people to play outside, and improvements to the company's prize board.

But Mr Burke urged the Government to abolish VAT on bingo stakes: "That is completely unfair. The bingo player pays twice what someone who visits a betting shop pays because there is VAT and the gross profit tax [on gaming profits].

"The Bingo Association is lobbying hard to get to address this. Without action, smaller clubs will have to close down. Bingo is a social activity, and in many smaller towns it is the only leisure activity available for many people."

Overall operating profits from the bingo operations fell to £72.1m from £87.9m, with other issues hitting the group, including a rent rise on its bingo halls after Rank's sale and leaseback of its property portfolio, and the loss of some gaming terminals because of changes to gaming law.

Mr Burke said the company was interested in bidding for several of the 17 new casino licences being granted by the Government, including Britain's first Las Vegas-style supercasino, which is likely to be located in Manchester if ministers can stave off a threatened backbench rebellion in favour of Blackpool.

Hard Rock, the restaurant business, grew profits by 16.1 per cent but they are not included in the adjusted pre-tax figure after the £490m sale of the business agreed in December last year.

Other sales include Deluxe Film and US Holidays. A £350m special dividend will be paid on 9 April with some of the proceeds.