Rank - Annual Report & Financial Statements 2009

– Group Strategy –

The Group is focused on generating positive returns for shareholders based upon sustainable growth in earnings per share.

We will do this by creating a gaming-based leisure business with leading standards of customer service and entertainment.

In this way, the Group aims to benefit from growth in consumer demand in markets where regulatory conditions often serve to restrict competitor supply growth.

Download strategy sections:
Section 1
‘Deepen our understanding of customer preferences’ (PDF 77 KB)
Section 2
‘Strengthen our position’ (PDF 80 KB)
Section 3
‘Work positively with governments and regulators’ (PDF 56 KB)

Strategic aims	What happened in 2009	Performance and KPIs	Priorities 2010	Risks
To deepen our understanding of customer preferences to shape product innovation, create service differentiation and build enduring relationships	– Major improvements to electronic gaming product and service – Launch of After Dark gaming – Table service food and drink introduced in six Mecca Bingo clubs – 24-hour opening in 17 casinos – Play Points extended to eight casinos – No progress on customer rewards programmes for Mecca Bingo and Rank Interactive		– Major upgrade of electronic gaming equipment in casinos – Expansion of After Dark gaming brand in Mecca Bingo – Cook-to-order food to be introduced into a further 15 Mecca Bingo clubs – Extension of Play Points to ten additional casinos – Roll-out of 24-hour opening	– Customer engagement (i) The effect of macro-economic conditions on consumer confidence may lead to a decline in customer visits and spending. (ii) The failure of our businesses to provide a compelling experience may result in a decline in customer visits and spending.

To strengthen our position in Great Britain whilst assessing longer-term growth opportunities overseas	– G Casino brand reaches ten casinos – Acquisition of two new casino licences – Successful launch of Mecca ‘Full House’ concepts – Greater integration between land-based and online gaming – Increases in market share for land-based businesses – No further expansion into overseas markets		– Continued expansion of G Casino brand – Refinement and further roll-out of Mecca ‘Full House’ concepts – International development led by Rank Interactive – Stabilisation of Top Rank España	– Competitive threats The attractiveness of Rank’s businesses may be undermined by superior or better value propositions from competitors. – Loss of licence Serious breach of gambling regulations may result in the partial or complete loss of Rank’s licences to operate. – Financing and taxation (i) Absence of or withdrawal of financing facilities adequate to meet the Group’s requirements. (ii) Significant increases in the cost of financing. (iii) Reversal of rulings on VAT reclaims.

To work positively with governments, regulators and other relevant stakeholders to create an environment which supports both responsible operation and commercial sustainability	– Increase in amusement machine entitlements for bingo clubs in both Britain and Spain – Significant increases in taxation for bingo and card room games – Cross-party commitments to reduce rate of bingo duty		– Political engagement for creation of simpler, fairer and more sustainable regime of taxation for gaming and betting in Britain – Formal regulation of online gambling in Spain and harmonisation of land-based taxation with online taxation	– Taxation Increases in gaming taxation may damage the Group’s profitability. During 2009, HM Treasury announced plans for the reform of taxation for gaming machines. If implemented, Treasury’s proposals may result in an increase in tax costs for Rank. – Regulation Given the politicised nature of gambling market governance, Rank’s operations may be at risk from adverse changes in regulations, such as restrictions to advertise or to offer certain games.

Underpinned by our business principles of fairness, responsibility and sustainability	During 2009, Mecca Bingo raised £516,000 for Whizz-Kidz, making a positive difference to the lives of disabled children.	During 2010, Mecca Bingo and G Casino will attempt to raise at least £200,000 for Marie Curie Cancer Care.	The Rank Group is working with the Carbon Trust’s Carbon Management programme to cut carbon, energy and costs.	Rank’s contribution to the research and treatment of problem gambling was recognised with the inaugural GREaTest Award.
	Mecca Bingo was named ‘Bingo Operator of the Year’ at the 2010 International Gaming Awards.	During 2009, Rank received the Building Public Trust Award for tax reporting.	The British Safety Council’s five-star award for health and safety.	GamCare has awarded its accreditation to Mecca Bingo, Grosvenor Casinos and Rank Interactive.

Annual Report and Financial Statements 2009

– Group Strategy –