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RANK PLC TRADING UPDATE

Thursday June 23, 2011 : online bingo helps group grow interactive revenues by 28 percent in second quarter
 
Britain's Rank plc land and internet gambling group issued a trading update for the 25 weeks to June 19 this week, revealing that total group revenue rose by 4 percent and like-for-like revenue was also up 4 percent.
 
For the most recent ten weeks growth was even stronger, rising by 7 percent
 
On its internet and mobile operations Rank Interactive grew revenue by 28 percent in the ten-week period with a very strong performance from subsidiary Meccabingo.com.
 
For the year to 19 June, Rank Interactive has grown revenue by 26 percent as a result of cross-selling from Rank’s land-based venues and continued investment in the group’s online brands.
 
Particularly strong growth was achieved in mobile gaming with more than 70,000 customers downloading the Mecca Bingo and Blue Square (sportsbetting) iPhone apps since launch in January 2011 (see previous InfoPowa reports).
 
The trading update comments on the company's Value Added Tax situation, noting that since the start of the year, Rank has received more than GBP160 million in VAT refunds and associated interest from Her Majesty’s Revenue & Customs and is now in a net cash position.
 
Since 2008, Rank has received in total over GBP275 million in overpaid VAT and associated interest, following successful litigation at both the First Tier VAT Tribunal and the High Court.
 
Her Majesty’s Revenue & Customs (‘HMRC’) has lodged a final appeal against these rulings with the European Court of Justice, and this will be heard later this month with a ruling anticipated by the end of 2011.
 
Rank has disclosed that it has submitted further claims for at least another GBP275 million, which it expects will be resolved over the course of the next two to three years.
 
The Rank statement also makes reference to European Commission complaints by Danish taxpayers regarding the provision of reduced rates of duty for online gambling (compared with gambling in land-based venues), which - it is claimed - constitutes illegal state aid. Rank is an advocate of harmonised and equal online and land gambling tax rates.
 
Management gave an optimistic outlook for the coming months, saying the group has made a solid start to the year.



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