Discussions between Gala Coral and Rank Group over a possible sale of the former’s casino business are “ongoing."
Gala Coral made the statement in its latest round of financial results.
Rank, which operates Grosvenor Casinos, announced in January that it was in talks with Gala over the possible acquisition of its casino arm. Rank is the UK’s second largest casino operator, while Gala is the third. It is thought the deal could be worth in the region of £250m.
Neither company has speculated on the nature of the possible transaction but in its financial announcement Gala described them as “discussions on the possible disposal of UK casinos.”
Gala Coral’s Gala Casino business saw turnover increase by four per cent to £42.1m during the 16 weeks to January 14.
Although the company’s strategy of focusing on higher value players resulted in a 10 per cent fall in admissions, Gala Casinos enjoyed an improvement in gaming drop per head of 15 per cent during the period.
Total gross profit stood at £35.9m, compared with £33.6m in the corresponding period in 2011. Gaming delivered gross profit growth of six per cent, with gross profit from machines increasing eight per cent. The latter was attributed to the renegotiation of contracts and improved customer service.
The company said that it planned to roll out 500 new Sabre electronic roulette terminals from Inspired Gaming during the second quarter of the year, which are expected to support gaming growth over the course of the year.
Gala Casino’s EBITDA of £8.2m was six per cent ahead of the previous year.
Overall, group turnover totaled £352.8m for the period, while gross profit and EBITDA stood at £271.5m and £78.4m, respectively. Performance across all of the group’s businesses improved, with the exception of its remote division.
“We are pleased with the progress in trading since our last update, with continued positive momentum across all of our businesses, helped by a much milder winter,” said Carl Leaver, Gala Coral’s chief executive, noting the strong growth shown by both its bingo and bookmaking arms.
“The recent weeks have been more challenging, however, due to the adverse weather and we continue to be cautious about the impact of the economic outlook on our businesses.
“Accordingly, while these first quarter results put us on track to meet our growth targets across all of our businesses in 2012, we have put robust profit protection plans in place.”
