By Rahul B and Noor Zainab Hussain
(Reuters) - British casino operator Rank Group (LON:RNK) Plc is still on the lookout for M&A opportunities after talks over a joint bid for William Hill Plc (LON:WMH) ended last week, and will expand its online services to strengthen its business.
Gambling faces higher taxes and tighter regulations in Europe, and a series of mergers has intensified competition as firms market themselves to younger sports fans betting via mobile apps.
Rank and online gambling firm 888 Holdings Plc had wanted to jointly take over rival William Hill but they gave up their pursuit on Thursday, saying they had not been able to meaningfully engage with William Hill's board.
Rank, whose business is predominantly in Britain where it owns the Mecca Bingo and Grosvenor Casinos chains, was still scouting for deals, its head said on Tuesday, after the company posted a 4 percent rise in annual profit but lifted its full-year dividend by 16 percent.
"The company has been looking at M&A for the last 18 months and continues to do so and there is definitely a focus on the digital arena for that," CEO Henry Birch told Reuters.
He declined to say whether Rank was now pursuing a two-way deal with 888.
Adjusted profit before tax rose 4 percent to 77.4 million pounds ($102 mln) in the year ended June 30, helped by efforts to strengthen its multi-channel offer.
Revenue rose just 2 percent to 743 million pounds, but online revenue grew 11 percent, Rank said.
Birch said Rank would introduce a single account and single wallet across its retail and online businesses, allowing its customers greater on-the-go access. It would also launch a new online bingo brand in the second half of the financial year ending next June.
Trading in the seven weeks to Aug. 14 had been "positive" and in line with management's expectations, the company said, adding it expected Britain's vote in June to leave the European Union would have little or no direct impact on Rank's performance.
"Rank management and, we infer, the majority shareholder, has made it clear that Rank is open to participating in the consolidation of the sector. Today's results show that it will be ready when the right offer comes along," Peel Hunt analyst Ivor Jones said in a client note.
Rank is 56 percent owned by Hong Leong Company (Malaysia) Berhad, according to Reuters data.
Rank shares rose as much as 7.5 percent after the company said it would pay a final dividend of 4.70 pence per share, pushing its full-year payout up 16 percent. Its dividend cover, however, was 2.4, down from 2.6 last year.
The shares later paired gains to trade up 2.8 percent at 227.8 pence by 0846 GMT.
(Reporting Noor Zainab Hussain and by Rahul B in Bengaluru, writing by Esha Vaish; Editing by Gopakumar Warrier and Susan Fenton) OLGBBUS Reuters UK Online Report Business News 20160823T053627+0000