Trading at Rank's Scottish bingo halls has been "difficult"

Like-for-like sales at its Mecca Bingo Clubs in Scotland had fallen 15% since smoking was banned in public places.

Overall pre-tax profit at the group fell to £44.4m in 2006, down 13.7% from £50.5m a year earlier.

Rank said its main focus was preparing for the ban, which begins in Wales on 2 April and in England on 1 July.

While the firm has no casinos in Scotland, it said industry data showed casinos north of the border had been adversely affected by the ban - a development that suggested sites in England and Wales could be hit.

Ban strategy

The firm recently agreed a £490m deal to sell-off its Hard Rock Cafes and now plans to focus on gambling.

Rank added it had "a broad strategy" in place to deal with the smoking ban - including improving facilities for casino and bingo hall customers who wish to smoke and recruiting non-smokers.

The group, which also owns Grosvenor Casinos, said its internet bookmaker Blue Square had performed well, increasing its operating profit by 680% to £7.8m.

But Rank also warned that changes to gambling regulations in September would hit its bottom line.