However the operator of Grosvenor casinos and Mecca bingo hall said it aimed to improve operating profit for the second half and expected full-year results to be in line with market forecasts.

Shares in the company fell as much as 6.3 percent to 180.80 pence, making it one of the worst performers on the FTSE Midcap Index.

Rank said like-for-like group revenue grew 2 percent for the six months ended Dec. 31, 2016.

But group operating profit before exceptional items, depreciation and amortisation fell 5 percent to 59.7 million pounds as introduction of the national living wage, increased property costs and general cost inflation hurt the company.

Britain's finance minister in November raised the minimum wage to 7.50 pounds from 7.20 pounds, taking the edge off a benefits squeeze for low earners.

Last year, Rank and online gaming firm 888 Holdings Plc abandoned their efforts to snap up William Hill in a cash-and-stock deal to create Britain's largest multi-channel gambling operator by revenue. But William Hill did not show any interest in engaging with the consortium and spurned two takeover proposals.

Gambling faces higher taxes and tighter regulation, and a series of mergers has intensified competition as firms market themselves to younger sports fans betting via mobile apps.

(Reporting by Rahul B in Bengaluru; Editing by Amrutha Gayathri)