Rank Group, owner of Mecca bingo halls and Grosvenor casinos, cautioned that the smoking ban in Scotland, soon to be nationwide, was continuing to take its toll on profits.

It said that although it was “satisfied" with overall trading in the first eight weeks of the year, “trading in Scotland remains difficult with a slight increase in the level of revenue decline".

The group said revenues in Scotland had already fallen 15 per cent up to the end of December in the 40 weeks since the ban was introduced.

However, Grosvenor casinos and the online gambling business, Blue Square, had both been performing well since the start of the year.

In the year to the end of December, operating profits fell in line with expectations by £7 mllion to £44 million. Growth in casino profits was outweighed by falling bingo takings, as regular customers were put off by the smoking ban.

UK bingo hall profit fell by 19 per cent to £63 million.

But increasing the prize money, up 10 per cent in the year to more than £205 million in main stage prizes, helped to stem declining admissions and increased the Mecca halls’ market share.

Ian Burke, Rank's chief executive, said that he would consider bids for all the 17 new large UK casino licenses up for grabs from local authorities, including the supercasino planned for Manchester.

“We are looking quite hard at all 17. We think we can make a strong case to the local authorities if and when we need to.”

He said the smoking bans to come in England and Wales would have a similar impact on its bingo halls as the Scottish ban, but he added: “We are better prepared when it comes in Wales and England.”

Rank has already earmarked nine bingo halls for sale and is aiming to build sheltered enclosures for smokers outside all its remaining clubs in England and Wales. It also hopes to win a licence for outdoor bingo in these enclosures.

The shares recovered initial losses as traders focused on the strong performance of Blue Square.