Feb. 14 (Bloomberg) -- Rank Group Plc, the second-largest U.K. casino company, will close nine of its Mecca Bingo outlets before English and Welsh smoking bans take effect this year.

The clubs, in locations including the English cities of London, Sheffield and Liverpool, employ 230 people in all, Rank said today in a statement. The closings probably won't have a ``material'' effect on this year's profit, the company said.

About half of bingo contestants smoke, twice the rate of the overall U.K. population, according to Rank, whose Grosvenor Casinos unit has 33 British properties. When the Maidenhead, England-based company updated investors on its business on Dec. 7, it said a Scottish smoking ban introduced in March had cut sales at Mecca clubs there by 15 percent.

``The announced closures could be positive for Rank's future profitability,'' analysts at Credit Suisse in London including Craig Fraser said in a research note. The bank gives Rank shares an ``outperform'' recommendation.

Wales will start to apply restrictions on smoking on April 2, followed by England on July 1.

Shares of Rank rose 3.5 pence, or 1.5 percent, to 238.25 pence in London. They lost almost a quarter of their value in 2006 as the company reported a 209.7 million-pound ($409 million) annual loss and said higher costs and tax changes were putting pressure on gaming earnings. Rank has a market value of 1.29 billion pounds.

Property Sales

``The decision to close is in line with the group's stated aim of improving the quality of its club portfolio in preparation for the introduction this year of smoking bans in England and Wales,'' Rank said in the statement.

The company said it plans to sell some of the sites that are being closed, generating cash to be invested in areas that may produce stronger growth. Rank didn't give more details about potential investments.

Rank said it will remain the U.K.'s second-biggest bingo-club operator after the closings, with 103 Mecca Bingo sites in England, Wales and Scotland. Gala Coral Group is the country's largest company in the industry, with about 175 clubs.

Rank, which also owns the Blue Square betting web site, has agreed to sell its Hard Rock restaurant, hotel and casino unit to the Seminole Tribe of Florida for $965 million to focus on its gaming businesses in Europe.

To contact the reporter on this story: Louisa Nesbitt in Dublin at lnesbitt@bloomberg.net

Last Updated: February 14, 2007 11:54 EST