- Rank Group Sees Optimism Amidst Revenue Growth
- Recovery in Grosvenor and Mecca Venues Boosts Profits
- Challenges and Investment Plans Amidst Changing Gambling Landscape
Rank Group is emerging with ‘optimism’ after a ‘challenging couple of years, as the proprietor of Mecca Bingo experienced an increase in demand and a decline in cost inflation in the first half.
The gambling company, which also operates the Grosvenor casino, saw revenues increase by 6 percent year-over-year to £681 million by 30 June.
Like-for-like operating profit for the second half of the year increased to £16.1million from £4.2million in the first half, but overall operating earnings for the year decreased by 52% to £20.3million.
According to Rank, the decline in profits was “primarily attributable to underlying cost inflation,” specifically “increases in energy and employment costs and the absence of government furlough payments and other pandemic-related support.”
In the second half of the year, however, both Grosvenor and Mecca venues in the United Kingdom experienced accelerated revenue recovery and improved profit conversion as energy costs began to decline.
Similar-to-last-year revenue growth at Grosvenor and Mecca’s venues was 4% and 7%, respectively, for the entire year.
The gambling company also said its ‘strong’ balance sheet enabled ‘continued investment in both the digital and venues businesses’ which places the business in a strong position to deliver ‘future growth.
This, according to Rank, is due to the UK government’s review of gambling legislation, which will “deliver significant reforms for land-based bingo and casino venues.
Rank was also hit with £118.9 million in impairment charges, which it attributed to “lower than expected performance in the year,” as well as £7.7 million in closure costs for 16 venues that were closed during the year.
The current price of Rank Group shares in early morning trading is 89.40p.
John O’Reilly, chief executive officer of Rank Group, stated, “The return of customers to our Grosvenor and Mecca venues continues to improve, and our second-half numbers provide optimism after a very difficult couple of years.”
During that period, our UK venues have faced an increase in energy costs, high wage inflation, a tightening of the regulatory environment, the slow return of international visitors to London’s casinos, and the general pressures on discretionary spending by consumers.
‘However, energy costs have stabilized, inflation appears to be moderating, and customers continue to steadily return to both our Grosvenor and Mecca venues, so we now anticipate strong revenue and profit growth.’
