In the United Kingdom and prominent land-based and online gaming operator Rank Group has announced that it recorded an underlying net profit of £40.4 million ($47.6 million) for the twelve months to the end of June despite facing ‘challenging’ market conditions.
The London-listed firm behind 35 Grosvenor-branded casinos used an official Thursday filing (pdf) to state that the figure was ‘in line’ with the £40 million ($47.2 million) prediction it published in June and was considerably better than the £82.4 million ($97.3 million) deficit it chalked up for the previous twelve-month period. The firm also revealed that all of this came as its associated net gaming revenues improved by 98% year-on-year to £644 million ($760.7 million) to give it net cash of £19.1 million ($22.5 million).
Rank Group declared that it had been forced to reset its full-year operating profit guidance after its Grosvenor-branded chain of casinos were ‘adversely impacted by difficult trading conditions’ during the latter half of the reporting period. It moreover asserted that this woe was most pronounced at its nine London properties, which accounted for 38% of its aggregated annual net revenues, as a dearth in overseas visitors led to ‘very weak customer volumes’ that only started to improve ‘in the final few weeks of the year.’
Maidenhead-headquartered Rank Group noted that its venues were furthermore negatively hit by a rise of almost 77% in energy costs when compared with the pre-pandemic 2019 financial year to about £23 million ($27.1 million). The operator went on to proclaim that this figure for the upcoming twelve months is now expected to double to reach approximately £46 million ($54.3 million) ‘based on current market prices’ although it has a ‘strong cash position’ despite having spent £6.2 million ($7.3 million) on new casino products and £5.3 million ($6.2 million) on refurbishing its Grosvenor-branded estate.
Rank Group is additionally responsible for the Mecca Bingo-branded chain of bingo halls and contended that this estate is ‘being reshaped to return to profitability’ after seven of its venues were recently shuttered. The operator went on to state that this subordinate’s digital arm has been ‘successfully migrated to the Ride platform’ and helped its iGaming net revenues for the twelve months to the end of June swell by 4% year-on-year with a 178% boost in active cross-channel customers.
John O’Reilly serves as the Chief Executive Officer for Rank Group and he used the filing to decree that his company is continuing to take ‘actions to drive further efficiencies in the venues businesses’ and has recently seen ‘strong revenue growth’ from properties that have ‘benefitted from our accelerated capital investment program’. Regarding his firm’s digital businesses and the experienced executive stated that performance is continuing to improve ‘against a difficult market backdrop’ with the transfer to the proprietary Ride platform ‘supporting revenue growth and a strong improvement to operating margins.’
Read a statement from O’Reilly…
“It was a challenging year for our United Kingdom venues businesses with unexpectedly softer trading across the Grosvenor estate in the second half of the year. Whilst we have been seeing improvements in London in recent weeks, the trading environment across the United Kingdom is likely to remain difficult in the months ahead with inflationary pressures squeezing consumer discretionary expenditure and cost increases, particularly in energy prices, putting pressure on profit margins.”