Rank Group boosts digital division to counter ‘Tough’ venue conditions

Henry Birch

Tough retail conditions have impacted the H1 2017 performance of London-listed gambling operator The Rank Group Plc. The company has detailed a ‘challenging period’ in which its Grosvenor and Mecca venues have faced multiple increased costs.

Updating the market, Rank would maintain group revenues of £754 million (1% increase), with the firm’s venue division generating like-for-like revenues of £642 million (1% decrease).

However, facing a ‘tough retail environment’ across its venue properties, Rank would declare a statutory a 7% profit decline to £79 million (2016: £85.5 million). In its division KPIs, Rank would record profits declines for combined Grosvenor and Mecca venues to £88 million (2016: £97.4 million).

Updating investors, Rank governance has detailed that it has implemented a comprehensive strategy to lower its venue cost base focusing on its remuneration structure, cutting management roles at club level and simplifying its venue operations to create a ‘stronger cost efficiency’.

Despite its venue downturn, Rank governance is upbeat that its fast-growth digital division’s performance will offset corporate declines. Rank would declare UK digital revenue up 15% to £111 million, combined with a 63% profit increase to £22 million.

Pleased with its digital gains, Rank governance stated that it would increase its marketing spend for its digital assets, pointing to the recently secured shirt sponsorship of Fulham FC. The operator will now further expand its digital product portfolio, by launching its much anticipated full-service sportsbook in the coming months.

Henry Birch, Chief Executive of The Rank Group Plc commented on H1 2017 corporate performance

“After a challenging first half of our financial year, we are very pleased with our second half performance, especially with our digital business which delivered 63% growth in operating profit for the year. We are excited about the roll-out of our new Luda bingo concept following the opening of the first venue on 7 August 2017. Additionally, the Group has put in place a number of digital, product and venue-based initiatives launching in the current financial year which we expect to drive top line revenues. The new financial year has started well and the Board looks to the future with confidence.”