Rank Group Plc maintains growth against tough macroeconomic headwinds impacting customer spending activity and the profitability of its UK gambling venues.
This morning the LSE gambling group published its Q1 2022/2023 trading statement, registering a 2% increase in net gaming revenues (NGR) to £166m.
Headline growth was maintained despite Rank’s flagship Grosvenor Casino unit’s continued performance decline, in which Q1 GGR slipped by 5% to £75m.
“Grosvenor venues saw visits grow in the quarter, however, with lower spend per visit, NGR fell by 5%,” said Rank on unit performance.
It added: “London performed strongly, with NGR up 21% driven by a 20% increase in customer visits. This was more than offset by a 17% NGR decline from our venues outside of London where customer spend levels were weaker.”
Period trading saw Mecca Bingo venues achieve a 2% increase in NGR to £33m, as results reflected a “4% increase in customer visits offsetting a 2% decline in spend per visit.”
Retail venue impacts were offset by the accelerated performance of the Rank Digital unit that achieved a 13% growth in NGR to £48m.
Digital growth was attributed to the successful performance of Rank Digital’s enlarged portfolio of online brands (Rank and Stride Gaming) which completed a successful migration onto the proprietary RIDE Platform at the start of September.
Group CEO John O’Reilly said: “It is pleasing to see increasing visits in this new financial year together with strong growth in the digital business, where we are starting to see the benefits of investments in our proprietary technology platform and our cross-channel offering, with encouraging growth in both the UK and Spain.”
The firm enters a new financial year with caution, citing awareness of “significant pressures” on consumer discretionary expenditure that will impact the performance of its retail units. It told investors: “We expect to see some continued impact of these external pressures on the business, particularly in the Grosvenor venues outside of London.”
Despite the government’s announcement of its ‘Energy Bill Relief Scheme’, Rank warned of significantly higher 2022/2023 operating bills, predicting energy costs in the current financial year to be circa £34m, up from £23m in FY2022.
In spite of changing macroeconomic headwinds, Rank will continue its group transformation projects to improve the omni-channel performance of gambling venues and online brands.
“Whilst it is a challenging trading environment and we expect this to continue in the months ahead, we remain committed to delivering Rank’s market-leading, exciting and entertaining proposition to our customers,” O’Reilly said.
He concluded: “Key initiatives are underway to improve long-term revenues. These include some key refurbishment projects and new electronic roulette and jackpot games in Grosvenor; improving the gaming machine offering in Mecca; increased personalisation and a stronger live casino offering in the UK digital business and the recent launch of Yo Sports in Spain.
“The group has the benefit of a strong balance sheet, enabling us to continue investing in the business through this period.”