Rank Group Plc has issued a profit warning, alerting investors of weaker-than-anticipated results impacting its Grosvenor casino venues.
Providing an update on its trading performance for the five months to 30 November, the LSE gambling group reported that a decline in Grosvenor performance had wiped out group growth.
“Whilst there has been some improvement in Grosvenor’s trading over the last few weeks, trading in Q2 has been weaker than expected, with weekly average NGR of £5.8m being only marginally ahead of the levels seen in Q1,” read Rank’s trading statement.
The group went on to note that a ‘lower customer spend per visit’ slowed the performance of Grosvenor, which had previously anticipated a continued recovery throughout Q2 and into the second half of the year.
While stating that it had a ‘robust plan’ to recover Grosvenor’s performance, Rank warned that a “return to growth will take longer than previously expected due to the current challenging macroeconomic backdrop”.
Meanwhile, despite reporting stable results, Mecca Bingo properties were said to be at a “level of downside risk” on year results. This, said Rank, was due to a recent weakening in performance accounting for lower customer visits “impacted by the Winter World Cup and colder weather”.
The downturn sees Rank revise its like-for-like underlying operating profit to stand in the range of £10m to £20m for the year ended 30 June – compared to FY 2021/22 profits of £40m.
Corporate costs were maintained at approximately £50m, driven by wage and energy inflation, alongside other price increases and COVID 19-related Government support received in FY22.
Group CEO John O’Reilly said: “Whilst we expect these challenges to continue to impact our recovery into the second half of the financial year, we have implemented a series of measures to deliver incremental cost savings and drive revenues.
“We remain committed to our roadmap of investing in initiatives that will ensure the long-term recovery and prosperity of the group. These include delivering new products in our UK venues, enhancements to the design and facilities of some of our casinos and upgrades to the table gaming and electronic offering.
“Our digital team is now fully focused on delivering the improvements available to our UK and Spanish business following the successful migration of all our brands onto our proprietary platforms.”