Rank Group Plc has declared that its business remains stable, despite recording statutory losses of £101m due to post-pandemic headwinds impacting its UK venues.
Publishing its Interim 2022 results (six months to 31 December), Rank achieved group underlying net gaming revenues (NGR) of £337m, up 2% on like-for-like 2021 results of £330.5m.
Interim trading saw Rank Digital generate a 9% increase in NGR to £101m. However, online growth did not offset performance drags and impairment charges impating the performance of Rank Venues.
Strong Christmas trading helped Rank Venues generate an NGR of £237m, which nearly matched a corresponding interim 2021 NGR of £238m.
Grosvenor Casino customer visit volumes grew 5% on the prior year, and active customers increased by 4%. However, its casino performance was hampered by a recorded 9% decline in like-for-like customer spending.
Rank attributed Grosvenor’s performance drags to the “impact of affordability restrictions and the cost-of-living crisis”.
Venue performance was further hindered by a ‘slower-than-anticipated’ recovery of Mecca Bingo venues across the UK. Despite registering a 4% increase in customer visits, Mecca’s NGR performance remains 20% behind interim 2019/2020 results – a period unaffected by pandemic impacts.
The slow recovery sees Rank monitor the unit as “Mecca venues estate profitability continues to be actively managed, with the planned closure of eight venues in H2 2022/23.”
Trading difficulties across venues saw Rank declare an 83% drop in underlying operating profits to £4.2m (H1 2021: £z5m) – as bottom-line results reflected the impact of “£15m of incremental energy costs and wage inflation in H1”.
Group CEO John O’Reilly commented: “The recovery from the severe impact of the pandemic on our UK venues businesses, Grosvenor and Mecca, has certainly been slower than we anticipated.
“Since lockdown we have faced a huge increase in energy costs, high wage inflation, the slow return of overseas visitors to London and the increasing pressure on consumer’s discretionary income.
“We have also experienced a continued tightening of the regulatory environment, particularly in regards to affordability restrictions on customers. Trading is improving as we invest in the quality of our products and properties, introduce new gaming concepts for our customers, reduce the level of intrusion in managing customer risk and reintroduce lapsed customers to the fun and excitement of our gaming experience.”
Closing its interim accounts, Rank booked impairment charges of £95m to help offset soft trading across UK venues and reflecting a further £7.3m of venues closure expenses.
As a result of booked impairment charges, Rank declared an interim statutory group operating loss of £101m.
Rank will continue to invest in its group-wide transformation programme and revenue-effective projects, in which leadership underlined that the “balance sheet remains strong with £148.4m of cash and available facilities”.
O’Reilly concluded, “We are now in control of our future from a technology standpoint and have the vision and capability to deliver a market-leading cross-channel customer experience in both Grosvenor and Mecca alongside strong and growing support brands in the UK and internationally.”
“We are driving efficiencies across our business whilst always ensuring that we are well placed in terms of the quality of our customer offering and the talent within the Group for the challenges and opportunities that lie ahead.
“We continue to look forward to the publication of the UK Government’s gambling review white paper. Casino and bingo venues are in need of long overdue modernisation of outdated regulation which heavily restricts the customer proposition. This appears to be widely recognised within the debate surrounding the Government’s review and we are hopeful of a positive policy outcome followed by the much-needed rapid implementation of new regulation.”