Rank Group Plc has achieved its 2022/2023 corporate targets, overcoming the challenges of a financial year featuring peak energy costs, wage inflation and regulatory changes impacting its business.
Publishing its preliminary 2022/2023 results (12 months ending 30 June), Rank Group declared an underlying operating profit for full-year trading of £20.3m.
The bottom-line result is lower than the prior 2021/2022 financial year profits of £42.5m, but remains in-line with Rank upgraded guidance issued in April 2023.
Of significance, Rank underlined a much-improved H2 trading performance, in which its business accumulated a like-for-like underlying operating profit of £16.1m.
Headline results saw the LSE gambling group achieve group revenues of £679m, up 7% prior year comparatives of £633m.
A breakdown of revenue performance saw Rank Venues achieve a 6% growth in net gaming revenues (NGR) to £476m, whilst Rank Digital grew its full-year NGR by 10% to £202m.
Year-to-date trading saw Grosvenor Casino venues report a 4% growth in NGR to £306m, whilst Mecca Bingo venues experienced a 7% increase to £134m.
However, as forewarned – “underlying venues operating profit of £40.9m was down 27%, or £14.8m, on the prior year, reflecting significant cost increases, notably employment up £15.9m and energy up £5.4m.”
John O’Reilly, Chief Executive of Rank Group Plc, said: “The return of customers to our Grosvenor and Mecca venues continues to pick up and our second half numbers give cause for optimism after a very challenging couple of years.
“Our UK venues have faced a surge in energy costs, high wage inflation, a tightening in the regulatory environment, the slow return of overseas visitors to London’s casinos and the more general pressures on the consumer’s discretionary expenditure.
“However, energy costs have stabilised, inflation appears to now be easing, customers continue to slowly return to both our Grosvenor and our Mecca venues and we now expect to deliver good levels of revenue and profit growth.”
Despite reporting underlying profits of £20.3m in 2023/24, Rank declared a statutory operating loss of £109m due to impairment charges totalling £118m – with costs primarily related to the restructuring of its Mecca, Grosvenor and EnRacha (Spain) properties.
Rank is optimistic of a return to profitability in 2023/24 and anticipates resuming dividend payments in the foreseeable future. The new financial year has seen “robust growth, with a 16% rise in LFL NGR, notable performance from Grosvenor venues outside London, and a 13% increase in Digital NGR”.
Furthermore, investors were notified that the “Mecca estate is now more profitable and sustainable following the closure of 15 Mecca clubs in the year, taking the Mecca estate to 56 venues.”
John O’Reilly cited confidence in improved 2023/2024 conditions for its business, noting positive inbound UK gambling regulatory changes for casino venues and continued Rank Digital gains from the company’s new RIDE platform.
“Our Digital business is performing strongly, and we have a strong pipeline of customer-facing developments in both our UK and Spanish brands to drive revenue and profit growth.
The UK Government’s white paper on gambling reform sets out a number of important public policies which will enable the land-based bingo and casino sectors to modernise the customer proposition to better meet the needs of today’s consumers.
The delivery of the secondary legislation to enable these reforms cannot come soon enough and we are well advanced with plans to maximise these opportunities.”