SBC News Voice of the Sports Betting Industry
Rank Group Plc has returned statutory profits against continued ‘UK macro headwinds’ impacting the performance of its land-based gambling units.
Publishing its H1 2023/2024 interim results for the period ending 31 December, the LSE gambling group registered a 9% increase in corporate net gaming revenues (NGR) of £362m (H1 2022/23: £332m).
Citing strengthened all-round operating efficiencies, interim trading saw Rank achieve an underlying operating profit of £21.7m, up from £2.7m declared in H1 2022/23 and £17.5m in H2 2022/23.
Bottom line results saw the group declare a statutory operating profit of £16.2m, reversing losses of £103m posted in H1 2022/23 – a period which saw it book £95m in impairment losses to offset ‘soft trading’ of its UK venues.
Period trading saw Rank achieve revenue and profit growth across all business units, led by Grosvenor UK generating a 10% increase in NGR to £167m (H1 2022/23: £152m) and operating profits of £14m (+197%). Grosvenor visit volumes grew 8% on the same period last year, with customer spend per visit up by 2%.
Registering a 9% increase in NGR to £67m (H1 2022/23: £62m), Mecca venues broke even during the interim period, marking a recovery from the comparative losses of £4.8m.
Of significance, Rank’s UK venue performance withstood high wage inflation of 8% (£8.3m higher LFL employment cost in H1), which was largely offset by declining energy prices (£5.4m LFL saving on the prior period).
Group CEO John O’Reilly commented: “After what has been a very challenging few years for Rank due to a wide range of external macro factors, we are starting to build revenues and, with our strong operational leverage, we are improving our profitability, with the Group delivering revenue and operating profit growth across all businesses.”
Aiding its retail recovery, Rank Digital posted an 8% increase in NGR to £108m, as the unit’s improved efficiencies registered a doubling in operating income to £10m. Rank detailed its expectations of further margin improvements despite upcoming regulatory changes for its Digital unit.
In January 2024, the group secured new financing agreements totaling £120m, consisting of a £30m term loan that is due in October 2026 and a £90m revolving credit facility that will be available until January 2027.
The LSE group informed markets that venues and digital businesses experienced a busy trading period through the Christmas and New Year holiday season, with trading normalizing throughout the rest of January.
Rank’s outlook is buoyed by strong three-year revenue growth, and cost-efficiency initiatives are in place to drive the continued transformation of the Group.
John O’Reilly concluded: “We are making good progress with our robust pipeline of development initiatives in both our UK and Spanish digital brands to accelerate revenue and profit growth. While we expect UK digital growth to be offset in the short term by the impact of new maximum online slot stakes and the impact of the statutory levy in the UK, we are confident in the opportunities of delivering a market-leading cross-channel experience for our Grosvenor and Mecca customers.
“I would like to express my considerable thanks to my colleagues across the Group who continue to excite, entertain and protect our customers, provide support to their local communities and contribute significantly to the progress we are making in the transformation of the Group.”
