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Rank clears path to profit recovery following positive Q3 trading

Rank Group Plc trades with confidence as both its venue and digital business segments maintain revenue and Key Performance Indicator (KPI) growth.

This morning the London Stock Exchange (LSE) gambling group published its Q3 2023/2024 trading statement (period ending 31 March), informing investors that year-to-date net gaming revenues (NGR) stand at £555m, up 8% on 2022/2023 comparatives of £512m.

Headline growth is maintained following positive Q3 results against seasonal factors impacting its venue performance, as Rank registers a 6% increase in Q3 NGR to £182m (2022/2023: £174m).

As reported, “Grosvenor venues‘ like-for-like NGR grew by 3% to £80m with a 5% growth in visit numbers. With this being the seasonally quieter period, average weekly NGR in the quarter was £6.2m, up 2% on the prior year and down 2% on Q2.”

Mecca venues’ Q3 NGR grew by 12% to £37m, driven by a “5% increase in customer visits and a 7% increase in spend per visit, particularly benefiting from strong trading over the Mother’s Day and Easter weekends.”

Improved venue trading sees both Grosvenor and Mecca maintain year-to-date (YTD) revenue growth of £247m (+8%) and £104m (+10%), respectively.

Period trading saw Rank Digital’s NGR growth of 6% to £55m, as the unit’s YTD revenues stand at £163m, up 8% on 2022/2023 results of £154m.

Digital growth was secured by a strong Mecca performance with NGR up 21%. However, Grosvenor’s growth was more modest at 1%, impacted by a weaker gaming margin with some significant customer wins.

The performance of Rank’s wider portfolio of digital brands in the UK experienced “a 13% reduction in NGR, with improvements in the return on investment delivered in March and continuing into Q4.”

Rank maintains a positive view of its Digital performance, as Mecca and Grosvenor brands are supported by a new content management system and the continued growth of its Yo brands in Spain.

Markets were informed that Rank has entered an agreement to sell its holding in Passion Gaming, an Indian online rummy business, for a nominal consideration, with a sale expected to complete in the coming weeks.

Rank details a confident outlook to year-end trading as “performance has continued to improve in April, and we expect like-for-like (LFL) operating profit for the year ending 30 June 2024 to be in line with the Group’s expectations.”

As such, full-year 2023/2024 results will address the LSE gambling group’s comparative losses of £109m as the 2022/2023 fiscal year included impairment charges of £118m due to the closure of venues, inflated energy costs, and operational restructuring.

Concluding Q3 trading, Group CEO John O’Reilly said, “We continue to make good progress across both our venues and online businesses, with Q3 trading very much in line with the Board’s expectations. Performance continues to improve, and we have the very important land-based reforms from the Government’s White Paper to look forward to, which we hope to start implementing in the coming months.”

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