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Rank Group digital revenue climb offsets stagnant venue performance

Rank Group digital revenue climb offsets stagnant venue performance

London LSE-listed gambling operator Rank Group Plc has this morning issued a short trading statement informing investors of its corporate performance for the 46-week period to 14 May.

Issuing its statement, Rank governance informs that group combined revenues remain flat gaining a 1% year-on-year increase.

On a channel basis, digital revenues grew by 13%, however group revenue performance has been stalled by its ‘venue’ performance which saw Grosvenor Casinos’ properties like-for-like revenue declined 1%, impacted by a lower gaming margin.

Furthermore, Mecca Bingo venues performance like-for-like revenue was down 2%, with lower customer visits partially offset by an increased spend per visit.

Rank governance issued no comment on the trading update. The company will publish its preliminary results on 17 August.

Reacting to the corporate update, Victoria Pease, Analyst at Edison Investment Research, issued the following note on Rank Group performance

 “Earlier platform issues have been resolved and we expect digital revenue growth to accelerate, with the H118 introduction of a single wallet fuelling market share gains. The core business is highly cash generative, enabling progressive dividends, as well as potential M&A. Despite this, the stock trades at a calendar 2017e 6.5x EV/EBITDA, a 30% discount to peers. Our estimates are unchanged.”