Following what it described as a ‘tough first half’ to the year, Rank Group has reported that its operating profits have climbed by 20% as detailed in the group’s H2 2018/19 results (6-month period ending 30 June 2019).
While the operator explained that its full-year profits had taken a 22% hit since last year, dropping from £50.1m to £39m, Rank Group’s new ‘transformation programme’ appears to have cushioned the blow.
A tough start to 2018/2019 trading saw Rank’s Grosvenor Casino and Mecca Bingo properties impacted by severe UK weather conditions and customer footfall declines, leading to Rank governance sanctioning its transformation programme.
John O’Reilly, chief executive of The Rank Group, commented: “We are pleased with the Group’s second-half performance and the full-year results, especially given the challenges we faced in the first half of the year. The transformation programme is pivotal to our growth strategy both in the UK and internationally.
“We are excited by the important initiatives that are being implemented across each of our businesses. We have made a good start to the transformation of Rank and there remains a lot of improvement to be delivered. I would like to thank my colleagues across the Group for their enthusiasm and commitment in delivering improvements in the ways in which we are meeting the needs of our customers.”
Rank’s digital business is reported to have experienced a strong period of growth, with like-for-like H2 net gaming revenue (NGR) up 14% compared to the H1 growth of 7%.
Not including the contribution of the Rank-acquired YoBingo, Rank Group reported that its like-for-like NGR had grown by 11% over the year, following a number of improvements to its customer bonusing and offers from its Mecca and Grosvenor divisions.
Total digital revenue grew by 17% in the year due to the contribution from YoBingo, while digital like-for-like operating profit was down 3% in the year as improvements to revenue were offset by £0.8m of incremental Remote Gaming Duty (‘RGD’) on player bonuses and £1.9m of additional RGD following its increase to 21% (from 15%) from 1 April 2019.
During the period, Rank had confirmed that it has entered ‘advanced discussions’ to acquire London AIM-listed online gambling group Stride Gaming Plc.
The acquisition is hoped to significantly boost the online gaming presence of Rank, which will also see them absorb a number of the Stride UK bingo brands, including Kitty Bingo, Lucky Pants, Bingo Extra and Lucky VIP, Regal Wins and Spin&Win online casino properties.
O’Reilly added: “The acquisition of Stride, which we expect to complete in 2019/20, will help step-change our digital business, deliver strong synergies, bring proprietary technology in house and create one of the UK’s leading online gaming businesses.”
Rank also emphasised that it is buoyed by an “encouraging start to 2019/20,” and remains optimistic towards the coming months.