Rank Group records £42m interim loss as Covid drains venue performance

Rank Group Plc has reaffirmed its confidence in being able to navigate the continued challenges that the COVID-19 pandemic has placed on its business.

Publishing its H1 2020/2021 interim results for the six months ending 31 December 2020, Rank has recorded underlying group-wide losses of £42 million – representing a 171% swing on 2019/2020 profits of £59 million. 

As previously reported, the LSE gambling group has continued to suffer from the closure and restricted openings of its Grosvenor Casino and Mecca Bingo venues across the UK. 

With venues being closed for ‘56% of its operating days’, Rank reported a 58% drop in group revenues to £157 million, down from £371 million in the corresponding period last year.

As a result of interrupted trading, Rank recorded a 70% drop in NGR to £90 million, down from £306 million in H1 2019/20, as its ‘heavily restricted’ Grosvenor and Mecca units delivered operating losses of £21 million (-143%)  and £5.2 million (-137%) respectively. 

“There is no doubt that the impact of the COVID-19 pandemic has been far beyond anything we or any other leisure operator could have imagined or planned for,” said John O’Reilly, Chief Executive of Rank Group Plc.

“The ever-changing restrictions coupled with curfews, which in particular have a seismic impact on our Grosvenor venues, have resulted in an exceptionally challenging first half for the Group.” 

But despite recording a 10% growth in active customers across its UK digital portfolio, Rank detailed a challenging period for its interactive division as it continues to adjust to additional UK compliance demands.

Integrating the assets of Stride Gaming, Rank interactive declared a 1% increase in like-for-like revenues to £66 million.  

Rank noted that increased compliance demands and ‘restricted deposits’ had impacted the performance of its Grosvenor interactive brand.

As a result of increased UK compliance duties, Rank Interactive’s operating profits declined by 8% from £10.5 million in H1 2019/20 to £9.7 million.

O’Reilly continued: “We have taken a stringent approach in applying affordability restrictions, particularly on higher staking customers, which has impacted revenues in our UK facing digital business in the half. 

“We have been making good progress in the development of our proprietary technology platform to prepare the digital business for its exciting future.” 

Updating investors, Rank maintains confidence in navigating further 2021 headwinds as the firm’s balance sheet has been strengthened by a £70 million equity placement.

Rank’s board reiterated that the company has maintained available cash facilities of £128 million, thereby meeting its anticipated ‘£50m liquidity test’ to further imminent challenges.   

“There continues to be uncertainty looking ahead, particularly as our venues remain closed and we have no firm guidance as to when we will be able to reopen,” O’Reilly said, closing Rank’s trading statement.

“We remain focused on managing our liquidity position and, following the successful £70m equity placing in November 2020, combined with the support of our lending banks, I believe we have the balance sheet strength to survive an extended period of closure. 

“We are now focusing on delivering the next stage of our Transformation plan and are ready to reopen our venues when the virus is under control and the vaccine roll-out has achieved its purpose.”

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