Rank Group sees profits drop to a loss of £109.8m for fiscal year 2023

Lea Hogg 9 months ago
Rank Group sees profits drop to a loss of £109.8m for fiscal year 2023

Rank Group, operator of Grosvenor Casino and Mecca Bingo, has published its financial results for the 12-month period ending 30 June 2023. The group’s net gaming revenue (NGR) reached £679.7 million for the year, marking a 7.3 percent rise compared to the previous year.

(Source: SiGMA)

Breaking down the figures, £476.8 million or 70.1 percent of the total revenue originated from the operator’s brick-and-mortar establishments, experiencing a 6.1 percent year-on-year expansion across the portfolio. Simultaneously, digital revenue amounted to £202.9 million, constituting 29.9 percent of the overall group revenue and displaying a 10.4 percent year-on-year growth.

Distribution by brand revenue gains were observed across all of Rank’s digital brands in both the UK and Spain. The Grosvenor Casino chain maintained its position as the most lucrative business segment, contributing 45.1 percent of the group revenue, equivalent to £306.3 million—an increase of 4.2 percent year-on-year.

The Digital division followed closely with revenue of £202.9 million, experiencing a notable 10 percent growth. Specific insights into the expansion of each digital brand were not disclosed by Rank.

Source: SiGMA

Mecca Bingo locations generated an additional 19.7 percent of the total revenue, totaling £134.1 million—a 7.5 percent increase year-on-year. Meanwhile, the Enracha venues in Spain, while contributing just 5.4 percent of group revenue (£36.4 million), stood out as the swiftest growing segment for Rank, with an impressive 18.6 percent year-on-year revenue upsurge.

“The return of customers to our Grosvenor and Mecca venues continues to pick up and our second half numbers give cause for optimism after a very challenging couple of years,” said John O’Reilly, chief executive of The Rank Group (pictured above).

“During that time, our UK venues have faced a surge in energy costs, high wage inflation, a tightening in the regulatory environment, the slow return of overseas visitors to London’s casinos and the more general pressures on the consumer’s discretionary expenditure.

Profit Downturn

In contrast to the revenue escalations in various sectors, Rank’s underlying like-for-like operating profit underwent a substantial decline of 52.2 percent, settling at £20.3 million. This drop led to a year-on-year decrease in the company’s earnings per share, plummeting from 4p to 1.2p.

The dip in underlying operating profit was attributed to multiple heightened costs, encompassing employee salaries, energy, property expenses, Covid-19 support, IT expenditures, marketing, and inflation-linked increases in outlays.

While revenue climbed, the results fell below Rank’s expectations, as noted by CFO Richard Harris. In light of impairment charges amounting to £118.9 million during the year, among other outlays, Rank reported a group operating loss of £109.8 million and a pre-tax loss of £122.7 million.

Consequently, factoring in a tax benefit of £27.1 million, the group faced a loss after tax totaling £95.3 million, in contrast to the £64.9 million post-tax profit recorded in the previous year.

On the stock market, The Rank Group Plc (RNK.L) is currently trading at GBp 88.00 with a decrease of -1.57 percent.

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