The Rank Group Plc, the largest casino and bingo operator by venue in Great Britain, has provided a trading performance overview from July through November 2022. Rank has also updated its profit expectations for the first half of the year 2023.
Modest NGR increase:
The overview shows that the Group‘s net generated revenue (NGR) has increased by 1% over the subject period compared to the same period in 2021. The major contributors to the increase were the Group’s Mecca and Enracha venues but the decline in revenues of Grosvenor venues offset their performance. Grosvenor’s trading performance has been weaker than expected in Q2 as its weekly average NGR of £5.8 million ($7.1 million), though slightly above the Q1 level, still has not improved throughout Q2.
But the lower customer spend per visit continued to pin revenues at reportedly low levels.
Q2 levels:
Opposite to Grosvenor, Mecca venues have hosted 4% more customers for the five-month period than last year. Their Q2 weekly average NGR has also been in line with Q1. No significant revenue increase has been seen due to fewer visitors impacted by the World Cup and the ongoing pressure on living costs. Enracha venues have maintained strong performance as their net generated revenue has seen a 27% increase year-on-year. The growth has been broadly due to investments in electronic products that kept delivering strong returns.
Overall performance:
Overall, Rank Group’s Digital business continued to grow from July through November by 11%. The UK operations have grown by 10% after Grosvenor was transformed into a proprietary technology platform. Likewise, Rank International’s revenue increase of 13% has been driven by the continued growth of the YoBingo platform and is additionally supported by the launch of YoSports in October 2022.
2023 outlook:
The company has built a plan to improve the performance of Grosvenor venues expecting their longer-than-expected recovery shadowed by the current macro-economic challenges. Also, the year-to-date performance of Mecca venues creates a downside risk in 2023. Enracha venues are expected to continue their robust performance as Spanish customers are less affected by living cost pressures. Rank Digital business continues to focus on delivering a richer live casino gaming experience and a customized online bingo offer.
2022 operating costs and profit:
Total cost increases are settled at £50 million ($60.9 million). Though in line with expectations, these have been driven by inflation, price increases, and COVID-19-related Government support. The Group expects that its profit from sales operations for the year ending 30 June 2023 will be in the range of £10 million to £20 million ($ 12 to $ 24 million) with Grosvenor venues’ performance being the main concern for the Group’s operating profit for the year.
Tough trading environment:
John O’Reilly, Chief Executive, said: “Weak consumer confidence and pressure on disposable income is resulting in a tougher than expected trading environment for our UK venues businesses, particularly in Grosvenor where we are seeing customers spending less per visit.” While the company expects these challenges to continue to impact its recovery, it implemented a series of measures to save costs and drive revenues. The executive added:
“We remain committed to our roadmap of investing in initiatives that will ensure the long-term recovery and the prosperity of the Group. These include delivering new products in our UK venues, enhancements to the design and facilities of some of our casinos, and upgrades to the table gaming and electronic offering. Our digital team is now fully focused on delivering the improvements available to our UK and Spanish business following the successful migration of all our brands onto our proprietary platforms.”