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Melanie Porter January 26, 2023 3 min read
Rank Group Publishes Interim H1 Results, Warns of High Costs Pressure
Rank Group released its latest interim results for the six months that ended on December 31, 2022, outlining the impact of high costs and slow recovery
In December 2022, UK’s leading gambling company released a trading update that presented a performance overview of the five months that ended on November 30. The update also spoke about the company’s recovery which had been slowed down in the context of the shrinking UK market.
Now, the company has published its interim results for the six months that ended on December 31, 2022. The report emphasized the continuously growing cost of living, energy costs, high demand for energy, high inflation, and slow return of foreign visitors during the first half of 2022.
“Slower than Anticipated” Post-Pandemic Recovery for Grosvenor and Mecca
Combined, all the previously enumerated factors are expected to continue to put a great deal of pressure on retail customers in the UK.
For the group that describes itself as a “unique blend of experiences, branded venues, and digital channels” for the Spanish and British markets, the upcoming months of 2023 are expected to be challenging as well.
The group’s chief executive John O’Reilly further explained that the recovery that the company had anticipated from the “severe impact of the pandemic” on their venues located in the UK, Grosvenor Casinos and Mecca Bingo, had been a lot slower than they had originally anticipated.
The operator of the two gaming businesses explained that while it recorded good numbers during Christmas, New Year and the first three weeks of 2023, the cost-of-living pressures and the stricter regulatory environment are expected to bring an even more challenging time.
Plus, the group chose to remain cautious regarding its H2 results in the context of the said macroeconomic situation, in spite of the good results recorded by their Grosvenor venues.
In spite of the fact that the group had already expressed its intention to lower its costs last December, O’Reilly spoke about the way trading can improve when more is invested “in the quality of our products and properties”.
He also spoke about the importance of investing more in the introduction of innovative gaming mechanics and concepts, shrinking the level of intrusion when managing risks associated with customers, and bringing back lapsed customers to their engaging gaming experiences.
Slower-than-Expected Return of Visitors to London
The slow rate at which visitors returned to London after the pandemic and the ongoing tightening of affordability restrictions on high-end customers caused Grosvenor venues to only contribute £153.4 million ($189.7 million) to the total revenue, marking a 4.8% drop compared to last year’s numbers.
Overall, Rank Group’s revenue during H1 2022-23 reached £338.9 million ($420.3 million), signaling a 1.6% year-on-year increase.
Mecca Bingo revenue went up 4.1% on a year-on-year basis, reaching £65.5 million ($81 million) while customer visits went up 4% up in spite of the decline in visits from older players.
Revenue from the group’s Spanish Enracha venues increased by 25.5% to £17.7 million ($21.9 million) helped by the country’s retail sector that continued its strong post-pandemic recovery.
At the same time, customer visits went up 16% on a year-on-year basis, while still marking a 14% drop compared to pre-pandemic numbers.
Industry September 26, 2023