“Putting Lipstick On A Pig”, British Betting Beauty Rank Group Posts “Impaired” FY Results

Citing that favourite accounting disclaimer of “impairment”, Britain’s iconic Rank Group has posted preliminary Full Year results, for the year ending June 30, which can be described as nothing short of disappointing — whatever spin is applied.

While more agile rivals have overcome the post-Covid challenges of peak energy costs, wage inflation and evolving regulatory impact, Rank, owners of the storied Grosvenor Casino and Mecca Bingo brands, has resorted to something approaching self-pity to explain its underwhelming performance.

Even though the group received £27.1 million (US$34.6m) in tax benefits, Rank’s year-on-year operating profit fell by over 52 percent to £20.3 million (US$25.91m) on revenues of £679 million (US$866.92m), up seven percent on Full Year 2021-2022.

Nevertheless, on paper at least, Rank Retail venues posted a year-on-year six percent growth in Net Gaming Revenues (NGR) of £476 million (US$608.04m), while Rank Digital NGR grew 10 percent to £202 million (US$257.9m).

But operating profit at the Grosvenor and Mecca brands plunged by 27 percent to £40.9 million (US$52.21m).

“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,” mitigated Rank CEO John O’Reilly.

“[But] 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,” he observed.

Rank has declared a statutory operating loss of £109 million (US$139.16m) due to “impairment charges” of £118 million (US$150.65m), relating to restructuring costs across its retail estate.

Ticket to Ride

Despite the negatives, optimism continues to brighten the company’s digital horizon.

Thanks to its new RIDE platform, Rank’s online vertical can look forward to continued growth, affirmed O’Reilly.

“Our Digital business is performing strongly, and we have a strong pipeline of customer-facing developments in both our UK and Spanish brands [Enracha] to drive revenue and profit growth,” said the Rank boss.

Although the Enracha chain of venues in Spain posted just over five percent of group revenue, £36.4 million (US$46.47m), it was the company’s fastest-growing vertical, with near-19 percent year-on-year growth – despite the aforementioned increased costs of salaries and energy blamed for the UK’s sluggish performance.

For Rank, the gain in Spain has certainly generated a lot less pain. No “impairment” costs here.

Meantime, shares in the LSE-listed company were down 1.45 percent at this time of publication.

It’s doubtful they’ll be moving in the opposite direction anytime soon.