There May Be Trouble Ahead But Rank Group Bangs a Confident Gong
The Rank Group’s latest Trading Update is a warning gong of further fiscal turbulence ahead as bricks-and-mortar heavyweights wrestle to manage the double blowback of Covid-19 pandemic impacts and growing consumer uncertainty.
In a like-for-like showing—comparing the Omni-channel’s latest quarter with its nearest equivalent pre-Covid quarter—net gaming revenue (NGR) from the group’s Grosvenor Casino venues fell 14 per cent, while NGR from its Mecca Bingo vertical dropped by 25 per cent.
Embracing full clarity and transparency, Rank’s update compared projections for its latest quarter (Q3 of its current FY21/22, ending this March 31), with its last non-Covid 19 effected third quarter, posted in 2019.
NGR across the storied business in Q3 totalled £156.4 million (US$199m/€185.5m), comprising £111.2 million (US$141.5m/€131.9m) in retail revenue and £45.2 million (US$57.5m/€53.6m) in iGaming.
Grosvenor Casinos generated £69.1 million (US$87.9m/€81.9m) and Mecca Bingo netted £34.1 million (US$43.4m/€40.4m) in the latest quarter.
Because all of Rank’s UK venues were shuttered during the pandemic lockdown of the first three months of 2021—the equivalent of the company’s Q3 in FY20/21—it was unrealistic and misleading to post a year-on-year Trading Update, the Group has rightly conceded.
And given poor current international economic performance, as nations struggle to emerge from the drag of the pandemic and political uncertainty, retail heavy Rank has lowered its EBIT forecast for its current financial year, ending June 30, from £65 million (US$82.7m/€77.1m) to £55 million (US$70m/€65.2m) tops.
“The performance of our venues softened in March and this has continued into the first few weeks of Q4, impacting our current expectations for our full year performance,” advised Rank CEO John O’Reilly.
“[But], while the recovery is taking time, we believe that in the medium term there remains a strong path to recovery to the pre-Covid-19 levels,” he predicted.
Nevertheless, there was also a disappointing reveal of lacklustre digital performance across the Rank Group.
Overall there was a one per cent decline in UK iGaming revenue, with Grosvenor digital growth of three per cent failing to offset an 11 per cent drop in Mecca Internet revenue — caused in great part, claimed the company, by the disruption of transitioning to its own proprietary RIDE platform.
Added O’Reilly: “We recognise the pressures on UK consumers.
“But we are confident that the improvements we are continuing to make [for] customers, and the investments in our venues, alongside the gradually reducing impact of the pandemic and return of overseas customers, position us well for the year ahead.”