Rank Group has voiced optimism at witnessing a heightened performance through the coming 12 month period, despite swinging to a pre-tax loss during the year ending June 30, 2023.
The Grosvenor and Mecca owner has also echoed previous calls Director of Public Affairs David Williams, who noted that “timing is key and, for casinos, progress cannot come a moment too soon” when addressing the implementation of white paper reforms earlier in the month.
In a CEO address during its latest breakdown, John O’Reilly noted that the company is prepared to press ahead with modernisation plans to better meet the needs of its customer base.
“The UK government’s white paper on gambling reform sets out a number of important public policies which will enable the land-based bingo and casino sectors to modernise the customer proposition to better meet the needs of today’s consumers,” he commented.
“The delivery of the secondary legislation to enable these reforms cannot come soon enough and we are well advanced with plans to maximise these opportunities.”
During the aforementioned time frame, Rank reports a pre-tax loss of £122.7m, compared to a profit of £73m one year earlier, due to a £188.9m impairment charge as a result of a lower than expected performance, as well as £7.7m in closure costs relating to 17 of its venues. Revenue was up six per cent to £681.9m (2022: £644m).
“…energy costs have stabilised, inflation appears to now be easing, customers continue to slowly return to both our Grosvenor and our Mecca venues”
On a like-for-like basis, operating profit is highlighted as dropping 52 per cent to £20.3m (2022: £42.5m), which is predominantly aligned to underlying cost inflation. These increases were driven by heightened employment and energy costs, which increased £15.9m and £5.4m, respectively.
LFL revenue is up seven per cent to £679.7m (2022: £633.2m), with the group’s retail estate leading the way via a six per cent uptick to £476.9m (2022: £449.4m).
Grosvenor grew four per cent during the year, recovering from a five per cent H1 decline to record an increase of 15 per cent through the remaining six months.
Mecca tracked a seven per cent increase, which Rank put down to a continuing “slow recovery from the impact of the pandemic”. It was also noted that the closure of 15 venues ensured that the estate is now “more profitable and sustainable”.
The Spanish Enracha business is reported as having “delivered very strong LFL NRG growth” of 19 per cent, with customer visits up 16 per cent year-on-year.
“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,” O’Reilly commented.
“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.
“However, energy costs have stabilised, inflation appears to now be easing, customers continue to slowly return to both our Grosvenor and our Mecca venues and we now expect to deliver good levels of revenue and profit growth.”
“…we expect to see good levels of revenue increase year-on-year and to grow our profitability”
Digital NGR grew 10 per cent, which the company said is a result of the successful completion of the migration of Rank brands onto its proprietary technology platform, and subsequent transfer of d resources to the delivery of enhancements to customer journeys, services and products.
“Our digital business is performing strongly, and we have a strong pipeline of customer-facing developments in both our UK and Spanish brands to drive revenue and profit growth,” it was added.
“We are very focused on delivering a market leading cross-channel experience for our Grosvenor and Mecca customers with several key developments landing during this new financial year.”
The current financial year is said to have “started strongly”, with group NGR up 16 per cent YoY. Grosvenor and Mecca are 17 per cent ahead, Enracha is up 12 per cent YoY and the company’s digital division is 13 per cent up during the opening six weeks of the reporting period.
“Despite the generally challenging trading conditions, with inflation still running high and the increase in interest rates impacting consumer discretionary expenditure, we expect to see good levels of revenue increase year-on-year and to grow our profitability in 2023/24,” Rank noted.
