Rank Group is emerging with ‘optimism’ after a ‘challenging couple of years’, as the Mecca Bingo owner enjoyed a bump in demand and easing cost inflation in the first half.
The gambling company, which also owns Grosvenor casino, saw revenues tick 6 per cent higher to £681.million year-to-year for the 12 months to 30 June.
Group profit in the second-half also saw an improvement with a like-for-like operating profit of £16.1million, compared with £4.2million in the first-half, but overall operating earnings for the year slumped 52 per cent to £20.3million.
Rank Group had reasons to be optimistic after it reported revenue growth following a ‘challenging couple of years’
Rank said the profit fall was ‘predominantly due to underlying cost inflation’, particularly with regard to ‘increases in energy and employment costs and the absence of government furlough payments and other pandemic related support’.
But both Grosvenor and Mecca venues in the UK saw accelerated revenue recovery in the second half of the year, with profit conversion improving as energy costs began to fall.
Grosvenor and Mecca’s venues like-for-like revenue growth for the year were up 4 per cent and 7 per cent respectively.
The gambling company also said its ‘strong’ balance sheet allowed ‘continued investment in both the digital and venues businesses’ which puts the business in a strong position to deliver ‘future growth’.
Rank said that this was down to the the UK government’s review of gambling legislation which the company says ‘will deliver important reforms for land-based bingo and casino venues’.
Rank was also hit with £118.9million of impairment charges which it said was due to ‘lower than expected performance in the year, and £7.7million of closure costs relating to 16 venues which were closed in the year’.
Rank Group shares are currently at 89.40p in early morning trading.
John O’Reilly, chief executive of Rank Group, said: ‘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.
‘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.’
