The Rank Group has released preliminary results for the 12 months ending June 30, 2022. In this regard, they highlight that second-half performance was negatively impacted by difficult trading conditions at Grosvenor locations, particularly at London, prompting it to reconsider its full-year operating profit estimates.
As explained by The Rank Group in a press release, underlying operating profit of €47.6m compares to a loss of €97.08m in 2020/21, which was hit harder by the pandemic with venues closed at various points. during the year.
Other data highlighted by the group are:
- Mecca being reshaped to return to profitability with seven venues closed in Q1 2022/23
- Underlying operating profit1 of £40.4m compares with a loss of £82.4m in 2020/21 which was more heavily impacted by the pandemic with venues closed at various points throughout the year
- Group operating profit of £82.1m reflects the net receipt of £77.1m from a VAT repayment, impairment charge of £25.8m net of impairment reversal, up from a Group operating loss of £92.9m in the prior year
- Group returned to net cash position pre IFRS-16 of £19.1m, supported by £100.7m of cash inflow from operations and £83.1m of VAT receipts
- Bank waiver restrictions lifted and returned to standard debt covenants from 1 July 2022
- Progression of the Group’s ESG program continues with significant developments introduced throughout the year to further enhance customer safety including a new online markers of harm model, a new risk model across Grosvenor casinos and the rolling out of a new machine management system in Mecca
Regarding these results, John O'Reilly, Chief Executive of The Rank Group Plc said: “It was a challenging year for our UK venues businesses, with unexpectedly softer trading across the Grosvenor estate in the second half of the year. Our nine London casinos, which account for over 38% of Grosvenor's revenue in normal trading conditions, have seen very weak customer volumes with overseas visitors few in number, and only starting to return in the final few weeks of the year. The lower-than-expected Grosvenor trading in H2 led us to reset full year operating profit expectations as announced in Q4".
Regarding the digital business, he underlined that it continues to improve in a difficult market context, in his words, "the transfer of the Rank brands to our proprietary technology platform is supporting revenue growth and a strong improvement to operating margins which we expect to accelerate with the migration of the Grosvenor brand in the coming weeks".
The CEO does not ignore the delay in the publication of the UK government's white paper on gambling regulation and assures that it is a disappointment. "The land-based casino and bingo sectors are in need of long overdue modernization of the regulations which govern their operation, something which the Government recognized in its objectives for the review. We expect Rank to be well positioned to benefit from the review when it concludes".
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