British gambling company Rank Group disclosed today it has suffered operating losses of £93 million due to the coronavirus pandemic. The restrictions forced the London-listed company to shut down its brick-and-mortar venues for almost 60% of the year. The firm reports its yearly net gaming revenue has dropped almost in half, from £629.7 million the previous year to £329.6 million.
Rank Group, which owns the Grosvenor Casinos, Enracha, and Mecca brands, says its underlying net gambling revenue dropped to £288.2 million compared to the previous year’s results of £575.6 million. The company reported underlying operating losses of £67 million. Rank’s brick-and-mortar operations registered underlying net gambling revenue of £151.9 million, which makes for a 65% decrease compared to the results from the previous year.
The Group reports it incurred monthly cash losses of £15 million, which resulted in a net cash outflow of £21.2 million from its operations for the year to June 30. John O’Reilly, Chief Executive Officer of the Group, admits the year was indeed very tough for the company. On a more positive note, Mr. O’Reilly expressed his pleasure that the firm has now entered a new financial year. Rank has returned to normal operations, with its landbased venues open.
The company has restored its confidence and has made decent progress across its digital channels, Rank’s CEO said. The performance of the Group’s brick-and-mortar venues has come ahead of expectations after the British government eased the restrictions on the local hospitality industry on May 17. Rank foresees its landbased operations will see further growth once the restrictions on travelling ease down and tourists begin to return to the country, and especially to the British capital London.
UKGC Restrictions Made It Tough on Rank’s Digital Operations as Well
CEO O’Reilly admitted the past year has also been tough for the company’s digital operations, largely due to the enforcement of the strict affordability restrictions the UK Gambling Commission introduced to ensure higher levels of consumer protection. The British gambling regulator introduced the measure after evidence came to light that some gamblers may be at higher risk of gambling problems during the coronavirus lockdowns. UKGC-licensees are now required to also perform affordability checks on their customers.
Since relaunching in mid-May, the Group’s Mecca and Grosvenor venues have generated average weekly net gaming revenue of £5.7 million and £2.6 million, respectively. These results exceed the break-even figures of £4.4 million and £2.4 million per week for the two brands.
Shore Capital analysts project venue revenues to decrease by around 10% in the full fiscal year 2022. The revenue is likely to get back to its pre-pandemic rates by the fiscal 2023. Although there is still some uncertainty on the speed and timing of the Group’s recovery, the company is still encouraged by its performance since it reopened its venues, CEO O’Reilly said.
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Daniel Williams
