Rank stomachs 93m lockdown loss as leadership eyes strongest venue returns
Rank Group Plc has disclosed statutory losses of £93 million, as the LSE gambling group closes accounts on a year ravaged by COVID-19 headwinds.
Publishing its preliminary results for 2020/2021 trading (12-months ending 30 June) Rank registered a 50% decline in underlying net gaming revenues to £288 million.
Year trading saw Mecca Bingo and Grosvenor Casino properties restricted to ‘59% of available operating days’, with all venues forced to observe further capacity constraints and reduced opening hours.
Observing strict lockdown orders, Rank venues registered a 65% decline in NGR to £152 million – a heavy blow for the firm’s headline unit, which normally derives ‘79% of group revenues’.
Rank cited that during lockdown periods the group suffered monthly losses of circa £15 million, inclusive of the government’s support offered by the CJRS Scheme and business rates relief.
As a result of dire venue circumstances, Mecca Bingo and Grosvenor Casino units would post underlying losses of £67 million – registering a 238% decline against corresponding year profits of £48 million.
“The year to 30 June 2021 was exceptionally challenging for the Group and, frankly, we are delighted it is over. We are now well into a new financial year with our venues open and trading positively,” remarked Rank Group CEO John O’Reilly.
Trading against exceptional headwinds, Rank governance has raised available cash facilities to £98 million, with funds generated from the sale of its Belgium Blankenberge Casino (£25m) and a £13.3 million gaming machines tax repayment by HMRC.
Of concern, Rank reported a ‘challenging year’ for its digital business, which registered a 6% decline in NGR to £136 million (2019/2020: £145m).
Digital drags were attributed to the stringent application of online affordability checks and flagship brands being impacted by a disrupted omni-channel performance.
Further online impacts saw Rank’s newly acquired asset of Stride Gaming fined £5.9 million by the UK Gambling Commission (UKGC), related to ‘activities prior to Rank’s buyout’ which will be contested.
Commenting on the group’s digital performance, O’Reilly said: “This has been a year of transition for our UK facing digital business. Revenue has disappointed but we have been making good progress with the development of our proprietary technology platform and we will complete the migration of the Rank brands during 2021/22, freeing up development capability to enable much greater agility and speed to market for new and enhanced products, services and digital customer experiences.”
Providing a forward-looking statement, Rank detailed strong progress since UK venues reopened from 17 May with encouraging trading recorded by Grosvenor and Mecca venues.
Despite trading behind like-for-like 2019 results, Rank outlined that Grosvenor had achieved weekly revenues of £5.9 million alongside Mecca units £2.5 million weekly contribution – figures well ahead of Rank’s break-even expectations.
“I have been hugely impressed by the commitment and character of colleagues right across the Group in supporting each other, providing amazing support to our local communities, front line workers and those who are vulnerable during lockdowns, taking tough decisions where required to protect liquidity and preparing for the gradual removal of pandemic related restrictions,” O’Reilly concluded.
“Clearly there is still some uncertainty how the pandemic will impact our businesses over the next few months, however we are confident that with our leading bingo and casino brands, supported by a proven transformation programme and strengthened balance sheet, we are competitively well placed to benefit as the hospitality sector and its consumers emerge from the pandemic.”