BUSINESS

Rank Group profit slumps on heat wave and digital doldrums

TAGs: Grosvenor Casinos, Mecca Bingo, Rank Group

rank-group-grosvenor-casinos-mecca-bingoUK gambling operator Rank Group saw revenue rise but profits plummet in the first half of its fiscal year. Group revenue climbed 16% to £352.4m in the six months ending Dec. 31, but profit fell 23% to £27.7m thanks to poor performance at Rank’s Grosvenor Casinos and Mecca Bingo operations. Rank CEO Ian Burke described H1 as “challenging” but maintained the Group’s profit in H2 would be “broadly in line with the comparable period last year” excluding the legacy costs of Rank’s 2013 acquisition of 19 Gala Coral brick-and-mortar casinos. Rank is majority-owned by Malaysia’s Guoco Group.

Rank’s Grosvenor Casinos reported revenue of £194.2m, up 34% due primarily to the Gala Coral additions. Subtracting the extra venues, Grosvenor revenue actually fell 4%, largely due to poor performance at its London venues, which saw handle fall 6% and win margin fall 2.9% during the period. Total venue profit rose 7% to £29.1m. Rank now operates 56 casinos in the UK and two in Belgium.

Grosvenor’s digital arm rose 32% to £5.8m thanks to the H1 launch of a live dealer offering, which has become the largest online revenue stream. The digital divison’s losses fell 50% to £900k as online customers increased 27% to 42k and spend per visit rose 9% to £29.

Mecca Bingo revenue fell 2% overall to £143.5m, with equal declines in both venue and digital channels. Venue profit fell 36% to £7.1m while digital profit fell 40% to £6.8m. Like many of its counterparts, Rank cited last July’s heatwave as having contributed to a 10% decline in visits to its 97 UK bingo venues but that doesn’t account for the 5% decline in Mecca’s online visits, unless Mecca’s servers are rain-powered. (Rank estimates the total impact of last summer’s sunshine on its H1 group numbers at £3.2m.) Digital spend per visit rose 3% to £12.83 and Mecca mobile revenue rose 24%, accounting for 22% of Mecca’s digital pie, up from 17% in H1 2013.

Rank’s Spanish-facing bingo business Enracha saw revenue up 7% to £14.7m but profit fell 25% to £300k, as customer visits to the 11 Spanish venues were flat and a decline in popularity of Category B3 machines pushed amusement machine revenue down 12%.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com