UK-listed gaming operator Rank Group’s digital division outperformed its retail operations in its fiscal H1 as the company preps the launch of new online slots and bingo brands.
Rank’s interim results for the six months ending December 31 show retail revenue essentially flat at £326.2m while digital operations gained 11% to £52.4m. Group earnings declined 5% to £59.7m and after-tax profits fell 17% to £35.4m, in part due to rising costs associated with the introduction of the National Living Wage.
Rank CEO Henry Birch said the company’s retail operations had experienced “challenging trading conditions” in H1 but the digital division “continues to grow strongly and there remains significant potential for this channel as we deliver improvements in H2.”
Most of the digital growth came courtesy of Grosvenorcasinos.com, which saw revenue jump 39% to £19.3m while the Meccabingo.com site was flat at £33.1m.
The Grosvenor online growth was spurred by the launch of a new sportsbook and an improved poker product during H1. The Kambi Sports Solutions-powered sportsbook is being used by around 15% of Grosvenor’s weekly active customers and Rank says the sportsbook is proving “an effective retention tool.”
Rank restructured its digital operations into a single team during H1, and will report as a single entity from now on. Rank believes the single team supports a multi-brand approach, which will include the H2 launch of a new bingo brand, Luda, at both online and retail, as well as a new “slots-led” digital-only brand.
Both of these new brands will be aimed at “new, existing and lapsed digital customers.” Birch confirmed that the brands would target millennial gamblers, as the company’s existing brands apparently have the air of mothballs about them that limits their appeal to “a certain demographic.”
Rank notes that its digital operations account for 14% of its overall revenue, whereas digital makes up 45% of the broader UK gambling market, leaving lots of room for Rank’s continued online growth. H1 saw Rank launch a new Mecca-branded “VIP microsite” along with a new VIP program, and the company is mulling the expansion of its online live dealer casino offering by streaming tables from land-based casinos.
Rank’s Spanish-facing Enracha brand saw H1 revenue rise one-third to £16.2m while operating profit more than doubled to £2.9m. Rank credited the gains to a stronger Spanish economy. The full Enracha.es site launched in H1 and the company expects to soon add slots to its existing mix of bingo, blackjack and roulette.