UK-listed gambling operator Rank Group’s digital division reported a 56% rise in operating profit despite new taxes on customer bonus offers.
On Thursday, Rank released its fiscal H1 report, which saw like-for-like revenue (before customer incentives) essentially flat at £378m in the six months ending December 31, 2017.
H1 earnings (pre-exceptional items) improved 6% to £63.3m and operating profit gained 14% to £41.7m. Meanwhile, statutory results showed pre-tax profits falling 7% to £32.8m, thanks mainly to nearly £6m in impairment charges from two Grosvenor Casinos in Dundee and Didsbury.
However you wish to slice it, Rank’s UK digital operations were the belle of its ball, reporting revenue rising 16% to £60.6m and operating profit up 56% to £11.4m. Rank CEO Henry Birch hailed the “particularly strong” digital results, especially following the recent application of gaming duties on customer bonuses.
Rank’s Meccabingo.com site reported H1 revenue rising nearly 10% year-on-year to £36.1m, while Grosvenorcasinos.com shot up 27% to £24.5m thanks to its strong slots and live casino offer, the latter getting a boost from new live casino apps and the launch of ‘dual play’ live streaming.
Rank hopes to extend its digital hot streak by launching a new television marketing campaign in fiscal H2. Rank launched live-streamed roulette from the Grosvenor Victoria casino in H1 and plans to add a live baccarat stream in H2.
Rank is also intent on making multi-channel activity its major focus in 2018, part of its three-year plan to boost the number of Grosvenor retail customers playing digitally from its current 3.5% to 15%. Rank launched a new Grosvenor employee affiliate scheme in H1 to help steer digital migration, which Rank says helped push digital first-time depositors up 40% in its fiscal Q2.
In Spain, Rank’s Enracha division soft-launched its digital operations last September on a Bede Gaming platform, and while the Spanish-facing site is currently limited in scope, the company says initial feedback has been good for both the brand and its multi-channel offer.
On the retail side of things, Grosvenor Casinos revenue slipped 2.3% to £197.2m while operating profit improved 15% to £30m. The casinos reported reduced visitation and a lower than normal win margin, particularly at its London venues, which was partially offset by a strong performance at provincial venues.
Mecca venues revenue slipped 3.7% to £104m and profit fell 4.5% to £12.7m. Fewer customers visited Mecca venues in H1 but those who did reported higher spend per visit.