Rank Group raises £70.0m through placement and subscription
Mecca Bingo and Grosvenor Casino operator the Rank Group has successfully raised £70.0m through a share placement and retail subscription.
The operator, through investment bank Peel Hunt and Goodbody Stockbrokers, placed 76,736,762 shares priced at 90 pence per share, a 4.3% premium ont Rank’s closing share price yesterday (5 November) of 86.9 pence.
In addition, Rank subscribed a further 1,009,258 new ordinary shares at the same price using the PrimaryBid platform.
The total of 77,746,020 shares issued represented 19.9% of Rank’s share capital, the most that can be issued to raise funds.
The operator said it would use the funds to “strengthen the Company's balance sheet” and “provide ample working capital to operate through this challenging trading environment” as well as continue to restructure its business, reiterating statements it made yesterday when it said it was exploring a placement.
In addition, the operator also announced that group like-for-like gaming revenue was down 52% and total net gaming revenue down 47% for the quarter ended 30 September, the first quarter of its 2020-21 financial year as all sectors - including digital - saw revenue shrink.
Revenue from Rank’s Grosvenor venues was down 74%, while Mecca Bingo revenue declined 45%. International revenue was down 26% while digital revenue was 3% lower than the same quarter in 2019-20.
The operator noted that Grosvenor’s venues were closed for much of the quarter, but said they performed above expectations once they opened from 15 August, though the implementation of a 10 p.m. curfew in September had a “material impact” at the end of the period.
It said that Mecca’s performance after reopening on 4 July was also ahead of expectations.
The decline in digital, meanwhile, came mostly due to the retail shut-down, leading to low contributions from its “more valuable omni-channel customers”, while tighter affordability restrictions limits through the pandemic also played a part.
Rank’s revenue is likely to continue to be impacted as British brick and mortar casinos and bingo halls have now been forced to close again in a new national lockdown from 5 November until at least 2 December.