Digital growth leads to 2% revenue increase at Rank in Q1
Rank Group put a 2% year-on-year increase in revenue during the first quarter of its 2022-23 financial year primarily down to growth within its digital business.
In a trading update, Rank said like-for-like net gaming revenue for the three months to 30 September was £165.6m (€189.2m/$183.6m).
Rank’s Grosvenor Casino land-based business contributed the highest amount to this total, though the £75.3m generated during the quarter was 5% lower than in the previous year.
The operator said this was despite an increase in the number of customer visits, with the group reporting lower spend per visit. Rank said this was more than offset by a 17% revenue decline from its venues outside of London, where customer spend levels were weaker.
The Mecca Bingo venues business experienced a 2% year-on-year rise in revenue to £33.3m, with a 4% rise in customer visits offsetting a 2% drop in spend per visit. Rank also noted that revenue from its Enracha venues in Spain jumped 24% to £8.2m.
Turning to online, revenue from Rank’s digital operations was 13% higher at £48.9m, helped by a 13% increase in revenue from online activities in the UK and a 12% rise in Spain.
Grosvenor online revenue jumped 25%, with Rank saying the brand continued to perform well following its successful migration onto the proprietary RIDE platform at the start of September.
Mecca digital revenue climbed 1% and revenue from the remaining UK digital business was up 23%, with Rank noting particularly strong growth across the Stride brands on the RIDE platform.
“It is pleasing to see increasing visits in this new financial year together with strong growth in the digital business, where we are starting to see the benefits of investments in our proprietary technology platform and our cross-channel offering, with encouraging growth in both the UK and Spain,” Rank chief executive John O’Reilly said.
Looking ahead, Rank said consumer discretionary expenditure is expected to remain under pressure this year with inflation likely to remain high for some time, despite the positive impact of the energy price cap in the UK, and the impact of rising interest rates
Rank said it welcomed the recently announced Energy Bill Relief Scheme, which, as a result of its implementation for the six months between October 2022 and March 2023, the group expects energy costs in the current financial year to be approximately £34m, compared to £23m in the previous year.
This, Rank said, makes the assumption that no further support will be offered after March next year and that the group will be exposed to market prices for the final three months of the financial year. Rank added that it has put in place a number of efficiency programmes to help reduce future energy consumption.
Aside from this, Rank said other inflationary pressures continue to present an increasing challenge, particularly in its venues businesses, noting that wage inflation, food input price increases and supply chain pressures will all push up costs.
In addition, Rank said expenses for FY23 will be higher due to the non-recurring government support of pandemic-related rates relief and furlough payments received in the first quarter of the prior financial year.
“While it is a challenging trading environment and we expect this to continue in the months ahead, we remain committed to delivering Rank’s market leading, exciting and entertaining proposition to our customers,” O’Reilly said.
“The group has a number of key initiatives underway to improve long term revenues. These include some key refurbishment projects and new electronic roulette and jackpot games in Grosvenor; improving the gaming machine offering in Mecca; increased personalisation and a stronger live casino offering in the UK digital business; and the recent launch of Yo Sports in Spain.
“The group has the benefit of a strong balance sheet, enabling us to continue investing in the business through this period.”