Operator News
UK – Rank feels the heat of summer heat wave
By Phil - 25 October 2013
Revenues were down by seven per cent for British operator Rank for the 15 weeks to October 13 caused by the exceptionally hot weather in July which adversely affected customer visits across our venues, producing a lower casino win margin in London and a disappointing performance in Mecca’s venues and digital channel.
However the 19 casinos bought from Gala have performed well with their integration being completed without issue. Total Group revenues increased by 15 per cent as a result of the continuing contribution from the 19 recently acquired casinos.
Rank stated: “As a result of the disappointing start to the year, management is taking both revenue improvement and cost reduction actions to mitigate the impact of the revenue decline, particularly in the Mecca brand. The impact of these actions is expected to commence in the second half of the financial year. Accordingly the board anticipates operating profit for the full year to be marginally below market expectations. However the board expects the first half of the financial year to be materially below that reported in the corresponding period last year with a stronger second half as the benefits of management actions and the impact of our current capital investment programme in the 19 acquired casinos flow through.”
Like for like revenue in the 15 weeks declined by seven per cent whereas total revenue increased by 35 per cent. Venues were adversely impacted by the hot July weather and a lower than normal win margin in London. This contributed to a six per cent fall in customer visits and an eight per cent fall in like for like venues revenue in the 15 week period. Total venues revenue increased by 35 per cent. Like for like spend per visit fell by two per cent in the 15-week period due to the lower than normal win margin in London, driven by major player activity. The 19 casinos have performed well. The acquired casinos have been integrated without issue and we are progressing with the capital improvement programmes. The installation of new gaming product has commenced and will be completed by the end of the first quarter of 2014. The refurbishment of the Leicester and London Tottenham Court Road casinos is underway and will be completed by Christmas 2013.
Mecca Bingo aw like for like and total revenue decline by seven per cent and two per cent respectively as customer visits were adversely impacted by the July hot weather combined with a fall in the customer base and the continuing decline in visit frequency. Despite an increase in digital spend per visit, digital revenues in the 15 week period fell by three per cent with an increasingly competitive digital bingo market adversely impacting the effectiveness of our marketing and customer acquisition campaigns. Additionally following the disposal of Blue Square Bet, the allocation of service costs to Mecca’s digital channel has increased.
