Operator News

UK – Rank Group posts 58 per cent NGR fall

By Lewis - 28 January 2021

Rank Group has reported a 58 per cent fall in underlying net gaming revenue to £156.9m in the second half of 2020.

The closure of venues and restrictions led to a 70 per cent reduction in venues underlying NGR – down from £306m to £90.9m.

From an underlying profit of £58.7m over the corresponding period in 2019/20, Rank’s balance sheet has fallen to an operating loss of £41.8m in 2020/21.

Rank’s balance sheet has been strengthened through an equity placing of £70m in November, alongside lending banks agreeing to 12-month extension to the existing debt covenant waivers with a £50m minimum liquidity test until March 2022.

Rank has said that its closing cash and available facilities of £128.3m mean the group is ‘confident we will meet the £50m liquidity test through the going concern period despite plausible downside scenarios’.

Proforma Digital NGR (including the Stride brands) decreased 14 per cent with like-for-like revenue up one per cent.

“There is no doubt that the impact of the COVID-19 pandemic has been far beyond anything we or any other leisure operator could have imagined or planned for,” commented John O’Reilly, Chief Executive of Rank Group.

“The ever-changing restrictions coupled with curfews, which in particular have a seismic impact on our Grosvenor venues, have resulted in an exceptionally challenging first half for the Group.

“I have remained incredibly impressed with our teams who have displayed high levels of professionalism and adaptability under the continuously changing circumstances. Despite the difficulties we are facing, they have continued, through a range of initiatives, to help our local communities, front line workers and those who are vulnerable.

In light of the pandemic, Rank’s Board has not proposed an interim dividend but has said it is committed to restarting dividends when circumstances permit.

Mr. O’Reilly said: “We have taken a stringent approach in applying affordability restrictions, particularly on higher staking customers, which has impacted revenues in our UK facing digital business in the half.

“We have been making good progress in the development of our proprietary technology platform to prepare the digital business for its exciting future.

“Once we have successfully completed the migrations of Mecca and Grosvenor, our in-house technology and development capability will give us much greater agility and speed in delivering developments, providing the Group with a platform for growth both in the UK and internationally.

“There continues to be uncertainty looking ahead, particularly as our venues remain closed and we have no firm guidance as to when we will be able to reopen.

“We remain focused on managing our liquidity position and, following the successful £70m equity placing in November 2020, combined with the support of our lending banks, I believe we have the balance sheet strength to survive an extended period of closure.

“We are now focusing on delivering the next stage of our Transformation plan and are ready to reopen our venues when the virus is under control and the vaccine roll-out has achieved its purpose.”