Operator News
UK – Rank warns of ‘difficult trading conditions’ when businesses reopen
By Phil - 20 April 2020
Rank Group, the British operator of brands including Mecca Bingo and Grosvenor Casino, said it has ‘continued to make progress on our plan to ensure that we withstand this crisis and re-emerge as a strong business’ but has warned of ‘difficult trading conditions when we reopen our venues businesses.’
Weaker trading conditions commenced towards the end of February and into March and, following the introduction of COVID-19 restrictions, our International
venues were closed from 14 March 2020 and all our Grosvenor and Mecca venues were closed from March 20 2020.
In a trading statement it said: “Whilst we have limited forward visibility and with it the likely pace of recovery, we are preparing for difficult trading conditions when we reopen our venues businesses. The short-term economic impact to our venues businesses has been significant, but we have acted swiftly and decisively to mitigate where appropriate. Assuming that all venues remain closed for the rest of the financial year to June 30 2020, underlying operating profit for the year is expected to be between £48m to £58m after IFRS 16 (£40m to £50m before IFRS 16). As a result of the HM Treasury’s support measures and further progress on our own mitigations, we now estimate that our monthly cash outflow rate will be reduced to approximately £10m from May 2020. As at 31 March 2020, total available cash and facilities, after deducting customer balances, was £166m with the month of April expected to be broadly cash neutral.
Rank’s like-for-like net gaming revenue was down four per cent for the quarter ended March 31. The Digital business continued to grow strongly. Grosvenor Digital grew 27 per cent in the quarter driven by continued growth in new players and strong levels of returning players. The proportion of Grosvenor’s NGR from multi-channel players increased to 44 per cent, further demonstrating the opportunity to provide a fully integrated venue and digital experience to our customers. Mecca Digital also performed strongly with revenue up 20 per cent with continued strong operational execution. Yo’s performance improved steadily through the quarter as the impact of management and operational changes made in Q2 started to take effect. Yo’s NGR for the quarter was up nine per cent with YoCasino continuing to perform in line with the launch plan.”
Rank has introduced elevated levels of control to ensure the highest levels of protection for our digital customers including the introduction of lower deposit level triggers for safer gambling interactions, heavy promotion of setting deposit limits to our customers and stopping all social media advertising
amongst a range of other measures during the lockdown period.
John O’Reilly, CEO of Rank, commented: “With the tremendous support we have received from HM Treasury and HMRC, together with our own mitigations, we have established a robust financial position to address and withstand an extended period of economic turmoil. Given the uncertainty we face and continued social distancing measures likely to be in place for some time to come, we continue to work to protect cash and to prepare for the reopening of our venues in as safe a way as possible.
“I am enormously proud of our colleagues and how they have responded to the decisions we have had to take as well as their selfless response and contribution to the national effort. We know how important our venues are in many local communities and we’ve answered the call to contribute by stepping up to help those who need it most right now.”
