Rank Group posts 13% jump in digital NGR for fiscal Q1

Rank Group has posted a 2% rise in Q1 2022/23 revenue year on year (YoY) but has suffered a dip from its retail operations outside of London due to the ongoing economic situation in the UK. Rank’s financial reporting period runs slightly differently to traditional systems as it covers two calendar years and runs in accordance with each financial year from April to April. Group NGR reached £165.7m, as the Grosvenor Casino owner said that a tough trading environment along with customer squeezed spending is expected to continue to impact the business. Rank’s digital channels NGR grew by 13% YoY, but at its venues revenue fell by 2% due to the aforementioned issues. Digital was the strongest area for Rank in this reporting period as both UK and Spanish businesses saw 13% and 12% surges in revenue, respectively. Grosvenor online platform performed well, with revenue jumping by 25%. According to the operator, Grosvenor has continued to perform well since it migrated to the firm’s proprietary RIDE platform at the beginning of September. Mecca’s digital revenue increased slightly by 1% while the remaining UK digital businesses increased up by 23% YoY, with the operator noting significant growth in the Stride brands on the RIDE platform. Visits to its Grosvenor Casinos did grow in the quarter but spending per visit was lower, which led to a 5% YoY decline in revenue. There was strong growth at Grosvenor’s London venues, where revenue shot up by 21%, but this was offset by a 17% decline in revenue from venues outside the capital. Average weekly revenue in the quarter was £5.7m, which represented a 5% YoY drop but was 12% higher than the results in Q4 2021/22. John O’Reilly, CEO of Rank, said: “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.” Following the results, Rank provided an outlook on how it will perform in the upcoming months. The operator said that it expects consumer spending to continue to be impacted by the current economic situation and that it will feel this pinch most in the Grosvenor venues outside of London. The firm also predicts that its energy costs in the current financial year will leap from £23m to £34m if the government offers no further support. Rank has confirmed that a number of efficiency programmes are already underway to reduce its energy usage. However, the business expects costs to keep rising due to wage inflation, food input price increases and supply chain pressures. It also said that due to the firm no longer receiving governmental help like it did during the pandemic, this will further impact costs. Russell Pointon, director of the financial analyst firm Edison Group, noted that the while costs continue to rise for Rank, the new expected amount is far lower than previous assumptions and should be welcomed. He said: “With respect to outlook, management continues to highlight the expected pressures on consumer incomes and Rank’s cost base including wages, food and other supply chain costs. “There is firmer guidance on energy costs, with an expected increase of 47% YoY in full-year 2023 to £34m, but this includes Q4 that is currently uncovered. This is much lower than the £46m previously indicated at the time of the FY22 results, due to the benefit from the Energy Bill Relief Scheme, so should come as welcome news.” Ranks’ shares were down 8.5% to £58.45 at the time of writing.