Rank Group Suffers Fiscal Year Losses Despite Increased Revenues
LISTEN TO THIS ARTICLE:Rank Group has reported a 5.9% revenue increase to £681.9 million for the 2022-23 financial year. However, they recorded a statutory net loss due to increased impairment and other charges. The net loss for the FY was £95.3 million.
The operator enjoyed year-on-year growth across all its segments in the 12 months ending 30 June including the land-based Grosvenor, Mecca, and Enracha businesses, all of which suffered during the pandemic.
Furthermore, Rank saw growth in its digital business with a 10.4% rise in revenue to £202.9m. However, due to growing operating costs and higher impairment charges, the business saw a deficit.
CEO Believes Situation is Improving
Rank Group CEO John O’Reilly recognized the higher costs while discussing about the FY results but he believes that costs are stabilizing, inflation is easing, and that revenue and profits will soon grow.
The return of customers to our Grosvenor and Mecca venues continues to pick up and our second half numbers give cause for optimism after a very challenging couple of years. During that time, our UK venues have faced a surge in energy costs, high wage inflation, a tightening in the regulatory environment, the slow return of overseas visitors to London’s casinos and the more general pressures on the consumer’s discretionary expenditure. However, energy costs have stabilised, inflation appears to now be easing, customers continue to slowly return to both our Grosvenor and our Mecca venues. We now expect to deliver good levels of revenue and profit growth.
Strong Land-Based Recovery
Rank’s main source of revenue was the land-based casinos. Net gaming revenue from the segment was up 3.3% year-on-year to £306.3 million. However, an impairment charge was recorded of £53.3 million relating to 23 venues due to low trading performance and an impairment reversal of £6.6 million relating to a further seven venues.
The company also saw growth from the Mecca bingo business with revenue up 1.7% to £136.3 million. This was despite the permanent closure of 15 venues in 2022-23. Once again, there was an impairment charge of £61.5 million relating to 70 venues.
The Spanish-facing Enracha business saw revenue grow 19.9% to £36.1 driven by gaming machines and main stage bingo. Foot traffic was up 16% year-on-year, but there was an impairment charge of £4.1 million.
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