Rank, owner of Makkah, cheers on bingo as cost pressure eases
Rank, owner of Makkah, cheers on bingo as cost pressure eases
- Revenue increased 6% year-on-year to £681 million for the 12 months ended 30 June
- But profits fell 52% to £20m as cost pressures took their toll
Rank Group is emerging with ‘optimism’ after a ‘challenging couple of years’ as Mecca Bingo’s owner enjoyed a surge in demand and declining cost inflation in the first half.
The gambling company, which also owns Grosvenor’s casino, saw revenue rise 6 percent year-on-year to £681.1 million on an annualized basis for the 12 months to June 30.
Group profit in the second half also showed an improvement with a like-for-like operating profit of £16.1m compared to £4.2m in the first half, but overall operating profit for the year fell 52 per cent to £20.3 million. million.
Rank Group had reason to be optimistic after reporting sales growth after a ‘challenging couple of years’
Rank said the profit decline was “primarily due to underlying cost inflation,” particularly related to “rises in energy and labor costs and the lack of government leave payments and other pandemic-related support.”
But both the UK’s Grosvenor and Mecca sites saw their revenue recovery accelerate in the second half of the year, with profit conversion improving as energy costs began to fall.
Like-for-like sales growth at Grosvenor and Mecca’s locations for the year was 4 percent and 7 percent higher, respectively.
The gambling company also said its “strong” balance sheet allows for “continued investment in both the digital and location businesses,” which puts the company in a strong position to deliver “future growth.”
Rank said this was due to the UK government’s review of gambling legislation, which the company says will bring “major reforms to mainland bingo and casino venues.”
Rank was also hit with £118.9 million in impairment charges which he said were due to ‘lower than expected performance in the year, and £7.7 million in closing costs related to 16 locations closed in the year’.
Rank Group Shares are currently at 89.40p in early morning trading.
John O’Reilly, chief executive of Rank Group, said: ‘Customer returns to our Grosvenor and Mecca sites continue to pick up and our second half figures give cause for optimism after a very challenging few years.
“During that time, our UK locations have experienced a sharp rise in energy costs, high wage inflation, regulatory tightening, the slow return of foreign visitors to London’s casinos and more general pressure on discretionary spending. the consumer.
“However, energy costs have stabilized, inflation now appears to be declining, customers continue to slowly return to both our Grosvenor and Mecca locations and we now expect to deliver good levels of revenue and profit growth.”