The Rank Group has seen full year profits tumble 22 per cent from £50.1m to £39m, with a slight recovery in the second half of the year halting the slide further still.
Following a tough start to the year ended June 30, within which rank was dealt blows at both its casino properties, due to challenging consumer backdrop and a weather impacted Q1, and bingo halls, driven by a decline in like-for-like customer visits, a slight H2 recovery was hailed.
This was put down to a transformation programme launched in December 2018, which the group states is driving improved performance and new ways of working.
John O’Reilly, chief executive of The Rank Group, commented: “We are pleased with our full year results, with revenue growth being delivered in each of the group’s businesses in H2 following a weak start to the year.
“The group’s transformation programme, launched in December 2018, is now starting to drive performance improvements in both our UK and international venues businesses.”
Statutory revenue for the firm saw a slight increase to £695.1m for the year, as its four main reporting segments of Grosvenor, Mecca, International and Digital all saw improved performances, however only the latter reported any increase.
Building on a strong H1 Rank’s digital performance rose 17 per cent to £146.3m (2018: £124.7m), helped in large part by its YoBingo enterprise, acquired in May of last year for €21m.
Grosvenor revenue came out at £353.2m, a three per cent decline from £362.4m, with the firm lauding revenue and cost initiatives as drivers to an increased performance in a year that “is very much a tale of two halves”.
Revenue across Rank’s Mecca business was down two per cent to £202.1m (2018: £208.1m), as International saw improvements made to management, product and delivery of its gaming machine offer to recover to £44.9m (2018: £45.9m).
O’Reilly added: “The performance of Grosvenor’s casinos across the year is very much a tale of two halves. H1 was disappointing with both like-for-like revenue and operating profit down 5 per cent and 35 per cent respectively. However, in H2 both revenue and cost initiatives started to drive performance with H2 revenue up 1 per cent and operating profit up strongly at 40 per cent.
“The introduction of a new casino operating model, with simplified management structures and reduced labour hours, was launched in December 2018 and led to H2 savings of £8.2m. A further £11.3m of savings is expected to flow through into 2019/20.
“Mecca’s like-for-like revenue was down 2 per cent in the year driven by a 9 per cent fall in customer visits. Like-for-like operating profit was broadly flat in the year as operating costs continued to be tightly controlled.
“Several initiatives within the transformation programme were successfully delivered in the second half of the year and will continue to be developed into 2019/20, focusing on improving the gaming machine offer and delivering additional value to our bingo customers. Due to the ongoing underperformance of Luda, the decision was made in the year to close all three venues which ceased trading on 24 July 2019.”
Rank also stresses that it is buoyed by an “encouraging start to 2019/20,” a period in which it expects to close its purchase of Stride Gaming during the second quarter.