Rank ‘moving in the right direction’ as Grosvenor drives H1 growth

The Rank Group has lauded a successful six months for the period ending 31 December 2019, attributing a 10 per cent year-on-year lift in net gaming revenue to the progress made on the group’s transformation programme, as well as a strong performance from its Mecca and Grosvenor brands.

Publishing its H1 2019/20 results, the Group explained that its digital like-for-like NGR had grown by 14 per cent, driven by the performance of the Mecca and Grosvenor brands.

Speaking on the results, John O’Reilly, chief executive of The Rank Group Plc said: “We are pleased with The Group’s first half performance which demonstrates that the transformation programme is delivering the right results.

“The revenue growth in our digital business and across our Grosvenor and Enracha venues shows that we are moving in the right direction in key areas of our business. We remain on track and are confident in our ability to deliver operational and financial improvements underscored by a relentless commitment to delivering exciting, entertaining and safe gambling environments and experiences for our customers.

“The successful integration of Stride into our business will ensure that we benefit from strong synergies, proprietary technology and a first-class digital team, all of which will position us well for the second half of the year. These are a good set of numbers and are a testament to our committed and talented colleagues across the group who have worked hard to deliver them.”

Mecca’s NGR grew by 13 per cent in the first half of the year, which has largely been driven by customer journey improvements and strong promotional activity.

Meanwhile strong growth in Grosvenor’s active customer base helped deliver a 21 per cent increase in Grosvenor’s NGR during the period, with 33 per cent of Grosvenor’s revenue coming through Grosvenor One.

As part of the chief executive review, O’Reilly explained that the push for safer gambling has been a big focus for Rank: “During the first half, we finalised the Group’s safer gambling workstream, with an initial focus on enhanced training for colleagues, review of customer messaging, continued development of our affordability and propensity models, the introduction of machine limits and tighter entry controls within Grosvenor venues.

“The successful integration of Stride is a key priority for the group with the project now falling within the transformation programme’s framework to ensure the benefits from combining Stride’s and Rank’s digital businesses are maximised.

“Grosvenor venues had a particularly strong H1 with total NGR up 15 per cent driven by higher staking levels and table win margin (up 0.8 ppts). Growth was seen across all product areas as customers reacted positively to our recent investment into product, technology and customer facilities.

“Electronic roulette’s performance also benefited from the change in B2 machine regulation where maximum stakes were reduced to £2 in betting shops. Cost savings delivered from the casino operating model changes are on track to deliver annualised savings of £19m. This alongside customer loyalty programme changes contributed to Grosvenor’s 137 per cent improvement in LFL underlying operating profit.

“Mecca venues saw a small decline in LFL NGR in the six-month period, down 1%. Previous trends continued with a 4 per cent increase in spend per visit being offset by a fall in customer visits. NGR declines were seen across both mainstage and interval gaming, however, following recent investments, amusement machines grew NGR by 1 per cent.

“Mecca continued with its portfolio of successful entertainment events and bingo variants in the half and is now focused on increasing the relevance of the customer proposition within our local communities.

“Work continues on creating a safer environment for all our customers. For our digital channel, an affordability model was introduced to help risk score all of Rank’s digital customers with the aim of seeking to ensure that customers are playing within their means.

“For our UK venues, length of play and loss limit customer alerts were introduced across our gaming machine products. We are trialling ID scanning technology within our Grosvenor venues and expect to roll this out across the estate in the second half of the year, further tightening entry controls into our casinos.”