Rank targets digital growth after ‘solid’ year
Rank Group has announced that its profits increased by 15% during the financial year as it outlined plans for a new digital-focused strategy.
In its final results for the year to June 30, the owner of Mecca Bingo and Grosvenor Casinos, which last week abandoned its joint bid with 888 for William Hill, said that profit before taxation after exceptional items was £85.5 million (€99.5 million / $112.9 million), compared to £74.5 million in the prior 12 months.
Group revenue was up 2% to £753 million, while group EBITDA before exceptional items increased by the same amount to £128.2 million.
The only negative among the figures was a 2% drop in group operating profit before exceptional items to £82.4 million, while adjusted profit before tax was up 4% to £77.4 million.
Chief executive Henry Birch said: “I am pleased to report a solid set of results with group revenue up 2%, again recording like-for-like growth across all brands and channels in the year.
“This year we have focused on delivering significant projects to ensure we have the right platform in place for future growth. This included the migration of our digital business onto a new platform, the roll out of an improved retail casino management system and investments into new generation machines in both our casino and bingo venues.
“At the same time we have delivered a substantial increase in the dividend to our shareholders.
“Rank remains in a strong financial position, possesses market-leading brands and has a clear strategy for long-term growth. The board continues to look to the future with confidence.”
Revenue from Mecca Bingo was slightly down year-on-year at £287.7 million, but Grosvenor was up 4% to £438.6 million. Operating profit from both subsidiaries suffered a slight dip due to a decrease in digital contributions.
Rank noted that it migrated its UK digital business to its new Bede Gaming-powered digital platform, which it said was “completed on time and within budget”. It said its digital casino brand benefited substantially from the migration, but Mecca saw a 5% drop in digital revenue decline during the Q3 period.
The company said that its priority during 2016-17 will be the enhancement of its digital offering. Its plans include a Grosvenor sports book, a new digital Mecca VIP site and the launch of its enracha.es site in Spain during H1 that will offer digital bingo, blackjack, roulette and slots.
The company said: “In 2015-16, our digital operations generated 13% of group revenue whereas digital channels now represent around 39% of Great Britain's gambling market (excluding National Lottery). This presents a significant growth opportunity.
“We are in the process of enhancing our capability in this area such that we can meet the changing needs of our customers and capture a greater share of the digital market.”
Related article: Rank and 888 scrap William Hill takeover bid