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Continued venue closures push revenue down 72% at Rank in Q3

| By Robert Fletcher
Rank Group, operator of the Grosvenor Casinos and Mecca Bingo brands, has reported a 72% year-on-year fall in net gaming revenue in its third quarter, primarily due to the impact of the ongoing closure of its land-based facilities due to novel coronavirus (Covid-19).
Rank Q3

Like-for-like revenue in the three months to 31 March was down 76% from Q3 of 2020, with venue revenue plummeting 98% and digital revenue 3%, though the operator did not provide absolute revenue figures.

All of Rank’s venues in the UK remained closed throughout the entire quarter, though nine of its Enracha sites in Spain were able to reopen towards the end of Q3 after restrictions were eased in the country.

The sharp year-on-year drop in venues revenue comes after Rank was able to operate its land-based sites for almost all of Q3 last year, with the facilities only being forced to close in the middle of March 2020 when new Covid—19 measures came into effect in the UK and Spain.

Turning to digital, though revenue was down year-on-year, Rank reported a 3% like-for-like in revenue compared to the second quarter of its financial year.

Revenue from the Stride business – which it acquired in October 2019 – was up 7% quarter-on-quarter, while Mecca Digital revenue also increased by 4% and Yo Bingo revenue 10%. However, Rank did note a 2% drop in revenue from its Grosvenor Digital segment.

Reflecting on the quarter, Rank chief executive John O’Reilly said the operator performed in line with expectations, and forecast growth in Q4 and beyond as the UK begins to reopen its land-based casino and bingo sector from next month.

Casinos, bingo halls and adult entertainment centres in England will be allowed to reopen from 17 May as part of the government’s exit from Covid-19 lockdown.

“We have ended Q3 broadly where we expected to be and are now very focused on the reopening of our UK venues from 17 May alongside continuing to drive digital NGR growth,” O’Reilly said.

“Our business has inevitably been heavily impacted by the pandemic but, with the strong support and dedication of our colleagues, we are now very much looking forward to reopening our casino and bingo venues, welcoming back our customers and providing the great entertainment and omni-channel service in a Covid-safe environment we know they enjoy.”

Meanwhile, Rank also published details of its liquidity at the end of the quarter, revealing £89.8m (€104.0m/$125.1m) in total cash and available facilities, ahead of its minimum liquidity covenant of £50.0m.

During the quarter, Rank received a £13.4m duty refund following the Supreme Court’s decision in favour of another taxpayer on the treatment of free gaming chips, while the amount of deferred rent was reduced to £13.9m from £17.3m at 31 December 2020.

Since the end of Q3, Rank completed the sale of its Blankenberge casino in Belgium and received the associated £25.0m of cash sale proceeds.

Rank also noted it expects to make its scheduled £19.7m term loan amortisation payment on 31 May, while based on the government’s current timetable for venues’ reopening, it expects to continue to meet its banking covenants.

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