Rank set to meet expectations as revenue projected to grow 69% in Q1
In a trading update, Rank said total like-for-like revenue for the three months through to 30 September is set to reach £163.1m (€192.3m/$223.1m), in line with its expectations for the period.
This expected increase, Rank said, is primarily down to growth within its venues business, with revenue for its Grosvenor Casino segment forecast to increase 209% year-on-year to £79.2m as a result of the full reopening of venues after novel coronavirus (Covid-19) rules were eased.
Rank said that while London continues to feel the impact of reduced tourism, its Grosvenor venues outside of London saw net gaming revenue running at close to pre-pandemic levels.
Revenue from its Mecca Bingo venues is also set to rise 41% to £34.0m as visitor numbers gradually improved through the quarter, but visits from older and more frequent players was slower to return than other cohorts.
In addition, revenue from Rank’s Enracha venues in Spain is set to climb 20% to £6.5m as Covid-19 restrictions continue to gradually ease.
Turning to digital, revenue from Rank’s UK-facing digital operations is set to increase 4% to £38.2m.
Ranked noted a 12% rise in Grosvenor digital revenue, helped by an increase in omni-channel players following the reopening of its land-based casinos, while Mecca digital revenue was also up by 6%.
In addition, international digital revenue is forecast to be 11% higher at £5.2m, despite the ongoing impact of regulatory changes preventing promotional offers being made to new customers in Belgium.
Based on its current trading performance, Rank said it expected like-for-like revenue for the full year ended 30 June 2022 to be in the range £700m to £750m, with earnings before interest and tax likely to be between £50m and £75m.
“We have seen an excellent response from our customers as they return to our venues, with our colleagues doing a great job in ensuring they are being properly entertained within a safe environment,” Rank chief executive John O’Reilly said.
“Whilst forecasting remains difficult as we emerge from the pandemic in an environment of volatile costs and numerous supply chain challenges, we are confident that trading will continue to improve across each of our businesses during the remainder of the year.”
The forecast growth comes after Rank in August revealed that its revenue was cut in half during 2020-21 as it felt the impact of the pandemic. Rank’s operating loss for the year also widened from £49.1m to £92.9m.
Also in August, it was confirmed that Her Majesty’s Revenue and Customs declined to appeal a ruling from the First-tier Tribunal Tax (FTT) Chamber regarding the application of VAT to B2 gaming machine revenue.
The decision means Rank was able to agree a 60-day extension with the FTT to allow the operator to settle its refund claim with HMRC, with Rank expecting to receive a fee in the region of £80m.