Rank Group performance improves after venues reopen in UK and Spain
Novel coronavirus (Covid-19) restrictions in the UK meant land-based casinos, bingo halls and adult gaming entertainment centres were forced to close from 5 January until 17 May.
Similarly in Spain, Rank’s Enracha venues remained closed from early on in the year until the end of May, when measures were eased by the country’s government.
Since the reopening of UK venues, average weekly like-for-like net gaming revenue (NGR) at Rank’s Grosvenor venues was £5.5m (€6.4m/$7.6m), down 17% on the same period in 2019, but ahead of the £4.2m weekly figure it needed to break even.
Rank noted that outside London, like-for-like NGR in venues was close to 2019 levels. In London, however, NGR was 38% lower due to a lack of international tourism, reduced numbers of office workers in the city and the ongoing late night travel challenges for consumers.
Turning to the Mecca bingo halls, average weekly like-for-like NGR amounted to £2.5m in the six-week period, down 20% from 2019 and only just ahead of the £2.5m a week needed to break even.
Rank noted that trading Mecca was strongest in venues where it has trialled elements of a new proposition including enhancements to its main stage bingo game.
The operator said it expects trading in the UK to continue to improve as social distancing and international travel restrictions are eased, as well as when the 10:30PM curfew is removed in Scotland.
In Spain, average weekly like-for-like NGR for Rank’s Enracha venues stood at £500,000 in the six-week period, 34% lower than 24% but ahead of the £400,000 average weekly breakeven point.
Rank said trading in the country improved as regional restrictions on capacity limits and opening hours were gradually relaxed.
In terms of digital Rank said that the performance of its entire digital business in the fourth quarter is expected to be at the same levels seen in the second and third quarters of its financial year, which ended yesterday (30 June).
Taking all this into account, Rank said it will comfortably meet its £50m minimum liquidity test at by the end of its financial year and also expects to continue to meet all future liquidity and financial covenant tests.
Meanwhile, Rank also provided an update on an historic VAT tax related to income on slot machines at its venues.
Yesterday, First-Tier Tax Tribunal ruled in favour of Rank on its claim to be refunded VAT paid on slot machine income in the period from April 2006 to January 2013.
HMRC has 56 days to lodge an appeal, while the two parties also have 56 days to agree the exact quantum of the claim; Rank expects that the value will be materially in line with its previous estimate of approximately £80m.