The Rank Group has shared an optimistic update on its Q3 financials, reporting a marked increase in group revenue to £182.3m, an encouraging sign as the company marches through the 2023 fiscal year. These figures, presented on a like-for-like basis up until 31 March, manifest the group’s steady performance in both land-based operations and the digital realm.
The stalwart of Rank’s revenue stream remains the land-based Grosvenor venues which, although showcasing the least growth, continue to be the bedrock of the company’s earnings. Grosvenor venues saw a 3% uptick in revenue compared to last year, rounding up to £80.0m. Rank credited a 5% rise in visitor numbers for this improvement, which is quite notable considering Q3 is traditionally a more subdued quarter. Consequently, the average weekly net gaming revenue (NGR) for Grosvenor also enjoyed a 2% year-on-year increase, reaching £6.2m. This aligns well with Rank’s target of achieving £7.0m in weekly NGR from its Grosvenor venues business.
Rank’s Mecca bingo venues business distinctly outperformed in this period with a revenue surge of 12% to £37.3m, spurred by a 5% hike in footfall as well as a 7% increase in spend per visit. The organization reaped substantial gains from vigorous trading over the traditionally profitable Mother’s Day and Easter weekends.
In Spain, Rank’s Enracha venues also experienced robust growth with a 9% jump in revenue to £10.0m, further solidifying the company’s position in the land-based sector internationally.
Turning to the digital spectrum, Rank reported a healthy 6% growth in revenue, amounting to £55.0m for the quarter, with UK digital revenue itself growing by 4%. Spanish digital revenue presented even more dynamic results with a 20% year-on-year increase. However, within the UK, there was a variance in performance between Mecca NGR, which rose by an impressive 21%, and Grosvenor’s digital output that increased merely by 1%, affected by a weaker gaming margin and a few substantial customer wins.
Furthermore, a deliberate decision to cut back on marketing investments yielded a 13% reduction in NGR for other UK digital brands. Nonetheless, Rank anticipates the implementation of a new content management system, which went live in Q3, to enhance operational efficiency and customer proposition enhancements across both Mecca and Grosvenor online platforms.
With Q3’s solid performance in the rearview, the year-to-date revenue for Rank up to the end of March stands at £544.9m, 8% higher than the corresponding period last year. Specific contributions to this improvement include Grosvenor venues revenue, up 8% at £274.5m, and Mecca venues revenue, climbing 10% to £104.5m. The Enracha venues division in Spain echoes this positive trend with a 9% revenue increase to £29.5m. Digital business across the board has not lagged, witnessing a 7% rise in revenue to £163.4m for the reporting period.
As Rank ventures into the final quarter, the company’s outlook remains buoyant. Early indicators show an ongoing uptrend in performance for April, and thus operating profits for the fiscal year ending on 30 June are expected to be in line with projections.
“We continue to make good progress across both our venues and online businesses,” CEO John O’Reilly remarked with satisfaction, affirming that Q3 outcomes matched the board’s anticipations. O’Reilly is particularly enthusiastic about the upcoming land-based reforms promulgated in the government’s white paper, which Rank anticipates will double the number of gaming machines in their Grosvenor Casino estate and facilitate electronic payments in their casinos and bingo venues.
In a strategic move, Rank also disclosed that it had reached an agreement to divest its stake in Passion Gaming, an Indian online rummy business. Although financial details remain under wraps, the transaction, described to involve a “nominal consideration”, is expected to be finalized in the upcoming weeks. The acquirer’s identity has not been disclosed, adding a layer of mystery to this corporate realignment.
In conclusion, Rank Group stands poised to capture further success and growth, strategically optimizing both its traditional venues and digital offerings, while preparing to harness the benefits of forthcoming regulatory advancements.
