REG - Rank Group PLC - Trading Statement

RankAnnouncement

13/10/2022 07:01

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RNS Number : 7032C  Rank Group PLC  13 October 2022

Trading statement

 

The Rank Group Plc

LEI: 213800TXKD6XZWOFTE12

 

 

13 October 2022

 

The Rank Group Plc (LSE: RNK) (Rank or the Group) announces the following
trading update for the quarter to 30 September 2022.

 

Group like-for-like Net Gaming Revenue ('NGR') for the first quarter ended 30
September 2022 was up 2% to £165.7m. On a channel basis, digital grew NGR by
13% and venues like-for-like NGR was down by 2%.

 

 LFL NGR           Q1 2022/23  Q1 2022/23

                   £m           change
 Grosvenor venues  75.3        (5)%
 Mecca venues      33.3        2%
 Enracha venues    8.2         24%
 Digital           48.9        13%
 Group             165.7       2%

 

Grosvenor venues saw visits grow in the quarter, however, with lower spend per
visit, NGR fell by 5%. London performed strongly, with NGR up 21% driven by a
20% increase in customer visits. This was more than offset by a 17% NGR
decline from our venues outside of London where customer spend levels were
weaker. Average weekly NGR in the quarter was £5.7m, down 5% on the
comparable period but up 12% on Q4 2021/22.

 

Mecca venues like-for-like NGR grew by 2% in the quarter, driven by a 4%
increase in customer visits offsetting a 2% decline in spend per visit.

 

Digital NGR grew by 13% in the quarter with good growth across both the UK
business, which was up 13%, and the Spanish operations, up 12%.   Grosvenor
performed strongly in the quarter with NGR up 25% and has continued to perform
well post its successful migration onto the proprietary RIDE platform at the
start of September.  Mecca digital NGR was up 1% and the remaining UK digital
business was up 23%, with particularly strong growth in the Stride brands on
the RIDE platform.

 

Outlook

Consumer discretionary expenditure is expected to remain under significant
pressure this year with inflation likely to remain high for some time, despite
the positive impact of the energy price cap, and the impact of rising interest
rates. We expect to see some continued impact of these external pressures on
the business, particularly in the Grosvenor venues outside of London.

 

The recently announced Energy Bill Relief Scheme is welcomed by the Group and,
as a result of its implementation over the 6-month period October to March, we
now expect energy costs in the current financial year to be circa £34m, up
from £23m in FY22. This assumes that no further support is available beyond
March 2023 and the Group will be exposed to market prices for the final three
months of the financial year. A number of efficiency programmes are underway
to reduce our future energy consumption.

 

Other inflationary pressures continue to present an increasing challenge to
the Group, particularly in our venues businesses, with wage inflation, food
input price increases and supply chain pressures all pushing up costs. FY23
costs will also be higher due to the non-recurring government support of rates
relief and furlough payments received in the first quarter of the prior
financial year. We continue to focus on initiatives that mitigate these cost
pressures as much as possible.

 

John O'Reilly, Chief Executive, said:

 

"It is pleasing to see increasing visits in this new financial year together
with strong growth in the digital business, where we are starting to see the
benefits of investments in our proprietary technology platform and our
cross-channel offering, with encouraging growth in both the UK and Spain.

 

Whilst it is a challenging trading environment and we expect this to continue
in the months ahead, we remain committed to delivering Rank's market leading,
exciting and entertaining proposition to our customers.  The Group has a
number of key initiatives underway to improve long term revenues. These
include some key refurbishment projects and new electronic roulette and
jackpot games in Grosvenor; improving the gaming machine offering in Mecca;
increased personalisation and a stronger live casino offering in the UK
digital business and the recent launch of Yo Sports in Spain. The Group has
the benefit of a strong balance sheet, enabling us to continue investing in
the business through this period."

 

 

Forthcoming announcements

Rank will announce its interim results on 26 January 2023.

 

Ends

 

 Contacts:
 Rank
 Sarah Powell - investor relations        Tel: +44 1628 504 303

 Media Enquiries:
 FTI Consulting LLP (PR adviser to Rank)
 Edward Bridges                           Tel: +44 20 3727 1067
 Alex Beagley                             Tel: +44 20 3727 1045

 

 

Notes to editors:

1.     NGR represents Gross Gaming Revenue after customer incentives.

2.     Like-for-like excludes the effects of club closures, club
reopenings and FX.

3.     All comparisons are with the same period in 2021/22.

4.     Q1 is for the period 1 July to 30 September.

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