REG - Rank Group PLC - Trading Statement

RankAnnouncement

16/12/2022 07:00

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RNS Number : 9193J  Rank Group PLC  16 December 2022

Trading statement

The Rank Group Plc

LEI: 213800TXKD6XZWOFTE12

16 December 2022

The Rank Group Plc (LSE: RNK) (Rank or the Group) provides an overview of
trading performance for the five months to 30 November 2022 and an update on
its profit expectations for the year ending 30 June 2023.

Group LFL NGR for the five months to 30 November 2022 was up 1% compared to
the same period in the prior year, with LFL NGR growth in Mecca venues,
Enracha venues and Digital offset by a decline in Grosvenor venues.

Whilst there has been some improvement in Grosvenor's trading over the last
few weeks, trading in Q2 has been weaker than expected, with weekly average
NGR of £5.8m being only marginally ahead of the levels seen in Q1.  We had
expected Grosvenor venues to have continued to improve throughout Q2 and then
into the second half of the year, but this improvement has not yet
materialised, driven by lower customer spend per visit.

In the first five months of the year, Mecca customer visits numbers were up 4%
on the prior year, with Q2 weekly average NGR in line with Q1.  There has
been a recent weakening in weekly average NGR due to lower visit numbers,
impacted by the World Cup and colder weather, as well as the ongoing cost of
living pressure on consumers.

Enracha venues continued to perform strongly with NGR up 27% as investments
into electronic product continue to deliver strong returns.

Rank's Digital business continued to deliver good growth.  NGR was up 11%,
with UK up 10%, following the successful migration of Grosvenor onto our
proprietary technology platform, and International up 13% driven by continued
growth in YoBingo and the launch of YoSports in October 2022.

Outlook

Grosvenor venues have shown signs of improvement in recent weeks and there are
robust plans in place to drive revenues, however the return to growth will
take longer than previously expected due to the current challenging
macro-economic backdrop.

Year-to-date performance in our Mecca venues also creates a level of downside
risk to the full year outturn for FY23.

We expect our Enracha venues to continue to perform strongly for the remainder
of FY23, with our Spanish customers being less impacted by cost of living
pressures.

Our Digital business continues to focus on delivering its roadmap of
enhancements centred around providing a richer live casino gaming experience
and a more personalised and engaging online bingo offer.

Total known cost increases for the year remain broadly in line with our
expectations at approximately £50m driven by wage inflation, energy
inflation, other price increases and COVID-19 related Government support
received in FY22.

We now expect Group LFL underlying operating profit for the year ending 30
June 2023 to be in the range of £10m to £20m, with the main variable being
the performance of Grosvenor venues.  Due to the high operating leverage
within Grosvenor, and its relative importance to the Group as a whole,
movements in its NGR will have a significant impact on the Group's operating
profit for the year.

John O'Reilly, Chief Executive, said:

"Weak consumer confidence and pressure on disposable income is resulting in a
tougher than expected trading environment for our UK venues businesses,
particularly in Grosvenor where we are seeing customers spending less per
visit.

"Whilst we expect these challenges to continue to impact our recovery into the
second half of the financial year, we have implemented a series of measures to
deliver incremental cost savings and to drive revenues.

"We remain committed to our roadmap of investing in initiatives that will
ensure the long-term recovery and prosperity of the Group. These include
delivering new products in our UK venues, enhancements to the design and
facilities of some of our casinos and upgrades to the table gaming and
electronic offering. Our digital team is now fully focused on delivering the
improvements available to our UK and Spanish business following the successful
migration of all our brands onto our proprietary platforms."

Forthcoming announcements

Rank will announce its 2022/23 interim results on 26 January 2023.

During H1 2022/23, the Group undertook a review of the Group's Central Costs
and has concluded it is appropriate that a proportion of Central Costs should
be allocated to each of its operating business units.  As a consequence, the
upcoming 2022/23 interim statement will outline the Central Costs allocated to
each business unit and the operating profit per business unit before and after
Central Cost allocations.  To aid comparisons, H1 2021/22 operating profit
for each business unit will be restated accordingly and disclosed in the
2022/23 interim statement.

Ends

Contacts:

 

Investors

Rank

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

 

Media Enquiries

Rank

David Williams - public affairs                     Tel:
+44 1628 504 303

 

FTI Consulting LLP (PR adviser to Rank)

Edward Bridges
 
Tel: +44 7768 216607

Fiona
Walker
Tel: +44 7870 160180

Information contained within this announcement is deemed to constitute inside
information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

 

Notes to editors:

1.     Net Gaming Revenue ('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.

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