In a trading update, Rank said group revenue for the three months through to 31 March was £182.3m (€212.8m/$227.4m). Q3 figures are presented on a like-for-like basis.
Land-based Grosvenor venues remain the main source of revenue for Rank, despite showing the least amount of growth. In Q1, Grosvenor venues generated £80.0m in revenue, up 3% on last year.
Rank noted the impact of a 5% rise in visitor numbers during the period, despite Q3 being a seasonally quieter time. On this average weekly net gaming revenue (NGR) increased 2% year-on-year to £6.2m. This figure is on track with Rank’s goal of achieving £7.0m weekly NGR from the Grosvenor venues business.
As for the Mecca bingo venues business, revenue jumped 12% to £37.3m. Again, Rank put this down to a rise in visitor numbers, with this increasing 5% from last year. There was also a 7% jump in spend per visit, as Rank benefitted from “strong” trading over the Mother’s Day and Easter weekends.
In Spain, there was more land-based success for Rank in its Enracha venues division. Here, revenue increased 9% to £10.0m.
Steady digital growth for Rank in Q1
Turning to the digital business, revenue was 6% higher at £55.0m in Q1. UK digital revenue was up 4%, whereas in Spain, revenue increased by 20% year-on-year.
Focusing on the UK, Mecca NGR rose 21% but Grosvenor just 1%. Rank put the latter down to a weaker gaming margin with some big customer wins.
Planned reductions in marketing investment led to a 13% reduction in NGR for other UK digital brands. However, Rank noted the expected impact of a new content management system for both the Mecca and Grosvenor online sites. This went live in Q3 and, Rank says, will improve operational efficiency and speed to market for customer proposition enhancements.
Year-to-date revenue reaches £544.9m
As to how Q3 impacted Rank year-to-date, revenue for the nine months to the end of March hit £544.9m. This is 8% higher than at the same point in the previous year.
Grosvenor venues revenue for this period is 8% higher at £274.5m, with Mecca venues revenue also up 10% to £104.5m. In addition, revenue from the Enracha venues division in Spain climbed 9% to £29.5m.
As for the digital business, revenue increased by 7% to £163.4m for the reporting period.
Looking to the full-year, Rank says performance has continued to improve in April. As such, it expects operating profit for the year ending 30 June to be in line with expectations.
“We continue to make good progress across both our venues and online businesses,” CEO John O’Reilly said. “Q3 trading is very much in line with the board’s expectations.
“Performance continues to improve. We have the very important land-based reforms from the government’s white paper to look forward to, which we hope to start implementing in the coming months.”
O’Reilly recently spoke about how Rank is “well positioned” to benefit from the land-based reforms outlined in the white paper. Rank expects the process to double the number of gaming machines in the Grosvenor Casino estate. Proposals would also allow electronic payments in casinos and bingo venues.
Rank to sell Passion Gaming stake
In other news, Rank has reached an agreement to sell its holding in Passion Gaming, an Indian online rummy business.
Financial terms of the deal were not disclosed, with Rank saying the agreed fee represents a “nominal consideration”. Rank did also not reveal which company is acquiring the stake.
The disposal is expected to complete in the coming weeks.
Original article: https://igamingbusiness.com/finance/quarterly-results/rank-hails-q3-progress-as-revenue-rises/
