Is Covid to Blame for Rank Group Losses of £42M?

Challenging Times Ahead

Bingo and casino games, whether that be online or at a bricks-and-mortar venue are one-in-the same, however, one sector is being hit hard – and with one operator in particular. Rank Group is haemorrhaging losses and is blaming one thing – the current global pandemic. Publishing it’s H1 interim results for six months ending December 2020, Rank Group revealed they took a hit of £42m, which is some 171% lower than the profits from the same period last year.

The closure of venues is to blame with nobody out spending, losses are guaranteed and not just with Rank either. The report revealed of the operating days during that 6-month period, the doors were closed 56% of the time, resulting in a drop in group revenues of 58% to £157million, which may seem like an awful lot, but when compared to the same time last year, those profits were £371million!

No Dab and No Grab

Despite the gloomy report, Rank who owns Mecca Bingo and Grosvenor land-based venues remains optimistic for the future. But the statistics reveal a worrying trend. When compared to the same period last year, the popular bingo brand delivered operating losses of £21million which is down some 143% and Grosvenor, the lavish entertainment establishment recorded losses of £5.2million, down 137%.

“There is no doubt that the impact of the COVID-19 pandemic has been far beyond anything we or any other leisure operator could have imagined or planned for,” said John O’Reilly, Chief Executive of Rank Group Plc. “The ever-changing restrictions coupled with curfews, which in particular have a seismic impact on our Grosvenor venues, have resulted in an exceptionally challenging first half for the Group.”

Stats are strange things because, despite all those losses, Rank has recorded a 10% growth in active online players– this figure has been calculated across its UK wide portfolio: from slots players to those looking for bingo entertainment. How could player numbers be up but profits down? Aside from all venues shut across the UK, other factors are contributing to this decline in revenue too, including affordability assessments and responsible gambling commitments.

O’Reilly continued: “We have taken a stringent approach in applying affordability restrictions, particularly on higher staking customers, which has impacted revenues in our UK facing digital business in the half. We have been making good progress in the development of our proprietary technology platform to prepare the digital business for its exciting future.”

However exciting the future may be…

…it is one of uncertainty across the board and with no firm guidance on when things could or should get back to normal, it’s just a waiting game for operators such as Rank.

Source: “Rank Group Records £42M Interim Loss as Covid Drains Venue Performance”. SBC News. January 28, 2021.