Pandemic Effect ‘Particularly Hard’ on Rank Group

The Rank Group notes that the effect of the COVID-19 pandemic on the hospitality industry has been ‘particularly hard’ for the organisation, with venue closures and restrictions resulting in a 55 percent decrease in the NGR group for the six-month period to 31 December 2020.

With the group’s facilities losing 45 percent of the working days available, NGR came in at £ 177.6 million during the H1 era (2019: £ 391.8 million), as Rank updates that “our venues remain closed and are likely to remain so for much of Q3 and quite possibly into Q4.”

H1 revenue down 70%

In the first half of the year, company locations, like Grosvenor, Mecca and Enracha, which accounted for 78 percent of Rank sales in H1 2019/20, saw like-for-like revenues reduced by 70 percent.

The resulting effect has consequently seen the underlying operating profit of the company decline from £ 57.7 million in the same period one year earlier to an underlying operating loss of £ 33.2 million in 2020/21.

Looking at NGR through the four major reporting divisions of the group, on a like-for-like digital basis, it increased slightly to hit £ 66 million (2019: £ 65.2 million), Grosvenor fell 78 percent to £ 43.1 million (2019: $ 198.1 million), Mecca dropped 56 percent to £ 38.8 million (2019: £ 88.8 million), and its international facilities decreased 53 percent from £ 19.1 million to £ 9 million.

Digital brands see 10% rise

A 10 percent rise in active customers in UK digital brands helped offset much of the effect of the introduction of restrictions on affordability and “good progress” in the growth of the proprietary technology platform of Stride, with Bella Casino successfully migrating and Mecca and Grosvenor on track for H2 2020/21 and H1 2021/22, respectively.

The chief executive of The Rank Group, John O’Reilly, explained: “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. 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. 

“I have remained incredibly impressed with our teams who have displayed high levels of professionalism and adaptability under the continuously changing circumstances. 

“Despite the difficulties we are facing, they have continued, through a range of initiatives, to help our local communities, front line workers and those who are vulnerable. 

“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. 

“Once we have successfully completed the migrations of Mecca and Grosvenor, our in-house technology and development capability will give us much greater agility and speed in delivering developments, providing the group with a platform for growth both in the UK and internationally.”

In view of its current trading, the company notices an improved performance in its digital business across the UK, as well as “good continuing growth” in the Yo brands. The group’s outlook reflects the good roll-out of the vaccine, and the pace at which hospitality reopens and limits are relaxed, with expectations that by the summer they will be completely reopened.

O’Reilly added: “There continues to be uncertainty looking ahead, particularly as our venues remain closed and we have no firm guidance as to when we will be able to reopen. 

Focused on managing our liquidity position

“We remain focused on managing our liquidity position and, following the successful £70m equity placing in November 2020, combined with the support of our lending banks, I believe we have the balance sheet strength to survive an extended period of closure. 

“We are now focusing on delivering the next stage of our transformation plan and are ready to reopen our venues when the virus is under control and the vaccine roll-out has achieved its purpose.”