Rank Group has announced, in the midst of COVID-19 disturbances, that it is ‘preparing for difficult trading conditions’ as it reopenes its venues.
By releasing a trading update for the quarter to 31 March 2020, Rank’s like-for-like net gaming revenue dropped by 4% for the year, while NGR’s overall revenue rose by 5%. Rank Group has estimated that the underlying annual operating income would be anywhere between £48 million and £58 million, based on the expectation that its sites would remain closed for the remainder of the financial year.
The digital division of the Group saw NGR’s biggest growth, with an rise of 21 percent for the year. Grosvenor Digital NGR grew by 27 percent in Q3, which is said to have been largely ‘driven by continued growth in new players and strong levels of returning players.’
Mecca Digital also had a good performance with NGR up 20 percent, while a number of senior management and organisational changes undertaken during Q2 had a positive effect on the performance of Spanish asset Yo, recording NGR growth of 9 percent during Q3.
Rank announced in its report that their monthly cash outflow during the enforced closures of the coronavirus pandemic will be £10 million a month from May 2020. As a result of the funding steps taken by the HM Treasury, the figure has dropped from the previously expected £17 million a month.
The Group has also benefited from the business rates holiday from about £1 million a month. John O’Reilly, Rank chief executive, commented: “With the tremendous support we have received from HM Treasury and HMRC, together with our own mitigations, we have established a robust financial position to address and withstand an extended period of economic turmoil.
“Given the uncertainty we face and continued social distancing measures likely to be in place for some time to come, we continue to work to protect cash and to prepare for the reopening of our venues in as safe a way as possible.
“I am enormously proud of our colleagues and how they have responded to the decisions we have had to take as well as their selfless response and contribution to the national effort. We know how important our venues are in many local communities and we’ve answered the call to contribute by stepping up to help those who need it most right now.”
Rank Group also confirmed that it had requested HMRC’s repayment of £25,2 million in respect of VAT paid on slot machine revenue between 2002 and 2005 in order to maximise its liquidity, and this was received in early April Mitigating the short-term effects of COVID-19 lockdown, the Group furloughed around 7,000 colleagues out of a UK workforce of 7,600, with all colleagues receiving it.
Issuing a response during the COVID-19 lockdown to the government’s call for contributions, Rank said: “The Rank Group’s Board and our colleagues are conscious of the need to contribute to the wider societal effort at this time of national crisis.
“Our customers know that our venues are community hubs and far more than just places to gamble, and our non-furloughed colleagues have stepped up to ensure we are able to use our venues, wherever and however possible within Government guidelines, to support key workers and vulnerable people in our communities.
“We have launched a new charity initiative in collaboration with Blue Light Card, the UK’s number one discount service for the NHS, Emergency Services, Social Care workers and Armed Forces. Rank colleagues are providing free meals to these key workers from some of our UK venues’ kitchens.
“We are also collaborating with a number of MPs and local councils to ensure whatever capacity we have in our kitchens is maximised to provide vulnerable people, including the homeless and elderly, with hot meals, cooked in Rank venues and distributed by our teams. Our colleagues are also calling our regular Mecca customers to check in on their wellbeing.
“We are acutely aware of the need for heightened vigilance in identifying any signs of gambling-related harm in our digital business, and have redoubled our safer gambling efforts, incorporating the Betting & Gaming Council’s ’10 pledge action plan’ and bolstering resource in our safer gambling teams.”