Rank Group digital revenue rises 17% as operator reveals bingo reopening schedule

Rank Group has revealed digital revenue rose by 17% year-on-year during Q4 as the operator confirmed the reopening of its UK bingo halls business.

Updating shareholders, the London-listed operator confirmed underlying operating profit for the year ended 30 June 2020 is expected to be at the lower end of previous estimates of £48m-£58m after IFRS16 (£40m to £50m pre-IFRS16).

The 17% uptick in pro forma digital revenue was achieved despite increased investment in the acquired Stride Gaming business to improve its safer gambling and customer due diligence measures. Rank has cited expenses incurred as a result of reopening its Mecca venues business as the reason for the lower operating profits. However, monthly net cash outflow remained in line with previous estimates, with the group operating a £140m cash and banking facilities as of 1 July.

“With the reopening of Mecca, we expect the monthly cash outflow to be reduced from approximately £10m per month to £7m per month, and to be cashflow positive upon the reopening of Grosvenor,” Rank said in a trading update.

The group also revealed a 40% revenue hit from the Covid-19 venues shutdown based on current estimates.

Rank confirmed that 35 of its Mecca Bingo venues across England will open from 4 July, with a further 30 scheduled to reopen in a “phased approach” during July and August.

Welsh and Scottish bingo halls will be included based on those devolved administrations further relaxing lockdown measures. Rank’s remaining 12 Mecca bingo venues will remain closed until October, while the group assesses its “ongoing viability”.

“Some restructuring of the cost base and format of these venues is likely to be necessary to allow them to reopen, including renegotiation of rents,” Rank said.

As part of the reopening, extensive social distancing measures will be enforced including colleague-controlled entry and exit, reconfigured service points to account for social distancing and frequent and extensive cleaning of all surfaces.

In addition, hand sanitiser will be provided to all patrons on entry and throughout the venues.

Rank Group CEO John O’Reilly welcomed the reopening of the Mecca Bingo business as it will allow the firm to return to a degree of normality.

“As ever, the health, safety and wellbeing of all our customers and colleagues remains front and centre of everything that we do, and we have created safe environments for our customers to come and enjoy themselves once again,” said O’Reilly.

“Our Grosvenor venues are also ready to safely open and we are working hard to ensure we receive the support of government to reopen our casinos soon. Our colleagues are very keen to get back to work to pick up the progress we had been making prior to lockdown,” he said.

Last week, O’Reilly added his support to the Betting and Gaming Council’s prior call for the UK government to allow casino businesses to reopen following the relaxation of Covid-19 lockdown measures.

The Rank Group CEO revealed the group was burning through £10m in cash every month due to the closure of the venues business.