Mecca digital struggles hit Rank revenues

Digital revenues from Rank Group’s key brand Mecca fell 8% during the 19-week period ended 11 May as the operator continued to struggle in the “highly competitive digital bingo market”.

The fall in Mecca’s online revenues in the period meant its year-to-date performance was down 5% with Rank’s financial year coming to an end of 30 June.

Rank’s Grosvenor Casino brand fared better after its online division posted a 54% increase in revenues over the period ““ a 42% rise across the year ““ due to an increased conversion of land-based customers.

However, with the growth coming from a relatively small base, Grosvenor was unable to offset declines in other areas of the business which contributed to an overall 1% like-for-like decline ““ a fall of 4% for the year-to-date.

The results come just a matter of days after Henry Birch succeeded Ian Burke as Rank’s new CEO with the former William Hill Online chief executive widely expected to focus on the Group’s online division.

Speaking during an analyst call following the results announcement, Birch said he was “confident” about Rank’s digital prospects and he ruled out any suggestions of imminent M&A activity.

“I’m only eight days into the job but I think there are things we could do to improve our platform and product,” Birch said.

“I’m confident about the future and our ability to leverage the retail business and return online to growth.

“Talk of acquisitions is a bit premature but as a company we could never rule that out in the longer-term,” he added.

In March, the UK government halved the tax on land-based bingo from 20% to 10% and Rank said it remained committed to reinvest the money back into the business.

How it will go about that is still unclear although Birch said he would offer “more detail on where we’ll be heading as a company” following its prelims in August or September.

Rank’s share price remained unchanged at 160.7p after early morning trading.