Q&A: Henry Birch, Rank Group chief executive

Despite reporting an 11% increase in full-year digital revenues, The Rank Group’s online business was not exactly firing on all cylinders during its 2015-16 financial year. The operator’s CEO, Henry Birch, was left particularly frustrated by Mecca Bingo’s lacklusture performance which – largely due to problems from its migration to the Bede Gaming platform – recorded only a small revenue rise from £65.2m to £66.2m.

Grosvenor Casinos, on the other hand, announced a very different set of results. The migration to the Bede platform actually benefited Rank’s casino brand and Grosvenor was the standout performer during the 12-month period, with revenues soaring 36.8% year-on-year.

eGaming Review spoke to Birch following the release of the operator’s full-year results to find out how Rank aims to turnaround Mecca’s online performance and how it plans to build on Grosvenor’s current success.

eGaming Review (EGR): How would you sum up Rank’s performance during the previous financial year?

Henry Birch (HB): Clearly Grosvenor has been really positive but with Mecca, although our revenues are up 2%, it is below where we want and expect to be. I’ll be candid with you, part of that is to do with the stability issues we had with our platform migration. You’ll know from covering the industry that this is nothing new; quite often when you do these migrations you see a blip in the short-term. I think what it’s done is blown us five or six months off course with Mecca Digital, such that we haven’t been able to add in the content and functionality we had planned.

So what should have been an uplift in the last six months will happen in the next six months. When we look at it I think we’ve got a very clear plan and series of actions over the next few months which we are very confident will see Mecca going back into the growth we expected.

EGR: Do you feel you now have a more competitive online bingo product?

HB: From where we are now we haven’t really used all the content and functionality that we will have in a few months’ time. I guess the next four or five months will see us getting to competitor parity and then next year we will have some features and abilities that others won’t have. I’m pretty confident we are going to see some growth in this financial year.

EGR: What do you put Grosvenor’s growth down to?

HB: The platform switch has really helped; we’ve got a really good team at Grosvenor and we’ve been very focused. It has helped the proximity and the strength of the retail business moving into digital, but I think we’ve also got a strong offer and good brand recognition there as well. Grosvenor didn’t have the stability issues Mecca had with the new platform and they’ve really been able to take advantage of the platform and shown what it’s capable of.

EGR: How has sports betting performed so far?

HB: What we haven’t yet done with the sportsbook is promote it too much because it just had a soft launch. It hasn’t been plugged into the Bede back-end, so we haven’t had that single view of the customer or done any bonusing on it yet. However, it actually performed pretty well over the Euros, which was a test and learn period, and we put out some fairly aggressive offers during the tournament. So within the next few months you should start to see that coming through.

EGR: How are you going to position the sportsbook in such a competitive market?

HB: We’re not going to try and go head-to-head with William Hill or Ladbrokes; it’s more for internal purposes. We know that our existing digital customers bet on sport and we know from customer research that our retail customers – two million who go into our casinos every year – 54% of them bet online somewhere. We just want to be able to satisfy that demand and be able to add a broad, rounded-out product offer with a better poker option and our core casino product as well.

EGR: Are you starting to see the benefits of your multi-channel and single wallet strategy?

HB: With regards to single wallet, what we’ve put it in place we won’t necessarily see the benefit yet, but what we find is that we do get a large number of customers in our digital businesses come from retail. I don’t know the number off hand but it’s something like 60% of our digital customers on Grosvenor are customers who come directly from our clubs. This means we have a much lower CPA and when you look at what happens next year with the RGD and the point of consumption tax being applied to gross revenues, including bonuses, it will be to our benefit.

EGR: How did your digital membership trial work out and do you have plans to roll it out permanently?

HB: These days if I had a choice of leaving my house with either my phone or wallet, I would choose my phone. The whole idea of getting loads of cards out of your wallet is increasingly less appealing. We’re just recognising that we move with technology and consumer demand, and much like people would now rather download a boarding card on to their smartphone than print one out and take it to the airport, I think people would rather swipe in with their phone than get out a plastic membership card.

When we talk about multi-channel and digital, there seems to be this perception that the retail environment doesn’t change. But one of the things we are trying to do is put more technology into our retail clubs and more connected devices so that there is more of a blurring of the lines between retail and digital and I think this will continue. If you are playing on a network slot machine, is that massively different from playing on a network smartphone or laptop?

EGR: What is your cross-sell strategy and what does your data tell you about these players?

HB: We’ve made a considerable investment over the last year in terms of our data analytics team and platform which is months away from going live. It will give us much greater fire power in terms of the cross-sell and analytics. But given that we’ve just launched our sports betting platform and that we’ve upgraded our poker product, we don’t have cross-sell data that we would share yet and the data we do have would probably be unrepresentative of the potential we see.