Rank Group agrees new £25m revolving credit facility

Rank Group has agreed a new two-year £25m Revolving Credit Facility (RCF) with Lloyds Bank. The new credit facility runs in parallel to Rank’s existing £55m RCF and the firm’s remaining term loan, which amounts to £108.4m. It has been confirmed that the new RCF is subject to the same financial covenant waiver and associated conditions, including a quarterly minimum £50m cash and available facilities test, that are in place across the group’s other bank facility agreements. “The facility provides the group with additional liquidity and the opportunity, when we are confident that the group is delivering sustainable positive cashflows, to accelerate investment in the group’s transformation plan,” Rank said in a statement. Peel Hunt analyst Ivor Jones described the signing of the new agreement as an “encouraging sign of confidence” in the business, coming amid continued financial struggles arising from the Covid-19 pandemic. In its latest set of financial results, Rank revealed a 72% year-on-year fall in NGR, punctuated by a 98% drop in retail revenue due to closures across its Grosvenor Casinos and Mecca Bingo business as part of UK-wide lockdown. “Management notes that the facility provides additional liquidity but also, at the right time, the capacity to accelerate investment in the group’s transformation plan,” Jones wrote. “Covid-19 interrupted Rank’s plans to upgrade its services and to make them more relevant to more consumers. “Today’s announcement makes it clear that management is getting ready to put Covid-19 behind it,” he added. The agreement of the new RCF is the second major financial windfall for the firm in the space of a month after the UK’s First-tier Tax Tribunal ruled in favour of Rank over refunded VAT on slot machine income between 2006 and 2013. The ruling grants the firm a refund which could be as high as £80m.