Rank Group mulls share rights issue as UK struggles continue

Rank Group is in discussions over a possible equity issue as the UK casino operator looks to strengthen its balance sheet amid Covid-19. The London-listed operator could potentially move to mitigate the damaging financial impact of a new month-long UK lockdown which began on 5 November. “The board continuously reviews the group’s financial position and confirms it is in discussions with its advisers regarding a potential equity issuance of up to a maximum of 19.9% of its issued share capital,” Rank Group said in a statement. “Such an equity issuance would be intended to strengthen Rank’s balance sheet in this unprecedented trading environment. There can be no certainty that the equity issuance will proceed,” Rank added. Earlier this week, Sky News claimed the Grosvenor Casinos operator would look to raise up to 20% of its market value from a fast-track placing of shares, resulting in more than £70m in funds being generated for the business. If realised, these funds would add to the £25m generated by the sale of Rank Group’s sole remaining Belgian casino business to Kindred Group as reported in October. However, there have been rumours of dissention among Rank Group shareholders, with Sky also reporting that city investors in the business are set to protest the group’s remuneration structure and future pay policy at an AGM on Wednesday 11 November. Rank Group has widely opposed Covid-19 restrictions introduced by the UK government, which it had previously claimed were an “aggressive and needless attack” on the UK land-based casino sector. The operator has cited numerous government visits to its land-based casinos which have all resulted in positive feedback on the measures introduced, including sneeze screens and social distancing. In its full-year financial results, Rank Group reported a 15% downturn in net gaming revenue (NGR) to £585m, as well as a 32% decline in underlying operating profits. Venues based NGR dropped by more than 20% with reduced footfall over the Covid-19 period. This was offset by a 23% rise in digital division NGR over the same period, as customers switched online following venue closures.