Rank Group net revenue plunges 50% as challenging year hits digital arm

Rank Group has announced a 50% year-on-year (YoY) decline in its full-year net gaming revenue (NGR) to £282.2m for the 2020/21 financial year. The Maidenhead-based venues and digital business also revealed a 6% YoY fall in revenue generated from its digital business to £136.3m. Declining digital revenue, Rank confirmed, was primarily due to the “stringent application” of affordability measures across its online brands, and the impact of venue-based closures on the group’s omni-channel operations. In addition to the impact of these affordability measures, Rank disclosed that the migration of its Mecca brand to the new RIDE platform has been postponed to Q3 2021/22, with performance testing currently underway. Qualifying its postponement, Rank said this was to ensure further improvements could be made to affordability systems and to ensure reduced customer friction while onboarding. Further development will also be required on the migration of its other main brand, Grosvenor, which is expected to complete in Q4 2021/22. Once completed, its new in-house platform will allow for the realisation of remaining cost savings from the Stride acquisition of £6.8m per annum. “It will free up significant levels of development capability for the next key priorities in the transformation of the UK-facing digital business,” Rank said. “These include improvements in MarTech, in data analytics to drive personalisation of CRM and on-site communication, in product and service developments as well as in continued enhancements to our safer gambling control environment,” the company added. The operator has committed to “significant” further investment in its safer gambling initiatives, confirming the rollout of its real-time customer monitoring tool, known as Hawkeye, across its digital brands. Rank Group’s Spain-facing Yo Bingo and Yo Casino brands enjoyed like-for-like NGR growth of 30% YoY in 2020/21 to £20m, while its Enracha business reported a YoY revenue uptick of 10%. However, the firm cited the introduction of a ban on bonuses and incentives to new customers in Spain as having the “inevitable effect” of reducing new customer volumes, something which Rank has said it will continue to evaluate going forward. Rank’s venues-based business, which accounts for 79% of total NGR, saw NGR fall 65% to £151.9m during 2020/21, due to the closure of its UK and international casinos as part of Covid-19 lockdown measures. The company confirmed a net monthly loss of £15m for each month of venues-based closures during the pandemic, despite the firm receiving support through the government’s furlough scheme and business rates relief. Underlying net profits slumped 238% YoY from a 2019/20 positive figure of £48.4m to a negative loss of £67m in 2020/21, while available cash to the business dropped 22% YoY to £98m. Addressing Rank’s “exceptionally challenging” 2020/21 financial year, CEO John O’Reilly said there is light at the end of the tunnel for the firm with the relaxation of Covid-19 restrictions. “We are now well into a new financial year with our venues open and trading positively. Good progress is being made in our digital businesses and there is a renewed sense of confidence as we focus on the growth initiatives within our clearly defined transformation programme,” O’Reilly explained. Referencing the stuttering digital migration plans, O’Reilly suggested it had been a “year of transition” for the UK-facing digital business. “Revenue has disappointed, but we have been making good progress with the development of our proprietary technology platform and we will complete the migration of the Rank brands during 2021/22,” the CEO explained. “This will free up development capability to enable much greater agility and speed to market for new and enhanced products, services and digital customer experiences,” O’Reilly added. Rank Group shares were down 3.6% in early trading on the London Stock Exchange to 177p.