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(Alliance News) - Rank Group's net gaming revenue slumped badly due to Covid-19 restrictions, leading to a loss in a year that the casino operator said on Thursday it is glad is over.
In the 12 months that ended June 30, Rank fell to a pretax loss of GBP72.0 million compared to a GBP9.4 million profit the year before.
Net gaming revenue dropped 48% to GBP329.6 million from GBP629.7 million.
"The year to June 30 was exceptionally challenging for the group and, frankly, we are delighted it is over," Chief Executive John O'Reilly said.
Rank noted 79% of its revenue is derived from its venues businesses, so closures imposed by UK government's response to the virus pandemic amounted to 59% of available operating days being shut. It also said capacity constraints and reduced opening hours further held back revenue in the period.
O'Reilly continued: "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.
"Rank was delivering strong revenue and profit growth before the pandemic and the steps we have taken over the last 18 months, particularly in carefully managing our liquidity and developing the transformation plans, will enable the group to return to that growth trajectory as the impact of the pandemic reduces and consumer confidence for indoor leisure experiences grows."
In Rank's Grosvenor brand venues, like-for-like net gaming revenue from reopening on May 17 to August 15 was down 19% on the same 13-week pre-pandemic period in 2019. Average weekly revenue since reopening has been GBP5.7 million, ahead of the company's breakeven of GBP4.4 million per week.
Rank's Mecca brand has seen a "slightly slower" recovery, with like-for-like revenue down 21% in the 13-week period.
Rank shares were down 5.0% early Thursday.
The London market opened lower after minutes from the most recent US Federal Reserve meeting showed policymakers expect tapering of stimulus to occur as soon as this year.
Here is what you need to know at the open:
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MARKETS
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FTSE 100: down 1.9% at 7,036.17
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Hang Seng: down 2.5% at 25,226.47
Nikkei 225: closed down 1.1% at 27,281.17
DJIA: closed down 382.59 points, or 1.1%, at 34,960.69
S&P 500: closed down 47.81 points, or 1.1%, at 4,400.27
Nasdaq Composite: closed down 130.27 points, or 0.9%, at 14,525.91
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EUR: down at USD1.1677 (USD1.1705)
GBP: down at USD1.3702 (USD1.3750)
USD: firm at JPY109.95 (JPY109.92)
Gold: up at USD1,780.90 per ounce (USD1,779.25)
Oil (Brent): down at USD67.07 a barrel (USD68.75)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
1000 CEST EU balance of payments
0830 EDT US Philadelphia Fed business outlook survey
0830 EDT US jobless claims
1000 EDT US advance quarterly services
1000 EDT US leading indicators
1030 EDT US EIA weekly natural gas storage report
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New Zealand reported a breakthrough Thursday in tracing the source of a Covid-19 outbreak that plunged the nation into lockdown, with Prime Minister Jacinda Ardern saying it should help "stamp out" the virus. Health officials have been trying to determine how an Auckland man contracted the coronavirus this week, ending a six-month run of no community cases in New Zealand. Tests showed the man had a version of the Delta strain found in Australia, and Ardern said investigations narrowed down the origin to a person who arrived from Sydney on August 7. She said the traveller had been in quarantine and hospital since touching down, indicating the virus had not been in the community as long as initially feared.
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BROKER RATING CHANGES
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JPMORGAN RAISES WEIR GROUP TO 'OVERWEIGHT' (NEUTRAL) - PRICE TARGET 1,970 (1,800) PENCE
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COMPANIES - FTSE 100
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Chilean miner Antofagasta's first half revenue surged on the back of strong copper demand and multi-year high prices, but it lowered its production guidance for the rest of the year. In the six months to June 30, pretax profit spiked to USD1.78 billion from USD387.5 million a year before. Revenue surged 68% year on year to USD3.59 billion from USD2.14 billion. Copper sales volume slipped 6.3% to 325,100 tonnes, and gold sales fell 4.3% to 103,700 ounces, but the firm's realised copper price jumped 80% to USD4.42 per pound while the gold price increased to USD1,776 per ounce from USD1,680 a year before. As a result, Anto's cash flow from operations grew to USD2.46 billion from USD906.9 million, allowing the miner to declare a dividend of 23.6 US cents, up from 6.2 cents a year before. Anto noted the driest year of a 12-year drought in Chile will hurt production in the second half. The miner lowered its full-year outlook for copper production to be between 710,000 to 740,000 tonnes versus previous guidance of 730,000 to 760,000.
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Lloyds Banking has set a target of buying 50,000 homes in the next 10 years as it moves into the private rental market, the Financial Times reported. The bank set a "strategic challenge" of buying 10,000 properties by the end of 2025, then 50,000 by 2030, the FT said, citing an internal job advertisement. Last month, Lloyds announced the plan to start renting out housing under the Citra Living brand. The advert estimates that Citra would have a balance sheet worth GBP4 billion and generate GBP300 million in pretax profit with 10,000 homes. It said Citra may consider mergers and acquisitions or strategic alliances to reach the targets. The UK's largest private residential landlord is Grainger, with 9,000 homes.
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Moody's Investors Service late Wednesday placed cybersecurity firm Avast's Ba1 credit rating under review for a downgrade over its planned takeover by a US rival. Tempe, Arizona-based NortonLifeLock is buying Avast for about USD8.6 billion in cash and stock. The deal will be financed with USD5.4 billion of debt, excluding the short-term bridge loan. The credit agency said that the review would focus on the financial arrangements following the transaction as well as its successful closing, including the necessary regulatory approvals. Late Tuesday, Moody's had placed NortonLifeLock's Ba2 rating under review for a downgrade, giving the reason that execution risks are high "given the transformative nature" of the acquisition, while the targeted synergies are large, the ratings agency said. It estimates NortonLifeLock's debt will be around 5.5 times earnings before interest, tax, depreciation and amortisation when the deal completes in the middle of next year.
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COMPANIES - FTSE 250
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Landscaping products firm Marshalls said its trading continues to improve and recent order intake has been "good". The company swung to a first-half pretax profit of GBP38.9 million from a GBP16.0 million loss a year before, as revenue in the six months to June 30 grew to GBP298.1 million from GBP210.5 million, as well as topped 2019's first half revenue figure of GBP280.1 million. Marshalls declared an interim dividend of 4.70 pence, in line with 2019 after withholding its shareholder payout last year. The company raised its outlook for 2021 and 2022. Chief Executive Martyn Coffey said: "The Construction Products Association's recent summer forecast predicts year-on-year increases in UK market volumes of 14% in 2021 and 6.3% in 2022, and the group expects to meet or outperform the market. Market conditions remain supportive, despite certain supply chain challenges, which are leading to inflationary pressures across the sector."
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COMPANIES - GLOBAL
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Two doses of the Pfizer-BioNTech vaccine appears to have greater effectiveness initially against new Covid-19 infections associated with the Delta variant when compared to the Oxford University-AstraZeneca jab, but its efficacy also declines faster, preliminary research suggests. Scientists from the University of Oxford have said that after four to five months, the level of protection offered by both vaccines is similar, with the AstraZeneca jab maintaining its effectiveness throughout the duration. The findings, which have not yet been peer reviewed, also suggest that those infected with the Delta variant after their second jab had similar peak levels of virus to unvaccinated people. Based on their work, the researchers said that although jabs did not eliminate chances of getting Covid-19, they did reduce the risk and remained the most effective way to ensure protection against the Delta variant – which has become dominant in the UK.
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Thursday's Shareholder Meetings
Calnex Solutions PLC - AGM
Castings PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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