(Alliance News) - Rank Group PLC on Thursday posted a swing to annual loss as the casino operator's venues faced strict Covid-19 lockdown measures for more than half its trading days.
Rank shares were 4.5% lower at 175.00 pence each in London on Thursday morning.
The Grosvenor Casinos and Mecca owner said that without including government support schemes, it made monthly cash losses of GBP15.0 million during periods of closure.
Revenue in the year ended June 30 fell 48% to GBP329.6 million from GBP629.7 million. Rank swung to a pretax loss of GBP107.3 million, from a GBP13.4 million profit.
Covid-19 closures meant its venues businesses, where more than three-quarters of its revenue is derived from, was closed for 59% of available operating days. It also said capacity constraints and reduced opening hours further held back revenue in the period.
The closing stretch of the previous financial year was also hit by closures, so it has been some time since Rank has a had a year free of Covid-19 hurt. In the year ended June 2019, Rank posted pretax profit of GBP34.6 million on statutory revenue of GBP695.1 million.
Rank decided against a payout, after a 2.80p per share dividend in the previous financial year.
Chief Executive John O'Reilly said: "The year to June 30 was exceptionally challenging for the group and, frankly, we are delighted it is over.
"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."
The company also faced regulatory hurt, which particularly hit its digital arm. Under guidance from the UK Gambling Commission, Rank introduced affordability checks towards the end of the last financial year, meaning customers had to provide a source of income.
For some punters, this was an "intrusion into their privacy" and instead opted to stake elsewhere, Rank explained.
The company added: "In online gaming businesses, the inevitable outcome is that players who win can continue to play, largely free from intrusion, if they do not show any markers of harm to suggest they may be playing irresponsibly. However, customers who play and lose are quickly restricted unless they can provide proof of income to support their level of expenditure. Throughout the year, improvement to affordability journeys on site and through customer relationship management programmes have worked to reduce, but certainly not remove, the level of friction on customers.
"As the Mecca and Grosvenor brands migrate onto the proprietary technology platform in 2021/22, significant additional improvements will be delivered through automated journeys, further smoothing the impact of affordability checks."
Digital net gaming revenue fell 6.2% to GBP136.3 million from GBP145.3 million.
Rank's fortunes in its venues have improved since its estate reopened, though revenue is still below pre-virus levels.
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, "comfortably 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.
"Average weekly revenue has been GBP2.6 million, slightly ahead of our breakeven level of GBP2.4 million," the company added on Mecca.
In Spain, the FTSE 250 company owns the Enracha casino brand. Activity has picked up since Covid-19 restrictions are being relaxed.
"Customer demand is strong despite the restrictions, and we are trading profitably," Rank said.
By Eric Cunha; ericcunha@alliancenews.com
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Rank (RNK)