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17 Oct 2013 07:00
17 October 2013
The Rank Group Plc interim management statement
for the 15 weeks to 13 October 2013
(all comparisons are with the equivalent periods in 2012)
The Rank Group Plc ('Rank' or the 'Group') announces its interim management statement for the 15 weeks to 13 October 2013.
Group and brand revenue to 13 October 2013 | ||
Like-for-like | Total | |
Grosvenor Casinos | (7)% | 35% |
Mecca | (7)% | (2)% |
Enracha | 4% | 4% |
Group | (7)% | 15% |
· Figures not adjusted for free bets, promotions and customer bonuses.
· Total excludes the performance of the acquired casinos prior to their acquisition on 12 May 2013.
· Like-for-like includes the Group's estimate of the acquired casinos performance pre acquisition and excludes the effects of clubs openings, closures, relocations and the impact of Machine Games Duty (MGD).
· Enracha performance is not adjusted for currency movement.
In the 15 weeks to 13 October 2013 the Group experienced a 7% decline in like-for-like revenues caused by the exceptionally hot weather in July adversely affecting customer visits across our venues, a lower casino win margin in London and a disappointing performance in Mecca's venues and digital channel.
However, the acquired casinos have performed well and integration has been completed without issue. Total Group revenues increased by 15% as a result of the continuing contribution from the 19 recently acquired casinos.
As a result of the disappointing start to the year management is taking both revenue improvement and cost reduction actions to mitigate the impact of the revenue decline, particularly in the Mecca brand. The impact of these actions is expected to commence in the second half of the financial year.
Accordingly the Board anticipates operating profit for the full year to be marginally below market expectations. However, the Board expects the first half of the financial year to be materially below that reported in the corresponding period last year with a stronger second half as the benefits of management actions and the impact of our current capital investment programme in the 19 acquired casinos flow through.
Grosvenor Casinos
Brand revenue to 13 October 2013 | ||
Like-for-like | Total | |
Venues based - Customer visits | (6)% | 32% |
Venues based - Spend per visit | (2)% | 3% |
Venues revenue | (8)% | 35% |
Digital revenue | 19% | 19% |
Total revenue | (7)% | 35% |
Like-for-like revenue in the 15-weeks declined by 7%, whereas total revenue increased by 35% as a result of the 19 acquired casinos.
Venues were adversely impacted by the July hot weather and a lower than normal win margin in London; this contributed to a 6% fall in customer visits and a 8% fall in like-for-like venues revenue in the 15-week period. Total venues revenue increased by 35%.
Like-for-like spend per visit fell by 2% in the 15-week period due to the lower than normal win margin in London, driven by major player activity.
During the 15-week period the 19 casinos acquired in May 2013 have performed well. The acquired casinos have been integrated without issue and we are progressing with the capital improvement programmes. The installation of new gaming product has commenced and will be completed by end of Q1 2014. The refurbishment of the Leicester and London Tottenham Court Road casinos is underway and will be completed by Christmas 2013.
Digital revenue continued to grow in the 15-week period, up 19%, however the rate of growth has slowed due to the competitive environment.
Mecca
Brand revenue to 13 October 2013 | ||
Like-for-like | Total | |
Venues based - Customer visits | (11)% | (11)% |
Venues based - Spend per visit | 4% | 10% |
Venues revenue | (7)% | (2)% |
Digital revenue | (3)% | (3)% |
Total revenue | (7)% | (2)% |
In the 15-week period like-for-like and total brand revenue declined by 7% and 2% respectively.
Venues like-for-like and total revenue declined by 7% and 2% respectively as customer visits were adversely impacted by the July hot weather, combined with a fall in the customer base and the continuing decline in visit frequency.
Despite an increase in digital spend per visit, digital revenues in the 15-week period fell by 3% with an increasingly competitive digital bingo market adversely impacting the effectiveness of our marketing and customer acquisition campaigns.
Additionally, following the disposal of Blue Square Bet, the allocation of shared service costs to Mecca's digital channel has increased. A review of the shared service costs for both digital channels is underway and we anticipate reductions during the second half of the financial year.
Ends
Conference Call
A conference call for investors and analysts will be held at 8am (London time) on Thursday, 17 October 2013. Dial in information follows below:
UK (free call): 0800 694 0257
USA (free call): 18 66 966 9439
International: +44 (0)1452 555 566
Passcode: 86068831
A replay of the conference call will be available from the Rank Group's website (www.rank.com).
Contacts:
RankSarah Powell - investor relations | Tel: +44 1628 504 303
|
Media Enquiries:
FTI Consulting (PR adviser to Rank) Edward Bridges | Tel: +44 20 7269 7147
|
Notes to editors:
1. About The Rank Group Plc
The Rank Group Plc is a leading European gaming and betting business, based in the UK and listed on the London Stock Exchange (RNK.L). Its principal activities are the operation of casinos and bingo clubs with complementary digital gaming.
Rank's operations comprise:
· Grosvenor Casinos - 55 casinos in Great Britain; two casinos in Belgium; online and mobile offering via grosvenorcasinos.com
· Mecca - 97 bingo clubs in Great Britain; online and mobile offering via meccabingo.com
· Enracha - 11 bingo clubs in Spain; online offering via enracha.es
For more information about The Rank Group, visit www.rank.com.
2. Acquisition of the former Gala casinos
On 12 May 2013, Rank completed its acquisition of 19 casinos and 3 non-trading licences from Gala Coral Group Limited ("Gala"). The trading performance of the acquired casinos has been shown within Grosvenor Casinos.
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