T
he Rank Group announced Thursday its preliminary results for the 12 months ended 30 June 2020.
According to the company, its strong pre-COVID-19 results demonstrate the efficacy of its new strategy and the actions taken to address the coronavirus impact position Rank well for recovery.
“With positive momentum from the transformation program, Rank performed very strongly during the first part of the year and into the second half. Despite continued good growth in our digital brands, with our venues closed from mid-March, the impact of the COVID-19 pandemic on the Group has been significant. However, with the huge commitment and dedication of our colleagues, very tight cost control across the business and the support we have received from Government, we have carefully navigated the past few months and are now beginning to successfully emerge. We know the recovery will take time, but the underlying strength of our business provides us with confidence that we are well equipped to return to full strength,” said John O’Reilly, Chief Executive of The Rank Group.
“We’ve been encouraged by the first few weeks of trading following reopening and whilst the supplyside constraints, including social distancing and changes to the way we operate table gaming, are going to be challenging over the coming months, the response from customers to the extensive safety measures we have in place has been very positive,” he continued.
“The need to deliver on Rank’s long-standing promise to excite and to entertain our customers has never been more important. The post-lockdown expectations of customers who are looking for ways to safely enjoy their leisure time and spend will be higher than ever, and we are determined to ensure our brands are well-positioned to benefit from this shift. Our venues, in particular, are ultra-safe and invariably benefit from being large in size. This gives us extra opportunities to offer something special to our casino and bingo customers within a COVID-19 safe environment and we are looking forward to welcoming more of our customers back,” John O’Reilly concluded.
Strong Performance pre-COVID-19
The Group entered lockdown with significant momentum to revenues and profits driven by its transformation strategy, a tightly controlled cost base and a strong balance sheet
For the eight-month (pre-COVID-19) period to 29 February 2020:
- LFL Underlying NGR up 11% and LFL underlying operating profit up 61%
- Divisional underlying operating profit: Grosvenor venues up 121%; Digital up 15%, International up 29%; Mecca down 4%
Successful actions taken during COVID-19 pandemic
- Immediate focus of preserving cash during lockdown, the strength of the balance sheet and lower cost base resulting from transformation initiatives implemented in the prior year helped navigate the crisis and prepare for reopening of our venues.
- Delivered numerous local community initiatives which provided support to key workers and vulnerable residents during the COVID-19 pandemic
- The Group has secured waivers for its financial covenants test on 31 December 2020
- As at 30 June 2020, net debt before IFRS 16 was £63.2m. Debt comprised £128.1m in bank loans, £6.2m in finance leases and £2.5m in overdrafts, offset by cash at bank and in hand of £73.6m
Encouraging progress since venues were allowed to reopen in July and August
- Grosvenor venues revenue is running at 60% of the prior year’s levels since reopening on 15 August, which is in line with our base case scenario modelling
- Mecca, which has been open for a longer period, is running at 70% of prior year, slightly ahead of our base case scenario modelling
- Enracha venues are running at 65% of prior year
Other operational highlights
- Acquisition of Stride completed 4 October 2019 and comprehensive integration plan is on track
- Strong performance from Rank’s legacy digital brands, up 23%; however, Stride’s performance reduced pro forma Digital growth to 11% in the year
- Seeing robust returns from investments into product, technology and facilities
- Preparation for the next phase of the Group’s transformation with new three-year plans being developed for each business unit aimed at driving revenue growth and delivering further cost and ways of working efficiencies
- Significant progress made regarding the embedding of safer gambling across the Group including the first bingo operator to add safer gambling controls for time and spend to our gaming machines
- In light of the COVID-19 pandemic and its subsequent material impact on the business the Board will not be proposing a final year dividend. The Board is committed to paying a dividend when circumstances permit, and this will be kept under regular review.
See the company’s presentation of preliminary results here.
See the company’s preliminary results for the 12 months ended June 30 here.
