Today, the British Gambling operator Rank Group has reported decreasing profits and revenues over the twelve months ended on June 30th, 2017. The company had announced disappointing results, with the strong performance of its digital arm failing to neutralise the negative effects of the strong decline registered at the operator’s land-based venues.
The Chief Executive Officer of the Rank Group, Henry Birch, commented on the gaming company’s full-year performance, describing the first half of Rank’s financial year as challenging. Still, he insisted that the Group’s management team was very pleased with the performance of the company over the second half of the year.
The company, which operates the Grosvenor Casinos as well as Mecca Bingo, revealed a revenue decline from £709 million to £707 million over the twelve months ended on June 30th. Its profit before tax fell by 7% and reached £79.7 million.
One of the most crucial divisions of the operator – the casino division – saw a 3% decline in revenues as well as 14% decline in its operating profits. At this point, the company confirmed that it faced challenging consumer environment, which came as a result of a combination of customer due diligence and various macro-economic conditions on one hand, and venue closures and competitor openings, on the other hand.
As far as the digital brands of the company are concerned, the performance in Rank’s online divisions over the twelve-month period was more satisfactory. The total revenues of the company’s digital brands increased by 15%, while a massive 63% increase was reported in their operating profit.
Mr. Birch also highlighted the fact that the operator’s digital divisions registered an annual operating profit growth of 63%. What is more, he reminded that Rank Group had organised several digital, product and on-site based initiatives over the current financial year, which were expected to help the company increase its revenues. According to Mr. Birch, the new financial year had started well and the company’s Board projected bright future for the operator for the current fiscal year.
However, it is probably too early for everyone related to the company to put hopes on that. As Casino Guardian previously reported, at the time when the operator published its first-half results at the end of January 2017, Mr. Birch explained that Rank Group remained confident in accounting for strategic progress in 2017.
Recently, the UK regulatory body has not only presented a new enforcement strategy, but also revealed its intentions to raise standards for online operators. So, despite the excellent performance of the company’s digital divisions over the year ended at the end of June 2017, it is still hard to predict how would the new regulatory rules affect the operating profit and revenue generated in the months and years to come.
The UK Gambling Commission has lately been focused on enhancing consumer protection in order to provide more customers with the chance to make informed decisions about their online gambling activity. This would tighten the control of the local gambling regulator over all online gaming companies which operate in the region, with some of them already predicting that scrutiny and tightened regime could end up with making the operating environment more difficult for companies.
On the other hand, it is not yet clear how Rank Group’s relatively weak annual performance would affect the company’s future decisions. Last year, the operator was part of a consortium which failed in its attempt to take over one of the largest gaming operators on the territory of the UK – William Hill.
At that time, Rank entered a joint venture with its rival 888 Holdings in order to enhance its digital division’s performance in the light of the declining profits of its land-based venues. So, could Rank Group consider another merger to consolidate its positions and strengthen its digital arm? That still remains to be seen, so stay tuned as Casino Guardian will provide you with the latest updates on the matter.
- Author
Olivia Cole
