UK gambling operator Rank Group has unveiled a pre-tax profit decline after suffering slowing sales at its Grosvenor Casinos and reflux in traffic as its Mecca Bingo halls which has started earlier in 2019.
The group operating profit for the 2018/19 fiscal year fell by 22% from £50.1 million posted a year ago to £39 million.
Still, the company revealed that it has already started to see the results of the measures which it had specially designed to boost its revenues and reduce its expenses, and which it implemented in December 2018. The scheme involved cutting staff working hours and removing some management divisions at the company’s Grosvenor brand.
As a result of the above-mentioned measures’ implementation, the result which Rang Group posted for the second half of the 2018/19 year were better than the ones from the first six months of the financial year, even considering the fact that the company’s high-roller customers remained cautious. As Rank Group revealed, its Grosvenor brand’s revenue and operating registered an increase of 1% and 40%, respectively in the latter part of the fiscal year. In comparison, they registered declines of 5% and 35% over the first six months of the year.
The Group further revealed that the falling number of visitors in its Mecca-branded bingo halls were still posing a challenge to the company’s performance, with full-year revenue suffering a 2% decline due to a 9% decline in footfall.
Second-Half Results Improve Despite Further Improvement is Still Needed
As the company revealed, the Rang Group’s revenues for the twelve months until the end of June 2019 were estimated at a total of £695.1 million, a result which represents 1% increase from the £691 million reported in the previous fiscal year. Its pre-tax profit, adjusted for exceptional items, suffered a 6% decline to £69.9 million.
The Chief Executive Officer of Rank Group, John O’Reilly, shared that the group’s management has been pleased with the performance of the gambling operator during the second half of the year, despite the relatively week full-year results. Mr O’Reilly shared that the company has started its transformation well, despite there is still a place for further improvement.
Rank Group’s efforts to bring its results to a positive sign come at a time when British high-street betting shops have been facing difficulties due to stricter regulatory policy. The number of commercial bingo clubs in the country has also been falling over the past two decades and a half.
The decline registered in retail gambling operations across the UK has been one of the main drivers of a massive wave of consolidation which has been happening in the country’s betting sector lately. Some of the most recent examples of such consolidation has been the acquisition of Ladbrokes Coral by the local gambling giant GVC Holdings, as well as the merger between Paddy Power and its rival Betfair.