The Rank Group has released preliminary results for the fiscal year ended 30 June 2022, reporting an underlying operating profit of £40.4m ($48.7m).
Following a loss of £82.4m in fiscal year 2020/21, Rank’s bottom line was in the black for fiscal year 2022. The group’s profitability improved as a result of a 98% increase in underlying net gaming revenue (NGR).
According to Rank, the previous year was “heavily impacted” by Covid-related closures, which hurt the group’s bottom line.
However, Rank’s underlying NGR has nearly doubled to £644m from £325.3m last year. This was driven by a 209% increase in underlying NGR at venues, indicating a return to more normal operating conditions following the pandemic.
Meanwhile, digital’s underlying NGR increased by 4% year on year. While this segment’s growth was more modest, it represents a 27% increase over calendar year 2019. Meanwhile, venue NGR remains below 2019 levels, as does Rank’s overall NGR.
Finally, the group’s profit was in line with the guidance issued in June, when Rank reduced its expectations from a previously guided range of £47m-£55m to a range of £47m-£55m.
“Difficult trading conditions in Grosvenor venues, particularly in London,” prompted Rank’s decision to lower its guidance.
“It was a difficult year for our UK venues businesses, with unexpectedly softer trading across the Grosvenor estate in the second half of the year,” said The Rank Group’s CEO, John O’Reilly.
“Our nine London casinos, which account for more than 38% of Grosvenor’s revenue in normal trading conditions, have seen very low customer volumes, with overseas visitors few and only beginning to return in the final few weeks of the year.”
O’Reilly expects trading conditions to remain “difficult” in the future, owing in large part to current macroeconomic factors.
“While we have seen improvements in London in recent weeks,” he said, “the trading environment across the UK is likely to remain challenging in the months ahead, with inflationary pressures squeezing consumer discretionary expenditure and cost increases, particularly in energy prices, putting pressure on profit margins.”