Rank Group Faces Revenue Loss Despite Promising Results from Land-Based Casino
Rank Group sees profits drop in FY 2023
Despite a 6% increase in revenue, Rank Group is still not back to its pre-pandemic numbers.
If you’ve felt like the cost of everything has gone up lately, or if you’re feeling a little more broke than usual you’re probably right – and the bad news is that you aren’t alone. The pandemic, followed by the supply chain crisis has caused inflation, and this ripple effect is now also being felt in the world of online casinos.
Despite registering a 6% increase in revenue, which is the equivalent of over $868 million during 2022 – 2023, Rank Group is currently faces a statutory net loss. Reporting year-on-year growth across all of its operating segments across the last 12 months, Rank Group claim that declined income and increasing costs are the reasons behind this current dip. These include the Rank-owned Mecca, Grosvenor and Enracha land-based casinos, which took the largest blows during the pandemic.
Regardless of the noteworthy growth in its online casino segment, with revenues of 10.4% recorded, this was still insufficient. Not even offering players free spins no deposit bonuses or other incentives was enough to be able to recoup the challenging past few years.
A Positive Outlook
Nevertheless, notwithstanding registering an overall increase in Gross Gaming Revenue (GGR), the Group registered a considerable dip in operating profits that amounted to a loss of £109.8 million, which is equivalent to around $140 million. According to the latest report, increased operational costs along with higher impairment charges have caused the international group to register a net loss for this year.
Other loss of revenue factors included the Group paying back £34.5 million ($44 million) of their term loan, as well as applying for a new license for YoBingo to operate in Portugal. Apart from that, Rank has also increased its investment in its people by raising the average pay of its employees by 10%.
During the latest meeting, John O’Reilly, CEO at Rank Group acknowledged the increasing costs, however he also noted that with inflation easing, and certain costs reaching stabilization point, revenue growth and profit margins are forecasted to increase in the future.
He explained that given the current economic crisis, land-based establishments have had to face huge surges in energy bills, coupled with a steep inflation in wages and additional restrictions within the regulatory environment. The slow return of overseas visitors to casinos in London as well as additional general pressures have all been contributing factors to the current registered expenditure.
With energy bills now reaching a certain point of stability, and the economic pressure appearing to be easing, O’Reilly also confidently noted that with the registered increase of customers slowly returning to both the Mecca and Grosvenor locations, the Group ‘will now expect to deliver good levels of revenue and profit growth.’
Land-Based Casinos Holding Down the Fort
The Grosvenor, Rank Group’s largest land-based casino business has surpassed all other sources of revenue this year once again, registering a 3.3% increase in net gaming revenue year-on-year despite all odds. Even though the casino faced pandemic lockdowns, and the world is preparing for a potential economic crisis, the Grosvenor London Casino Estate is doing well but has still not reached its pre-pandemic numbers yet, mostly due to the slow return of its overseas customers.
As for the Mecca bingo outlets, Rank Group noted a 1.7% growth in revenue, describing the latest financial year as a ‘turnaround year’, following the huge impact that pandemic lockdowns had on land-based bingo venues across the UK.
Interestingly, this increase in revenue came about despite the Group shutting down 15 outlets permanently during this financial year. By reducing its outlets to 56, Mecca has come out stronger and now focuses on offering a more customer-centric approach instead.
And lastly, Enracha in Spain also enjoyed a year of growth upping revenue by 20% up to £36.1 million ($45.8 million). This growth was attributed mainly to main stage bingo and gaming machines. Customer visits also went up by 16% year-on-year, which is always good news.
Online Casino Catching Up
Registering an increase of 10.4%, digital revenue this year came in at £202.9 million ($258 million), with the Mecca and Grosvenor brands taking the lead online with a combined revenue of £129.6 million ($165 million).
Due to certain updates on the Mecca and Grosvenor RIDE platforms, these online gambling sites are able to offer an improved player experience, which in turn has made them more popular with players. Rank Group also revealed that they’ve applied for a license to launch YoBingo in Portugal, which is set to be the first online bingo site that’s licensed in the country.
Author’s Bio:
Online casino reviewer Emma Davis is considered a veteran in her field, as leading editor and owner of nodepositexplorer.com, it is not only her job, but responsibility to keep up with iGaming trends. When she’s not leading her team of industry specialists, she likes keeping active, cooking and traveling.
