Amid COVID-19 disruptions, Rank Group has revealed that it is ‘preparing for difficult trading conditions’ when it reopens its venues.
Publishing a trading update for the quarter to 31 March 2020, Rank’s like-for-like net gaming revenue was down 4% for the quarter, while total NGR saw an increase of 5%. Rank Group has predicted that annual underlying operating profit will amount to somewhere between £48 million and £58 million, based on the assumption that its venues remain closed for the rest of the financial year.
The Group’s digital division saw the largest increase in NGR, with a 21% increase for the quarter. Grosvenor Digital NGR grew by 27% in Q3 which Rank says was largely ‘driven by continued growth in new players and strong levels of returning players’.
Mecca Digital also performed strongly with NGR up 20%, whilst a series of senior management and operational changes undertaken during Q2’ had a positive impact on Spanish asset Yo’s performance, reporting NGR growth by 9% during Q3.
In its update, Rank revealed that its monthly cash outflow during the coronavirus pandemic enforced closures will be £10 million per month from May 2020. The figure has decreased from the previously expected £17 million per month, as a result of the HM Treasury’s support measures.
The Group has also benefited from approximately £1 million per month from the business rates holiday.
John O’Reilly, CEO of Rank, commented: “With the tremendous support we have received from HM Treasury and HMRC, together with our own mitigations, we have established a robust financial position to address and withstand an extended period of economic turmoil.
“Given the uncertainty we face and continued social distancing measures likely to be in place for some time to come, we continue to work to protect cash and to prepare for the reopening of our venues in as safe a way as possible.
“I am enormously proud of our colleagues and how they have responded to the decisions we have had to take as well as their selfless response and contribution to the national effort. We know how important our venues are in many local communities and we’ve answered the call to contribute by stepping up to help those who need it most right now.”
Rank Group also confirmed that it had requested repayment from HMRC of £25.2 million in relation to VAT paid on slot machine revenue between 2002 and 2005 to maximise its liquidity and this was received in early April
Mitigating the short-term effects of the COVID-19 lockdown, circa 7,000 colleagues, out of a UK workforce of 7,600, have been furloughed by the Group, with all colleagues receiving 80% of their salary under the UK Government’s Coronavirus Job Retention Scheme which has been topped up by Rank.
Issuing a response to the Government’s call for contributions during the COVID-19 lockdown, Rank stated: “The Rank Group’s Board and our colleagues are conscious of the need to contribute to the wider societal effort at this time of national crisis.
“Our customers know that our venues are community hubs and far more than just places to gamble, and our non-furloughed colleagues have stepped up to ensure we are able to use our venues, wherever and however possible within Government guidelines, to support key workers and vulnerable people in our communities.
“We have launched a new charity initiative in collaboration with Blue Light Card, the UK’s number one discount service for the NHS, Emergency Services, Social Care workers and Armed Forces. Rank colleagues are providing free meals to these key workers from some of our UK venues’ kitchens.
“We are also collaborating with a number of MPs and local councils to ensure whatever capacity we have in our kitchens is maximised to provide vulnerable people, including the homeless and elderly, with hot meals, cooked in Rank venues and distributed by our teams. Our colleagues are also calling our regular Mecca customers to check in on their wellbeing.
“We are acutely aware of the need for heightened vigilance in identifying any signs of gambling-related harm in our digital business, and have redoubled our safer gambling efforts, incorporating the Betting & Gaming Council’s ’10 pledge action plan’ and bolstering resource in our safer gambling teams.”