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Rank PLC Business Drops
Thursday October 17,2013 : SLOWER BUSINESS FOR RANK PLC
Latest interim management statement shows that digital is still delivering, but at a lower rate.
The online and land gambling group Rank plc issued a 15 week interim management report Thursday, noting a 7 percent decline in like-for-like revenues caused by the exceptionally hot weather in July adversely affecting customer visits, a lower casino win margin in London and a disappointing performance in Mecca's venues and digital channel.
On the positive side, recently acquired Gala casinos have performed well and integration has been completed. Total Group revenues increased by 15 percent as a result of the continuing contribution from the 19 recently acquired casinos.
In reacting to the situation, management is taking both revenue improvement and cost reduction actions to mitigate the impact of the revenue decline, particularly in the Mecca brand.
However, the Board warns that it anticipates operating profit for the full year will be marginally below market expectations.
Like-for-like revenue in the 15-week period declined by 7 percent, offset by total revenue, which increased by 35 percent as a result of the 19 acquired casinos.
Venues were adversely impacted by the July hot weather and a lower than normal win margin in London; this contributed to a 6 percent fall in customer visits and a 8 percent fall in like-for-like venues revenue in the 15-week period.
Like-for-like spend per visit fell by 2 percent in the 15-week period due to the lower than normal win margin in London.
In the Digital division revenue continued to grow and was up 19 percent, however the rate of growth has slowed due to the intensely competitive market environment. Despite an increase in digital spend per visit, the increasingly competitive digital bingo market adversely impacted the effectiveness of marketing and customer acquisition campaigns.
Additionally, following the disposal of Blue Square Bet, the allocation of shared service costs to Mecca's digital channel increased.
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