UK gambling group Rank said it was starting to see results from a turnround programme as it battles to offset lower spending by high-rolling customers at its Grosvenor Casinos and declining footfall at its Mecca bingo halls.
Following a period of decline, the group in December began implementing a host of measures designed to boost revenues and cut costs. This involved slashing staff hours and removing management layers at Grosvenor.
As a result, Rank’s second-half results were markedly improved from the first half, even as higher-spending customers remained cautious. At Grosvenor, revenue and operating profit were up 1 per cent and 40 per cent respectively in the latter part of the year after declines of 5 and 35 per cent in the first half.
At Mecca, falling attendance at its bingo halls continued to weigh, with full year revenue down 2 per cent on the back of a 9 per cent drop off in footfall.
“We are pleased with the group’s second half performance and the full-year results, especially given the challenges we faced in the first half of the year,” said John O’Reilly, Rank chief executive. “We have made a good start to the transformation of Rank and there remains a lot of improvement to be delivered.”
Rank’s efforts to turn itself round comes as the malaise affecting Britain’s high streets has hit leisure groups too, with the number of commercial bingo clubs in the UK plummeting over the past 25 years.
The decline of retail gambling is one of the drivers behind a wave of consolidation in the UK betting sector in recent years, such as GVC’s acquisition of UK bookmaker Ladbrokes Coral and the merger between Paddy Power and Betfair.
Overall in the twelve months to the end of June, Rank posted revenues of £695.1m, up 1 per cent from £691m in the previous financial year. Pre-tax profit, adjusted for exceptional items, was down 6 per cent at £69.9m.
Last year, Rank reported a 40 per cent fall in pre-tax profits for the year to June, in the wake of a turbulent few months where the company warned on profits and then hired industry veteran John O’Reilly to replace chief executive Henry Birch.
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