Casino operator Rank issues second profit warning
UK gambling group Rank has issued its second profit warning this year as customers at its Grosvenor casinos have been betting less because of cost of living worries.
Rank on Friday cut its operating profit forecast for the 12 months to the end of June next year to between £10 and 20mn from around £40mn, citing poor performance of its 52 Grosvenor venues nationwide.
Weekly net gaming revenues stood at £5.8mn during the second quarter, only marginally ahead of the previous quarter. Rank said an anticipated uptick in revenues had “not yet materialised, driven by lower customer spend per visit”.
“Grosvenor venues have shown signs of improvement in recent weeks and there are robust plans in place to drive revenues, however the return to growth will take longer than previously expected due to the current challenging macroeconomic backdrop,” the casino and bingo hall operator said.
Rank added that the year-to-date performance at its more than 80 Mecca bingo venues “also creates a level of downside risk to the full year out-turn”.
John O’Reilly, Rank chief executive, said that “weak consumer confidence and pressure on disposable income” had resulted in “a tougher than expected trading environment” for the group’s UK venues, particularly the Grosvenor casinos where spend per head was falling.
In June, Rank lowered its earning expectations for the last financial year, citing a weaker than anticipated pandemic recovery.
“We have implemented a series of measures to deliver incremental cost savings and to drive revenues,” added O’Reilly.
Rank shares fell 9 per cent in early trading on Friday.