Interim management statement for the 15 weeks to 12 October 2014 (all comparisons are with the equivalent periods in 2013)
Today Rank announces a 3% increase in like-for-like revenues for the 15 week period to 12 October 2014 driven by the performance of the Grosvenor Casinos brand. Total revenue increased by 2%.
“The Group has had a good start to the financial year and I am pleased with the improvements seen in our Grosvenor Casinos brand, particularly in its digital channel, and the actions to strengthen the performance of our Mecca brand are showing some positive signs.” “We continue to work on our strategic priorities outlined in our 2014 preliminary results announcement and expect to provide a more detailed update at our forthcoming interims in January 2015.”
|Venues – Customer visits||2%||2%|
|Venues – Spend per visit||1%||1%|
Like-for-like and total brand revenue grew by 5% in the 15-week period.
An increase in customer visits and higher staking levels contributed to a 3% increase in venues revenue.
Both London and provinces grew visits and revenues in the period; however London showed stronger like-for-like revenue growth, up 5%, compared to 2% in the provinces.
The performance of the London venues resulted in total venues spend per visit growing by 1% in the 15-week period, despite a slightly lower win margin.
On 25 September 2014 a new casino was opened in Southend and management is pleased with its performance to date.
On the digital side, improvements in VIP management, a growing customer base driven by cross-sell from our venues and the impact of the Grosvenor Casinos branded live casino (launched November 2013) drove revenues up 71% in the period.
|Venues – Customer visits||(2)%||(3)%|
|Venues – Spend per visit||2%||2%|
In the 15-week period like-for-like revenue grew by 1%, with total brand revenue flat year-on-year.
Venues like-for-like revenue was in line with the same period last year with an increase in spend per visit offset by a reduction in customer visits. All venue income streams grew in the period apart from main stage bingo where participation fees were reduced to improve the value for money proposition.
Two further venues were closed (Burnt Oak and South Shields), and the leases surrendered, during the period.
Digital revenues in the 15-week period rose by 4% driven by the recent TV marketing campaign and a more competitive sign up bonus.
Following six years leading the Group’s casino business Phil Urban has decided to leave the Group. Mark Jones, currently Managing Director of Mecca, will succeed Phil as Managing Director of Grosvenor Casinos and will work closely with Phil over the coming weeks to ensure there is a smooth handover prior to Phil’s departure.
The Group is carrying out an external search for Mark’s successor as Managing Director of Mecca and, in the intervening period until an appointment is made, the Group’s Chief Executive, Henry Birch, will act as interim Mecca Managing Director.
On 16 May 2014, new Listing Rules (‘LR’) came into force for all premium listed companies. The Financial Conduct Authority (‘FCA’) confirmed that the minimum free float requirement remains at 25%, however they stated that they will take into account certain factors when making any decision to modify the 25% requirement. Following the release of the new Listing Rules Rank made a formal submission to the FCA requesting it to modify LR 6.1.19 R so that Rank can continue to be a premium listed company with a slightly lower free float percentage than 25%. The FCA has since agreed to modify the Listing Rule to accept The Rank Group Plc’s current free float of 23%. The FCA has the right to revoke or alter this modification at any time.
The Group’s performance in the period has been in line with management’s expectations and the Board remains confident in the Group’s prospects for the year.