Rank focuses on 'cost efficiencies' following 'tough' 2017 opening

Rank focuses on 'cost efficiencies' following 'tough' 2017 opening

Friday, August 18, 2017 Posted by Luke Massey
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The Group's profit before tax has fallen 7% to £79 million

Presenting its H1 interim results, London-listed gambling operator Rank Group Plc has detailed ‘a challenging’ opening period to 2017.

Updating investors, Rank suggested that its Grosvenor Casino and Mecca Bingo properties had been impacted by raising operational costs, hitting the firm’s bottom-line.

Although Rank maintained like-for-like group revenues of £754 million, with its venue properties generating £642 million during the period, the company declared a statutory 7% profit decline to £79 million (2016: £85.5 million).

Saddled with costs relating to venue operations, Grosvenor and Mecca divisions reported a combined profit decline to £88 million (2016: £97.4 million).

Despite this decline, Rank is continuing to offset losses through its fast-growth digital division which posted a 15% increase in revenues of £111 million, combined with a 63% profit increase to £22 million.

Tackling raising costs, Rank will move to implement a comprehensive strategy focusing on creating ‘stronger group cost efficiency’ through cutting management within venues, restructuring remuneration policy and simplifying venue operations.

Henry Birch, Chief Executive of The Rank Group Plc commented: “After a challenging first half of our financial year, we are very pleased with our second half performance, especially with our digital business which delivered 63% growth in operating profit for the year.

“We are excited about the roll-out of our new Luda bingo concept following the opening of the first venue on 7 August 2017. Additionally, the Group has put in place a number of digital, product and venue-based initiatives launching in the current financial year which we expect to drive top line revenues. The new financial year has started well and the Board looks to the future with confidence.”

Totally Gaming says: The strong digital growth achieved by Rank Group during H1 2017 has failed to disguise a profit decline within land-based venues. The Group will try to offset these losses by streamlining the management team and restructuring its remuneration policy.

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