Are you invested in LON:RNK stocks? Although reports show a Rank 48% revenue loss, Rank stocks are still performing – resilience is the key! (Photo by Arthur Osipyan on Unsplash)
Rank has announced that they took a substantial blow for the period ending 30 June 2021. The Rank Group is a UK gambling firm that owns several casinos and gambling establishments such as Mecca Bingo and the large chain of Grosvenor casinos to which Evolution uses the Grosvenor’s Victoria Casino in London for its live webcam Roulette streams. Rank is also a London Stock Exchange (LSE) and is on the FTSE 250. Despite the Rank Group’s reported 48% revenue decline, its sticks remain strong trading at 170 GBX versus 138 GBX at the beginning of the year. Even over the past 30 days, its price rose from 159.20 GBX to close on Friday 20 August at 170 GBX. The strength of the group is clearly one that comes from reliance and could be a strong stock to invest in. Check out LON:RNK stocks and add them to your watch list as there could be a post-pandemic rise.
There are a few possible reasons for this, but the obvious reasons would be due to the fact that 79% of the revenue generated by the group derives from its venue businesses. Since the group opened its venues back up in the UK on 17 May, the initial results have given reason for the group to have confidence moving forward, as they have been performing above their targets. During this time, Rank sold Casino Blakenberge in order to raise enough liquidity that should see them meet future liquidity tests.
On 19 August 2021, Rank Group shared its preliminary 12-month results, reported for the period ending 30th June. The company reported £72 million worth of losses, which compares to a profit of £9.4million reported for 2019/2020. The report showed a 12-month net figure for the of £329.6million in gaming revenue, which represented 48% less on the previous year, which stood at £629 million.
The Chief Executive for Rank Group commented on the reports, mentioning how exceptionally difficult the period had been on the company but also the industry. Chief Executive, John O’Reilly, talked about how positive the mood is now that a sense of normality is returning and, as it stands, this financial year has been much more positive now that the venues are open.
Covid has hit almost every company hard in one way or another, and Rank Group were no different, especially considering that such a high percentage of revenue for the group derives from land-based venues.
Closure of Land-Based Venues Connected to Rank Group (Mecca Bingo)
To put it in perspective, the pandemic forced the government into closing venues, such as the famed UK Mecca Bingo halls which also has n online bingo and Playtech casino, for lengthy periods, meaning that Rank Group venues were closed for an amount that was 59% of all operating days available, not forgetting a reduction in opening hours, capacity constraints, amongst other restrictions. For a period of 13-weeks up to 15th August, Grosvenor venues have managed to raise £5.7million per week, on average, which is ahead of the £4.4million breakeven figure required. Since the government eased restrictions on 19th July, the average revenue per week has been around £6.0million.
During the exact same period at Mecca, revenue amounted to £2.6million, which was just slightly above the £2.4million breakeven level required.
Rank 48% Revenue Loss Is a Short Term Impact of Pandemic
John O’Reilly reiterates that there is definitely a fresh breath of confidence, following the reported Rank 48% revenue loss. The company is now fully focusing on growth initiatives. Digital trading comfortably hit expectations for the financial year, which was helped substantially by an increase of flow in omni-channel custom, from the reopening of venues.
Prior to the pandemic, Rank Group was recording strong revenue figures, and the growth in profit was significant, too. Over a traumatic 18-month period, the group were managing liquidity carefully, and creating plans ready for transformation, that would later allow Rank Group to resume those previous growth trajectories.
When the group sold asset, Casino Blakenberge, the £25.2million raised was a strong contribution towards sufficient liquidity. Because of this, available facilities and closing cash totaled a figure of £98.0million by 30th June 2021. Rank Group are confident it can meet requirements for covenant and liquidity tests.
The Rank Group’s 48% Revenue Loss Disappointing
O’Reilly admitted that revenue figures were disappointing, however, he remains adamant that this year has been one of transition for the UK focused digital business. According to O’Reilly, the company is making good, steady progress, with the advancements of its branded technology platform. Migration is expected to be completed sometime during 2021/22 for the Rank brands.
Completion of migration would create more time to allow for much greater speed and agility in developments of new products, enhanced products, digital customer experience and services. This year, digital revenue for the group is expecting consistent growth.
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