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Rank expects to miss profit guidance for 2021-22 – Full year results

Rank Group said softer performance in its UK venues in the third and quarters, coupled with inflationary cost pressures across the business, means it will likely fall short of underlying operating profit forecasts for its 2021-22 financial year.

For the 12 months to 30 June 2022, Rank said operating profit is expected to amount to approximately £40m (€46m/$49m), lower than the previously guided range of between £47m and £55m.

This estimate, Rank said, comes after the group witnessed softer performance across is UK venues during the second half of the year, with visitor numbers lower in its Grosvenor Casino properties.

Rank said there had been some improvement in Grosvenor’s performance after April, but it was considerably weaker than expected, mainly due to a slower than expected return of higher spending overseas customers to its London casinos, continued softness in visitor numbers across the UK and a lower-than-average casino win margin in the quarter to date. 

However, Rank also noted that the performance of its other business segments has been broadly in line with management’s expectations for the full year. Rank also operates the Mecca Bingo land-based network, as well as online gambling for both the Grosvenor and Mecca brands.

After also taking into account continued inflationary cost pressures across its operations, Rank said that subject to normal casino win margins between now and the year end, like-for-like underlying operating profit would miss initial guidance.

Rank will announce its preliminary results for the 12-month period on 18 August.

The announcement comes after Rank in April reduced full-year earnings before interest and tax (EBIT) guidance despite reporting a 220.5% year-on-year increase in revenue during the third quarter.

Group net gaming revenue for the three months through to 31 March 2022 amounted to £156.4m, up significantly from £48.7m.

However, Rank noted that Q4 is traditionally low seasonal period for its Grosvenor venues, while uncertainty over how the trends in the rate of return of office workers to city centres and overseas customers to London would develop towards the summer, meant it lowered guidance.

EBIT guidance was cut from between £55m and £65m to the range of £47m to £55m, which Rank does now not expect to reach.

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