Mecca Bingo owner issues profit warning after bad few months for revenue

Dec 16, 2022

Rank Group, the owner of Mecca Bingo and Grosvenor Casinos, has seen its shares slide sharply after issuing a profit warning.

The gaming operator said its annual profit could more than halve after revenues were damaged by the impact of the cost of living crisis.

The football World Cup is also likely to have dented demand.

Rank reported group like-for-like net gaming revenue for the five months to 30 November almost flat on the same period last year.

While sales in its Grosvenor venues over the last few weeks has seen some improvement, the group flagged that a return to growth will take longer than previously expected due to the challenging economy.

The highest inflation for around 40 years – mainly driven by energy costs – has squeezed consumer budgets as wage growth has failed to keep pace.

Data from the Office for National Statistics released on Friday showed a surprise drop in retail sales during November.

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John O’Reilly, chief executive of Rank, said: “Weak consumer confidence and pressure on disposable income is resulting in a tougher than expected trading environment for our UK venues businesses, particularly in Grosvenor where we are seeing customers spending less per visit.

“Whilst we expect these challenges to continue to impact our recovery into the second half of the financial year, we have implemented a series of measures to deliver incremental cost savings and to drive revenues.”

The company said it now expected to report like-for-like underlying operating profit in the range of £10m to £20m for the year ended 30 June 30.

That compared to profits of £40m in 2021/22.

Shares, already down by half in the year to date, fell 8%.

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