The Rank Group, owner of Mecca Bingo and Grosvenor Casinos, as well as high street bingo cafe Luda Bingo, has reported a drop in revenue for its Mecca Bingo halls and Grosvenor Casino sites during the first 13 weeks of 2018.
Revenues from Mecca Bingo halls fell by 2 per cent, while sales at Grosvenor Casino sites dropped by 7 per cent. The Rank Group’s share prices have also plummeted by 15 per cent, closing at 180p on Thursday 5th April, their lowest since February 2015. The group expects annual operating profits to come in at between £76-78 million, which is below analyst forecasts of £83million for the year ending June 2018.
This downturn in profits comes despite a push by the Rank Group to breathe new life into the bingo scene, with ‘experiential’ events such as Batty Bingo, Bonkers Bingo and Big Bingo Bash. They also held a bingo-themed mini-cruise in partnership with P&O Ferries.
It also seems that Luda Bingo, the newest venture for Rank, has not been the lucrative project that the company hoped, as the response to Luda – which now has three sites – has been mixed. But Rank continue to support the brand, with plans for the online site of Luda Bingo to go live in the second half of 2018, besides the launch of Bella Casino and the redesign of the Mecca Bingo and Grosvenor Casino websites.
Rank Group blames the downturn in profits on poor weather – meaning that fewer players are venturing outside their homes to attend bingo events or play in land-based casinos. It is also possible that the uncertainty surrounding Brexit is leading consumers to tighten their purse strings – this effect has also been seen in the retail sector, which has also seen dwindling profits in the last year. Grosvenor Casino has also had a recent stream of lucky players with big wins – leading the company to pay out more winnings than usual.
“The board is cautious about the UK consumer outlook and as a result expects venues to continue to be impacted for the remainder of the 2017-18 financial year and into 2018-19,” said Rank.
Fortunately for the group, online bingo has been on the rise, as digital sales at meccabingo.com and grosvenorcasinos.com have climbed by 17% in the 13-week period. Rank plan to continue the push to increase online gambling spend, with a three-year plan to boost the number of Grosvenor retail customers playing digitally from its current 3.5% to 15%. But they will have to soldier on without their leader, as chief executive Henry Birch is leaving the company to take over the helm of online retailer Shop Direct.
“Shares in bingo hall owner Rank Group fall by 15% as profit warning and sliding sales spook investors”, This Is Money, http://www.thisismoney.co.uk/money/markets/article-5581029/Shares-bingo-hall-owner-Rank-Group-fall-15.html
“Rank shares tumble 15% to three-year low after profits warning”, The Guardian, https://www.theguardian.com/business/2018/apr/05/rank-shares-three-year-low-profits-warning-casinos-mecca-bingo-sales
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