Rank Group warns over profits for second time in three months as people stay away from casinos
Gambling giant Rank Group has warned investors profits will be hit following a “considerably weaker-than-expected” recovery from the pandemic.
The operator of both Mecca Bingo and Grosvenor Casinos has downgraded full-year earnings expectations from £47-55m to £40m, amid softer performance in domestic venues over the most recent two financial quarters
This is the second time that company has warned over profits in three months due to soaring costs and a slower than expected recovery in its Grosvenor casino business.
The FTSE 250 firm reported that visit numbers were still down across its Grosvenor sites, while there had also been a slower-than-anticipated return of higher spending overseas customers to its eight London sites.
It is understood that Rank have struggled to lure its regular international tourist base from the Middle East and Asia back to roulette tables. This is bad news for a firm that relies on Grosvenor hot spots to make up 42 per cent of global revenue.
On top of this, there has also been a lower-than-average casino win margin in the quarter to date.
Following the announcement, shares dropped nearly 17 per cent at the opening of trading, and may be set to tumble even further as the government gears up for its gambling white paper.
The review threatens to completely shake-up the sector, introducing affordability checks, as well as betting limits on play.
Commenting on the upcoming reform, a Rank spokesperson said: “The land-based casino sector has put forward a series of modest modernisation proposals which, we hope, will feature in the Government’s upcoming White Paper. The proposed changes are underscored by player protection measures and will help casinos to better cater for contemporary customer expectations in the UK.”
Rank will announce its preliminary results for the 12 months ending 30 June 2022 on 18 August.