- Third quarter revenue up 6%
- Strong showing in Mecca Bingo
- Full year outlook affirmed
Casino and bingo operator Rank (RNK) said like-for-like net gaming revenue for the third quarter to 31 March increased by 6% to £182.3 million, with trading continuing to improve in April.
Shares in the Grosvenor Casinos and Mecca Bingo operator increased 2.6% to 72.9p and sit around 4% lower than the start of the year compared with a 1.5% gain in the FTSE-All Share index.
Chief executive John O’Reilly said: ‘We continue to make good progress across both our venues and online businesses, with Q3 trading very much in line with the Board's expectations.
‘Performance continues to improve, and we have the very important land-based reforms from the Government's White Paper to look forward to, which we hope to start implementing in the coming months.’
O’Reilly is referring to new legislation which is designed to level the playing field between land-based and online gambling firms. For the bingo sector the changes will remove the 20% restriction of B3 category machines (minimum £2 stake, maximum £500 prize) which is by far the most popular machine for Rank’s customers according to a management presentation.
In Casinos Rank has an opportunity to install up to 80 gaming machines per venue, four times the current limit.
MECCA BINGO SHINES
Mecca bingo venues were the star performer in the third quarter seeing 12% like-for-like growth in net gaming revenue driven by a 5% increase in customer visits and 7% increase in spend per visit.
The company benefitted from an early Easter and strong trading over the Mother’s Day weekend. Analyst Greg Johnson at Shore Capital said: ‘After two clubs were closed in the period, and with a smaller, higher quality estate emerging, Mecca looks well positioned to reach management’s target for double digit profitability over the medium term.’
The biggest division Grosvenor casinos representing 44% of group revenue generated 3% growth in like-for-like net gaming revenue as visitor numbers increased by 5% in a seasonally quieter period.
Digital revenue which represents around a third of group revenue increased 6% to £55 million driven by a 4% increase in the UK and 20% growth in the company’s Spanish bingo venues trading under the Enracha brand.
Summing-up the trading statement Gregg Johnson said: ‘Overall, we see this as an encouraging update, supportive of both our full year assumptions and longer-term potential to deliver meaningful profit growth, especially with impending gambling reform.’
