Today Rank Group plc (LON: RNK) has announced its interim results for the six months ended 31 December 2019. Group underlying net gaming revenue (NGR) grew by 10% in the period and underlying operating profit increased by 70%.
Reported NGR and operating profit also grew in the period, up 14% and 117% respectively.
On 4 October 2019, Rank completed the acquisition of Stride Gaming plc. Post completion Stride contributed £18.1m of NGR and £1.4m of operating profit in the half.
Operational highlights
· The Group continues to focus on initiatives which drive revenue growth, cost savings and improved ways of working through the transformation programme. Central to this is creating more exciting, entertaining and safe environments and experiences for our customers
· Acquisition of Stride completed 4 October 2019 and the implementation of a comprehensive integration plan is underway
· In the quarter prior to completion Stride’s NGR declined by 15%, and by 2% in the quarter post acquisition
· Strong LFL NGR growth in Digital – Grosvenor up 21% and Mecca up 13%
· Yo underperformed with LFL NGR down 2% but the Group remains confident of its future prospects
· Grosvenor venues LFL NGR grew by 15% with a strong trading performance across the London venues and a positive customer response to key investments into product, technology and facilities
· Mecca venues LFL NGR down 1% with growth in gaming machines offset by lower customer visits impacting bingo and interval games revenue
· Investment in the Spanish Enracha venues estate has supported a 9% growth in International venues LFL NGR
· Several key safer gambling initiatives delivered in H1 with a programme of further developments scheduled for H2
· H1 cost savings delivered from the casino operating model changes on track to deliver annualised saving of £19m
· Strong cash flow generation led to better than expected underlying net debt of £59.0m
· Dividend up 30%
Outlook
· Full year expected underlying operating profit to be between £113m and £123m (£105m to £115m pre IFRS16)
· Good progress is being made with the integration of Stride and we expect cost synergies to be in line with the £13m guidance, largely to flow through in 2020/21 and 2021/22
John O’Reilly, Chief Executive of The Rank Group Plc said:
“We are pleased with The Group’s first half performance which demonstrates that the transformation programme is delivering the right results. The revenue growth in our digital business and across our Grosvenor and Enracha venues shows that we are moving in the right direction in key areas of our business. We remain on track and are confident in our ability to deliver operational and financial improvements underscored by a relentless commitment to delivering exciting, entertaining and safe gambling environments and experiences for our customers.
The successful integration of Stride into our business will ensure that we benefit from strong synergies, proprietary technology and a first-class digital team, all of which will position us well for the second half of the year. These are a good set of numbers and are a testament to our committed and talented colleagues across the Group who have worked hard to deliver them.”
