Rank Q1 revenues rise as punters return to venues
Bingo hall and casino operator Rank on Thursday reported higher first-quarter revenue as punters returned to its venues after the lifting of Covid-19 restrictions.
The company said net gaming revenue rose 69% to £163.1m on a like-for-like basis for the three months to September 2021 30.
Revenue at its Grosvenor casino venues grew by 209% to £79m year on year, but were down 20% compared to the same quarter in 2019/20, before the impact of the Covid-19 pandemic.
“London continues to feel the impact of reduced tourism, whilst outside London NGR is running at close to pre pandemic levels,” the company said in a trading update.
Mecca bingo venues grew NGR by 41% year on year, but were down 22% compared to the same quarter in 2019/20.
Rank said visit numbers and NGR had gradually improved through the quarter “but visits from our older and more frequent customers have been slower to return than other cohorts”.
Rank forecast annual like-for-like net gaming revenue for the year to June 30, 2022 to be £700m - £750m and earnings before interest and tax of £50m - £75m, assuming venues stay open.
Shore Capital analyst Greg Johnson reiterated the broker's 'buy' stance on the stock, but noted that cost pressures are building - notably in labour and utilities - with the consumer outlook "potentially more challenging".
Although, we see concerns over cost pressures and also the outlook for consumer expenditure, the key delta remains the return of international tourism for its London casino estate, which we expect to pick-up going into the second half and particularly the Q4 period (to June)," Johnson wrote in a note to clients.
"We retain our top of guidance expectations at this stage and would expect the interim results in January to provide a clearer picture. On under 5x fully recovered EBITDA, which we expect by full-year 2024."