In the United Kingdom, casino operator The Rank Group has released its interim unaudited financial results for the six months to the end of 2016 showing that it experienced a 9% decline year-on-year in operating profit to $45.89 million.
The Rank Group is responsible for the Grosvenor Casinos chain of casinos and revealed that its earnings before interest, tax, depreciation and amortization for the six-month period dropped by 5% year-on-year to $74.84 million while its adjusted profit before tax hit $43.25 million, which represented a decrease of 8%.
The Maidenhead-based company also operates the Mecca Bingo string of British bingo halls and declared that the six months to December 31 had been a “challenging” period, particularly for its United Kingdom-facing brands, with its casino business experiencing lower visits and handle along with “flat” like-for-like revenues at $408.96 million.
However, The Rank Group explained that group-wide like-for-like revenues for the six-month period had risen by 2% year-on-year to $474.59 million with its digital business posting an 11% increase in takings to $65.68 million while its overall net debt had diminished by 37% to stand at $41.36 million.
“The first half of the group’s financial year has seen challenging trading conditions for both our retail casino and bingo businesses with strong comparable figures in the previous year,” read a statement from Henry Birch, Chief Executive Officer for The Rank Group. “That being said, both businesses showed a year-on-year improvements from quarter to quarter. Our digital business continues to grow strongly and there remains significant potential for this channel as we deliver improvements in [the next six months].”
The Rank Group’s businesses are thought to have been impacted by a government decision in November to raise the national minimum wage by 4% to $9.40 while it is moreover confronting increased nationwide property costs and general inflationary pressures. Gambling is additionally facing higher taxes even as a series of mergers intensifies competition while August saw the company abandon its partnership with online gaming firm 888 Holdings that would have seen the pair purchase local sportsbetting provider William Hill for around $3.76 billion and create the nation’s largest multi-channel gambling operator by revenues.
“Despite increased inflationary and employment costs, we have detailed plans to improve second-half operating profit and remain confident that the group will make good strategic progress in 2017,” read the statement from Birch. “As a result, the board expects that the full-year results will be in line with market forecasts.”
