Analyst: Pre-COVID revenue for Rank Group by 2022 despite H1 fall

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Analyst: Pre-COVID revenue for Rank Group by 2022 despite H1 fall

Rank Group’s H1 2020/21 results suggest pre-COVID-19 level revenue will be reached by the end of 2022, according to an analyst.

Rank Group saw its group revenue drop by 58% year-on-year for the six months until 31 December 2020, due to the closures of venues for much of the period as a result of the coronavirus pandemic, with underlying net gaming revenue (NGR) down to £156.9m ($214m) on a like-for-like basis.

For its venues, which were forced closed for 45% of the available operating days during the period, underlying NGR was down 70% to £90.9m, while digital underlying NGR rose slightly by 1% up to £66m.

With the pandemic causing havoc to its land-based operations, the casino operator’s underlying operating loss was recorded at £41.8m, a stark contrast from the £58.7m profit made in H1 2019/20, representing a 171% fall.

Upon analysing the results, director of consumer and media of investment advisors Edison Group Russell Pointon, believes there are causes of optimism for the operator.

From quotes sent to Gambling Insider, Pointon said: «With ongoing uncertainty about when venues will be allowed to open, hopefully during Q4, management believes it has the balance sheet strength to survive an extended period of closure given the recent equity raise (£70m) and the continued support of its banks.

“In the company’s sensitivity analysis with respect to going concern, the base case assumption is that all venues are open by July with Mecca and Enracha initially contributing at a greater rate than Grosvenor, and that pre-COVID levels of revenue for all are reached by the end of FY22.»

Rank Group CEO John O’Reilly added: «There continues to be uncertainty looking ahead, particularly as our venues remain closed and we have no firm guidance as to when we will be able to reopen. We are now focusing on delivering the next stage of our Transformation plan and are ready to reopen our venues when the virus is under control and the vaccine roll-out has achieved its purpose.»

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