The Rank Group has reported an 11% year-on-year rise in net gaming revenue (NGR) to £179.6m for the quarter ending 30 September 2023 (Q1 2024).

Venues revenue rose by 12% on a like-for-like basis to £127.8m.

Venues growth was primarily driven by performance at Grosvenor Casinos, where revenue spiked 13% to £84.2m. This was due to a 9% uptick in visits and a 4% upturn in spend per visit.

London NGR grew by 8%, while NGR from the rest of the UK grew by 16%. Average weekly NGR came in at £6.4m, up 10% on the same period of last year.

Rank’s Mecca bingo venues delivered NGR growth of 11%, driven by a 4% increase in customer visits and a 7% rise in spend per visit.

Meanwhile in Spain, the operator’s Enracha bingo business grew NGR by 9%.

Digital revenue climbed 7% to £51.8m for the period. The online performance saw 6% growth in the UK, as well as a 15% increase in Spanish online operations.

NGR for the group’s two main online brands in the UK – Grosvenor and Mecca – climbed by 14% and 9%, respectively.

Future trading

Looking ahead to future trading periods, Rank said the operating environment remains challenging with continuing high inflation and interest rates. This means the discretionary spend of consumers is still under some pressure.

Despite those headwinds, the group said it was on track to deliver full-year revenue and profit growth in line with expectations, which are still to be officially communicated.

CEO comments

“I am pleased to report that Rank has made a strong start to the year,” said Rank Group CEO John O’Reilly.

“After an encouraging second half of 2022/23, we have maintained the momentum through the first quarter of 2023/24 and have made good progress in driving revenue and profit growth across the group.

“Going forwards, we remain focused on delivering the key growth initiatives within our digital business and preparing our UK venues for the critical modernising reforms in the Government’s review of the gambling legislation.

“These reforms, which are planned to be implemented by next summer, will help Grosvenor and Mecca to better meet the needs of our existing and prospective customers,” he added.

Analyst reaction

London-based investment brokerage Peel Hunt upgraded Rank Group stock from Add to Buy and retained its target price of 100p following the firm’s quarterly trading update.

“Rank is highly operationally leveraged, and a solid recovery is starting to feed through to the bottom line,” said Peel Hunt analyst Ivor Jones.

“More casino gaming machines have potential to boost growth materially, probably from the autumn of 2025.

“Despite clear signs of recovery and upside potential from regulatory change, Rank’s share price has drifted off.

“We believe that this potential will become increasingly apparent as the year progresses and, seeing no reason to lower our target price, upgrade our recommendation,” he added.

Grosvenor Casino and Mecca Bingo operator Rank Group has reported its financial results for the 12 months ended 30 June, 2023.

Group underlying like-for-like net gaming revenue (NGR) totalled £679.7m for the year, an increase of 7.3% year-on-year.

Of the total, £476.8m or 70.1% came from the operator’s land-based venues, which showed year-on-year growth of 6.1% across the portfolio.

Meanwhile, digital revenue came in at £202.9m, representing the remaining 29.9% of group revenue and demonstrating year-on-year growth of 10.4%.

Brand breakdown

Revenue across all of Rank’s digital brands was up across both the UK and Spain.

The Grosvenor Casino chain of venues continued to be the highest earning business segment for Rank, as it generated 45.1% of group revenue, or £306.3m, a year-on-year increase of 4.2%.

The Digital segment generated the next largest amount of revenue at £202.9m, up some 10%, though Rank did not provide a specific breakdown of the growth across each of its digital brands.

Mecca Bingo venues generated a further 19.7% of overall revenue at £134.1m, up 7.5% year-on-year.

Meanwhile the Enracha chain of venues in Spain generated just 5.4% of group revenue at £36.4m, but was the fastest growing business segment for Rank as it saw revenue increase 18.6% year-on-year.

Turn to loss

Despite the increases in revenue across all business areas, Rank’s underlying like-for-like operating profit fell by 52.2% to £20.3m.

That caused a year-on-year drop in the firm’s earnings per share, from 4p to 1.2p.

The drop in underlying operating profit came as the result of a variety of increased costs, including on employee salaries, energy, proprerty costs, Covid-19 support, IT costs, marketing and other inflation-related increases in expenses.

The results fell short of Rank’s expectations, said CFO Richard Harris, despite revenue increases.

Following impairment charges totalling £118.9m during the year, among other expenses, Rank declared a group operating loss of £109.8m, and a loss before taxation of £122.7m.

As a result, the group fell to a loss after tax (accounting for a tax benefit of £27.1m) of £95.3m, compared to a £64.9m profit after tax in the prior year.

London-listed operator Rank Group reported a net loss of £101.2m in the six months ending 31 December 2022, despite a 2% increase in group revenue to £338.9m. 

Topline numbers

Despite the modest year-on-year revenue increase, the operator reported a £101.2m loss for the first half of its financial year 2022/23 as a result of rising costs for energy, wages and other expenses.

The company’s land-based venues business saw a 1% decrease in revenue from the prior-year period and a 20% decrease from H1 2019/20, the last comparable period which was unaffected by COVID-19.

Revenue from the segment totalled £236.6m.

Digital NGR, meanwhile, showed a 9% increase from the previous year and a 1% increase compared to H1 2019/20, at £100.8m.

Rank Group reported strong holiday trading, specifically in its Grosvenor venues, but noted that it remains cautious about the outlook for H2 given current economic conditions.

The company previously issued a trading update in December and lowered its profit forecast.

News nugget

Rank Group’s operating margins have been severely affected by rising costs for energy, wage inflation, and other expenses.

Average wage increases across the company were 8%, with some employees receiving 9% increases.

Rank said that in 2022/23, costs are expected to increase by about £45-50m, with energy costs projected to be £31m for the full financial year.

Growth drivers

Revenue growth was mostly driven by a 25% year-on-year increase in revenue from the firm’s Enracha venues business in Spain to £17.7m, in addition to its 9% increase in digital revenue to £100.8m.

Meanwhile, revenue from the Grosvenor venues declined 5%, while revenue from its Mecca bingo venues grew by 4% to £65.5m.

Underlying like-for-like operating profit for H1 came in at £4.2m compared with £24.9m in the same period of the previous year.

In a conference call with shareholders, Rank Group CEO John O’Reilly highlighted that both Rank’s Mecca and Grosvenor venues were affected by the pandemic and have not yet fully recovered, but the company is focused on returning them back to pre-pandemic levels.

Meanwhile, O’Reilly highlighted that Rank’s digital business continues to perform well.

All of the group’s brands are now operating on Rank’s proprietary RIDE platform, with Grosvenor being the last brand to complete the migration in H1 2022/23.

“We are now in control of our future from a technology standpoint and have the vision and capability to deliver a market leading cross-channel customer experience in both Grosvenor and Mecca alongside strong and growing support brands in the UK and internationally,” he added.

Rank is now looking forward to the publication of the UK Government’s gambling review white paper.

“Casino and bingo venues are in need of long overdue modernisation of outdated regulation which heavily restricts the customer proposition.

“This appears to be widely recognised within the debate surrounding the Government’s review and we are hopeful of a positive policy outcome followed by the much-needed rapid implementation of new regulation,” O’Reilly said.

Best quote

Rank Group CEO John O’Reilly: “Since lockdown we have faced a huge increase in energy costs, high wage inflation, the slow return of overseas visitors to London and the increasing pressure on consumer’s discretionary income. We have also experienced a continued tightening of the regulatory environment, particularly in regards to affordability restrictions on customers.”

Best question

Ivor Jones of Peel Hunt asked about Rank’s capital expenditure, which totalled £24.2m during the period, up from £13.4m in H1 2021/22.

He wanted to know where the capital was invested.

CFO Richard Harris said around 50% was invested in Grosvenor venues and a significant portion in IT platforms, which supported the 9% growth in digital business.

Harris also mentioned that Rank invested in energy efficiency measures, which it expects to pay off in the next six months.

The company also shifted all of its electricity consumption to renewable energy sources.

Trading update and outlook

Rank reported a positive performance during the holiday season and the first few weeks of January 2023, but acknowledges that financial pressures may impact customer spending in the coming months.

Despite this, the company expects to see continued growth in its digital operations and is maintaining its forecast for full-year operating profit to fall within the range of £10m to £20m.

Rank’s H1 results had little impact on stock prices as the decrease in profits had been already communicated in December.

Analysts from Peel Hunt viewed Rank’s performance as broadly positive. Although the firm noted that there was not enough in today’s statement to support an upgrade, “trading is encouraging,” it said.

However, Peel Hunt added that at a time “when energy prices are high, consumer confidence is low and multi-year investments are beginning to pay off”, it is the wrong time to become more cautious.

Therefore, the firm increased its target price from 90p to 100p and changed its recommendation from Buy to Add.

Shares in Grosvenor Casino and Mecca Bingo operator the Rank Group fell by more than 9% in early trading (16 December) after the operator released a trading performance report for the five months ended 30 November 2022.

Across the group, like-for-like NGR came in flat at 1% year-on-year during the five-month period, reflecting growth across Rank’s Mecca, Enracha and Digital assets, although this was offset by a decline in revenue from its Grosvenor Casino venues.

The operator said while there had been some improvement in trading in recent weeks, its financial Q2 (three months ending 31 December 2022) trading has been “weaker than expected,” with weekly average NGR of £5.8m just slightly ahead of the figures in Q1.

In particular, the effects of the FIFA World Cup, combined with unusually cold weather in the UK and the ongoing cost of living crisis, have caused lower visitor numbers in Grosvenor venues, while Rank has also seen a lower average customer spend per visit.

Mecca customer visit numbers were up 4% on the previous year, meanwhile, with the brand showing Q2 weekly average NGR in line with Q1. 

Rank’s Enracha venues in Spain continued to perform strongly, it said, with NGR up 27% as its Spanish customer base was not facing the same financial pressures as those in the UK.

The operator’s Digital business segment continued to deliver good growth, it added, with NGR up 11% as a result of 10% growth in the UK – driven by the successful migration of Grosvenor’s online offering onto Rank’s proprietary technology platform – and 13% growth internationally, aided by the YoBingo and YoSports brands in Spain.

Grosvenor growing pains

Rank said Grosvenor venues had shown signs of improvement in recent weeks and that there are “robust” plans in place to drive revenue for the brand.

However, Grosvenor’s return to growth will take longer than previously expected due to challenges presented by macroeconomic conditions, Rank said.

Not least of those conditions is rising inflation and associated increases in operating costs, especially impacting expenses such as energy bills and employee salaries.

Rank said that total known cost increases for the year remained broadly in line with its expectations, with around £50m in expected extra costs relating to wage inflation, energy inflation and other price increases.

Rank now expects group like-for-like underlying operating profit for the year ending June 2023 to be in the range of £10m-£20m, with the main variable within that range being the performance of Grosvenor venues.

Rank’s underlying operating profit for financial year 2022 was £40m.

Rank Group CEO John O’Reilly: “Weak consumer confidence and pressure on disposable income is resulting in a tougher than expected trading environment for our UK venues businesses, particularly in Grosvenor, where we are seeing customers spending less per visit.”

“Due to the high operating leverage within Grosvenor, and its relative importance to the group as a whole, movements in its NGR will have a significant impact on the group’s operating profit for the year,” warned Rank in a statement.

Rank CEO John O’Reilly added: “Weak consumer confidence and pressure on disposable income is resulting in a tougher than expected trading environment for our UK venues businesses, particularly in Grosvenor, where we are seeing customers spending less per visit.

“Whilst we expect these challenges to continue to impact our recovery into the second half of the financial year, we have implemented a series of measures to deliver incremental cost savings and to drive revenues.

“We remain committed to our roadmap of investing in initiatives that will ensure the long-term recovery and prosperity of the group. These include delivering new products in our UK venues, enhancements to the design and facilities of some of our casinos and upgrades to the table gaming and electronic offering. 

“Our digital team is now fully focused on delivering the improvements available to our UK and Spanish business following the successful migration of all our brands onto our proprietary platforms.”    

Delay or defeat?

Off the back of the trading update, investment bank Peel Hunt has lowered its underlying operating profit forecast for the business from £43m to £14m, and its EBIT forecast from £65m to £44m.

Regulus Partners: “Unless customers are prepared to spend more on gaming overall, something has to give, and it appears to be giving in the land-based casino market as well as in higher spending bingo customers – the market and segment which happen to have the closest demographic overlap with higher spending online customers.”

For Peel Hunt, the trading update reflects “a delay not a defeat”, and while it pushes back its forecast of Rank’s recovery by a year, the bank reiterated its Buy recommendation and 90p target price for Rank shares.

Regulus Partners, meanwhile, took a less positive view of the update. It said Rank’s performance showed that the UK’s land-based casino sector was the most vulnerable area of the gambling market.

It pointed to slow growth in the UK market in recent years, alongside an increasing number of customers choosing to play online rather than in the land-based sector.

As a result, Regulus said: “Unless customers are prepared to spend more on gaming overall, something has to give, and it appears to be giving in the land-based casino market as well as in higher spending bingo customers – the market and segment which happen to have the closest demographic overlap with higher spending online customers.”

Regulus concluded that: “20 years of low inflation and slow customer adoption of online has created the impression that online growth is independent of land-based resilience; this is a false impression which Rank is now demonstrating, in our view. 

“Overall, the UK gaming customer is still showing remarkable resilience, but the pace of consumer change is now accelerating dangerously.”

Far from fine

Earlier this week, Rank subsidiary Daub Alderney lost an appeal against the Gambling Commission relating to a £5.9m fine issued in September 2021.

The fine was issued for social responsibility and AML failures on Rank’s part, but the operator subsequently appealed to the first-tier gambling tribunal on the grounds that the penalty was excessive, unfair and disproportionate.

That claim was rejected by the tribunal this week, as the fine was deemed a “fair and reasonable regulatory response.”

Shares in the Rank Group slipped by more than 9% today (13 October) despite the operator announcing net gaming revenue growth of around 2% in the first quarter of its 2022/23 financial year (three months ended 30 September 2022).

The modest growth, which brought the firm’s overall NGR to £165.7m, was recorded following a 13% increase in digital revenue to £48.9m, while the company’s largest segment – its UK land-based Grosvenor Casino venues – saw revenue dip 5% to £75.3m.

Mecca Bingo venues in the UK fared slightly better, registering a 2% revenue increase to £33.3m while Rank’s Enracha land-based venues in Spain saw revenue grow 24% to £8.2m.

The dip in Grosvenor’s land-based revenue came in spite of an increase in visitor numbers, as the average spend per visit decreased across the group’s nationwide chain of casinos.

In London, revenue from Grosvenor venues actually grew by 21% as the casinos saw a 20% increase in the number of customer visits, but this growth was more than offset by a 17% revenue decline in venues outside London where customer spend levels were weaker.

Average weekly NGR for the Grosvenor brand was £5.7m, down 5% on the prior-year comparative period but up 12% against the previous quarter.

The firm’s digital brands helped mitigate some of the revenue reductions seen in the land-based sector, as the online Grosvenor brand performed well with 25% revenue growth, following its migration onto Rank’s proprietary RIDE platform in September.

Rank Group CEO John O’Reilly: “It is pleasing to see increasing visits in this new financial year together with strong growth in the digital business, where we are starting to see the benefits of investments in our proprietary technology platform and our cross-channel offering, with encouraging growth in both the UK and Spain.”

Mecca digital remained relatively flat with revenue up just 1%, while Rank’s Spanish online operations grew by 12%.

Rank said that consumer discretionary expenditure “is expected to remain under significant pressure this year,” as inflation remains high.

It added however that the recently announced Energy Bill Relief Scheme is welcomed by the group and, following its implementation, Rank expects energy costs in the current financial year to total around £34m, up from £23m in FY22.

Other inflationary pressures continue to present a challenge to the business, it said, particularly in the land-based sector as wage inflation, food price increases and supply chain pressures all continue to push up costs.

“It is pleasing to see increasing visits in this new financial year together with strong growth in the digital business, where we are starting to see the benefits of investments in our proprietary technology platform and our cross-channel offering, with encouraging growth in both the UK and Spain,” said Rank Group CEO John O’Reilly.

“The group has a number of key initiatives underway to improve long term revenues. These include some key refurbishment projects and new electronic roulette and jackpot games in Grosvenor; improving the gaming machine offering in Mecca; increased personalisation and a stronger live casino offering in the UK digital business and the recent launch of Yo Sports in Spain. 

“The Group has the benefit of a strong balance sheet, enabling us to continue investing in the business through this period,” O’Reilly concluded.

The Rank Group returned to operating profit in the year ended 30 June 2022 as net gaming revenue (NGR) more than doubled year-on-year to £644m.

That NGR came mostly from the firm’s land-based operations – including the UK’s Grosvenor Casino and Mecca Bingo brands – as the segment generated £460.7m, or 71.5% of the overall total.

The figures represent growth of more than 200% in land-based NGR, as that part of the business generated just £148.9m in the Covid-impacted 2020/21 full year.

However, NGR in the land-based segment continues to lag behind revenue for calendar year 2019 – the last pre-Covid comparable period available – during which time the business generated £571.4m, some 24% ahead of the latest figures.

Overall group NGR is also still behind pre-covid levels, with the £644m underlying NGR coming in around 10% lower than the £715.4m generated in 2019.

Digital revenue was higher this year than both the prior-year comparative period and pre-covid revenue in 2019, however. The online segment generated £183.3m in the 12 months to 30 June 2022, 3.9% ahead of the prior year and 27.3% ahead of 2019.

The overall year-on-year revenue increase helped Rank narrowly exceed its previously issued operating profit guidance of £40m, as the actual figure totalled £40.4m.

Growth was driven by stronger performance in the first half of the year than the second, with H1 accounting for £24.1m in operating profit and H2 just £16.3m, in part as a result of the Omicron variant of Covid-19.

Still, this represented a significant turnaround for the business, which declared an operating loss of £82.4m in the prior-year period, and shows it is on its way to recovering pre-Covid levels of profit. 

There is still a long way to go for a full recovery, however, as 2019 saw the business declare £104.2m in operating profit, more than double that of the latest reporting period.

Following the end of the period, Rank said its upward trend continues, as the firm reported that in the first seven weeks of 2022/23, overall underlying NGR is trending 3% ahead of the prior year. Digital NGR is currently ahead around 7% with venues down 1%.

The business said that trading conditions are likely to remain challenging in the coming months due to prevailing macroeconomic conditions including rising inflation and energy prices impacting customer spend and operating margins.

Rank Group CEO John O’Reilly: “Whilst we have been seeing improvements in London in recent weeks, the trading environment across the UK is likely to remain difficult in the months ahead with inflationary pressures squeezing consumer discretionary expenditure and cost increases, particularly in energy prices, putting pressure on profit margins.”

“It was a challenging year for our UK venues businesses, with unexpectedly softer trading across the Grosvenor estate in the second half of the year,” said Rank Group CEO John O’Reilly. 

“Our nine London casinos, which account for over 38% of Grosvenor’s revenue in normal trading conditions, have seen very weak customer volumes with overseas visitors few in number, and only starting to return in the final few weeks of the year.

“Whilst we have been seeing improvements in London in recent weeks, the trading environment across the UK is likely to remain difficult in the months ahead with inflationary pressures squeezing consumer discretionary expenditure and cost increases, particularly in energy prices, putting pressure on profit margins.”

To combat this, O’Reilly said the business is taking action to drive further efficiencies in its land-based businesses, while the transfer of Rank’s digital brands to the firm’s proprietary technology platform is supporting revenue growth in the online segment.

Commenting on the upcoming government review of the UK’s 2005 Gambling Act – which is expected to bring several benefits to land-based operators in the country – O’Reilly added that Rank expects to be well positioned to benefit from the review when it concludes.

London-based investment bank Peel Hunt reiterated its Buy recommendation and 175p target price for the stock.

“Digital is showing good progress and London customers are returning to Grosvenor,” said Peel Hunt analyst Ivor Jones. “However, ex-London Venues customer numbers are slower to recover and there are cost pressures. In particular, FY23E energy costs would be £46m at current spot prices (up from £23m in FY22).”

Shares in Rank Group tumbled double digits this morning (20 June) after the operator published another profit warning to investors.

Rank Group had already issued investors with a trading update in April, which showed that its revenue levels during the three months ended 31 March 2022 – Q3 of Rank’s 2021-22 financial year – remained below pre-Covid levels across all business areas.

That update saw the firm’s share price slip from around 128p to around 107p. Today however, the operator began trading more than 17% down on yesterday’s close.

This morning, the firm’s share price fell as low as 82p – the lowest price since 2020.

Rank told investors that following weakened performance in the first months of the year, the performance of its Grosvenor Casino brand had begun to improve since April. However, that improvement was considerably weaker than expected, it explained.

This, it said, was principally due to a slower-than-expected return of high-spending, international visitors to the firm’s London-based casinos, continued softness in visitor numbers across the UK, and a lower-than-average casino win margin in the quarter to-date.

Performance across other business segments – principally Rank’s Mecca Casino brand in the UK and Enracha in Spain – has been broadly in line with management expectations, the business said.

Subject to normal casino win margins between now and the end of its financial year (30 June), Rank said it now expects like-for-like underlying operating profit (EBIT) for the year to total around £40m, lowered from previously issued guidance of £47m-£55m.

The firm’s preliminary results for the 12 months ending 30 June are expected to be released in August.

Peel Hunt analyst Ivor Jones: “It appears that key customers intend to return as soon as July, but it is hard to predict with certainty. A large minority of Grosvenor’s London revenue is generated from customers who are primarily based overseas.”

In a note sent to investors today, Peel Hunt analyst Ivor Jones announced a lowered target price for shares in Rank Group – reduced from 220p to 175p – but reiterated a Buy recommendation while the firm’s share price remains low.

The analyst also reduced financial year 2023 EBIT expectations from £91m to £77m.

Jones said he expects to revisit these expectations following the release of preliminary results in August, at which time Rank management will comment on initial trading during the start of financial year 2023.

Rises in visitor numbers, normalised casino margin, and the return of international and high-staking customers to Grosvenor venues will all be key metrics to look out for, which may signal an upturn fortunes.

Jones remained cautious with regards to the company’s recovery, however. “Overseas visitors to Grosvenor should come back, but Covid-19 restrictions remain in place in some key source markets and there have been other local disruptions,” he said. 

“It appears that key customers intend to return as soon as July, but it is hard to predict with certainty. A large minority of Grosvenor’s London revenue is generated from customers who are primarily based overseas.”

Jones noted that domestic UK customers are also being impacted by macroeconomic factors currently affecting general consumer spending, while casino venues are being impacted by behavioural changes being felt across the night-time economy.

One key change which could help the business get back on the path to growth is an increased focus on Rank’s digital business division.

The firm’s online brands should complete their delayed migration onto an in-house platform this summer, Jones said.

Last month, Peel Hunt told investors that while Rank’s digital division accounted for just 9% of group EBIT in H1 2022, that figure could rise as high as 33% by financial year 2024. 

The operator’s digital offering “is a major part of the Rank investment case,” according to Peel Hunt.

The Rank Group’s share price has fallen 8.4% this morning (21 April) after a trading update showed the operator’s revenue during the first three months of 2022 remained below pre-Covid levels.

An update covering Rank’s 2021-22 financial year’s third quarter – or the three months ended 31 March 2022 – showed that net gaming revenue across the business totalled £156.4m, consisting of £111.2m in land-based revenue and £45.2m from online.

The operator’s Grosvenor Casino venues generated £69.1m of the total, representing a 14% revenue reduction from the same period in 2019, which Rank selected as the comparative period. 

Mecca Bingo venues saw revenue, which totalled £34.1m this quarter, reduced by 25% against the same comparative period.

As all of Rank’s UK-based venues remained closed during the first three months of 2021, and were also affected by the onset of the Covid-19 pandemic in the early months of 2020, figures from 2019 provide the most recent comparable period unaffected by the pandemic.

Rank said that during the most recent quarter: “For both our UK venues businesses there was a softness in visits at the end of the quarter consistent with the rise in new Covid-19 cases reported across the UK.”

The operator’s Spanish Enracha business reported a less significant revenue reduction, however, with NGR down just 2% compared to the first three months of 2019.

“While the recovery is taking time, we believe that in the medium term there remains a strong path to recovery to the pre-Covid-19 levels,” the firm said.

Rank CEO John O’Reilly: “The performance of our venues softened in March and this has continued into the first few weeks of Q4, impacting our current expectations for our full year performance.”

Of the operator’s £45.2m in digital NGR, the vast majority at £40m came from the UK.

This represents a 1% reduction in UK digital revenue, Rank said, as 3% growth across its Grosvenor digital brand failed to offset a reduction of 11% in Mecca digital revenue, caused as a result of its migration onto Rank’s proprietary RIDE platform in January.

Rank said its other digital brands displayed mixed performance, as NGR from its other brands operating on the RIDE platform grew by 42%, which was partly offset by a 25% revenue decline in non-proprietary brands on the platform.

Elsewhere, International digital NGR dropped 5% to £5.2m.

Rank has entered the current quarter with visitor numbers down, in a traditionally low seasonal period for its Grosvenor Casino venues.

The operator expects an improvement in performance after April, it said: “It remains to be seen how the trends in the rate of return of office workers to city centres and overseas customers to London will develop towards the summer.”

Given the uncertainty around the future performance of its land-based businesses, Rank has updated its previously guided EBIT range of between £55m and £65m for the year ending 30 June 2022, to between £47m and £55m.

“The performance of our venues softened in March, and this has continued into the first few weeks of Q4, impacting our current expectations for our full-year performance,” said Rank CEO John O’Reilly. 

“We recognise the pressures on UK consumers but are confident that the improvements we are continuing to make to the customer proposition and the investments in our venues, alongside the gradually reducing impact of the pandemic and, with it, the return of overseas customers, position us well for the year ahead.”

Despite the downturn in revenue throughout the pandemic period, Peel Hunt reiterated its Buy rating for Rank and 220p target price.

While the investment bank’s forecast for full-year 2021-22 EBIT has now been reduced by 9%, from £55m to £50m, analyst Icor Jones said: “We see no reason to expect a cross-infection into our FY23E forecasts, which we are not changing today.”

According to a note sent to investors, an uptick in Rank’s performance later this year will depend on a bounce back in demand through May and June as international and domestic tourism continue to recover.

Peel Hunt disclosed in the note that Rank is one of its corporate clients, and that it holds more than 5% in Rank’s business.