17th Mar 2020 15:02
(Alliance News) -Â Rank Group PLC on Tuesday said it expects to incur costs after the UK government advised people to avoid leisure venues, such as Rank's casinos and bingo parlours.
The gambling company, which owns the Gala Bingo brand, said it has seen a slowdown in trading across the UK in the last three weeks, and in recent days has experienced a "sharper decline".
"Despite the slowdown, our UK venues remained profitable last week," the company noted.
Venues in Spain and Belgium have closed with "substantial support" from those two governments subsidising payroll costs as employees are temporarily laid off.
"The group's digital business operates as normal with colleagues able to work from home, and we are providing additional opportunities for our venues players to socialise and play online," Rank said.
Following UK government guidance for consumers to avoid leisure venues, the company expects closures to result in monthly net cash costs of around GBP25 million before mitigating actions. With mitigating actions, this is expected around GBP17 million.
In addition, Rank has tax and duty payments of around GBP40 million falling due in April.
Rank stressed it has a "strong" balance sheet with net debt at the end of February GBP32 million, funded by its Stride acquisition facility of GBP128 million. The group also has undrawn revolving credit facilities of GBP85 million.
"At this stage, given the continued uncertainty, the board does not believe it appropriate to provide financial guidance for the current financial year ending 30 June 2020. The board will provide an update as and when appropriate," said Rank.
Shares in Rank were down 2.8% at 106.00 pence in London on Tuesday.
By Lucy Heming;Â [email protected]
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