27th Jan 2022 11:23
(Alliance News) - Rank Group PLC on Thursday announced a swing to profit in the first half of its financial year, despite Omicron restrictions slowing trading in the second quarter.
The Maidenhead, England-based operator of Grosvenor Casinos and Mecca bingo halls reported a return to profit in six months that ended December 31, with an operating profit of GBP103.0 million, swung from a loss of GBP52.9 million in the first half of financial 2021.
However, this is still down 39% from the operating profit in the pre-pandemic first half of financial 2020.
Net gaming revenue for the period was up 90% year-on-year to GBP333.5 million from GBP175.9 million. Casino trading grew steadily in the half-year until Covid-19 restrictions came back. Bingo hall revenue and visitor volumes declined from late October, following growth in the first quarter.
The company does not plan to pay an interim dividend, owing to bank debt covenants. It plans to recommence dividends as soon as circumstances allow.
Looking ahead to its second half, Rank Group said trading has softened in January so far, but it predicts it will recover quickly in its casinos when inbound tourism increases, and more slowly in its bingo halls, as consumer confidence recovers.
It predicts underlying earnings before interest and tax for the full year ending June 30 to be within a range of GBP55 million to GBP65 million.
"Whilst the trading environment continues to be challenging and cost headwinds are applying additional pressure on the hospitality sector, we have proven that with no restrictions, our trading rebounds quickly. Rank is well positioned to regain the robust revenue and profit growth momentum we had created before the pandemic struck," said Chief Executive John O'Reilly.
"There remains some uncertainty as to how COVID-19 will impact our businesses over the coming months, but we are accelerating our transformation investments and are competitively very well placed to benefit as consumers emerge from the pandemic."
Rank shares were up 3.1% to 153.40 pence each in London on Thursday morning.
By Elizabeth Winter; [email protected]
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