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Rank swings to half-year loss despite revenue ticking up as costs rise

26th Jan 2023 16:52

(Alliance News) - Rank Group PLC on Thursday said it fell to a pretax loss in the first half of its financial 2023, despite revenue ticking up, as cost of sales and other operating costs widened.

The Berkshire, England-based gambling company said pretax loss in the six months ended December 31 was GBP107.1 million, swinging from a profit of GBP101.5 million a year earlier.

Comparatively, revenue marginally increased to GBP338.9 million from GBP333.7 million.

Most significantly in explaining its pretax loss, Rank's cost of sales widened by 62% to GBP303.8 million from GBP187.6 million, while other operating costs also increased by 9.9% to GBP136.1 million from GBP123.8 million.

As a result, it did not declare an interim dividend, unchanged from a year prior, but said it plans to resume paying out dividends to shareholders when circumstances permit.

Ranks said it observed strong trading across the Christmas and New Year period, but looking ahead, it remained cautious on the second half of its financial 2023.

Cost-of-living pressures are likely to continue to have an effect on its customers over the coming months, it said.

It said it maintained its underlying, like-for-like operating profit guidance range of between GBP10 million and GBP20 million for the full-year, down from GBP40.4 million in its financial 2022.

"The recovery from the severe impact of the pandemic on our UK venues businesses, Grosvenor and Mecca, has certainly been slower than we anticipated," said Chief Executive Officer 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.

"However, trading is improving as we invest in the quality of our products and properties, introduce new gaming concepts for our customers, reduce the level of intrusion in managing customer risk and reintroduce lapsed customers to the fun and excitement of our gaming experience."

Shares in Rank were up 0.4% to 91.10 pence each in London on Thursday afternoon.

By Greg Rosenvinge, Alliance News reporter

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