Bingo and casino drive Rank Interactive growth
Online arm now contributes 13% of group revenues.
A strong performance from online brands meccabingo.com and grosvenorcasinos.com helped Rank Interactive record a revenue increase of more than 20%, parent company Rank Group announced in its results for the year ended 30 June this morning.
Rank Interactive now contributes just under 13% of the operator’s total revenues, with online operating profit rising 26.5% to £10.5m year-on-year before exceptional items, while the group generated more than £600m for the period.
Rank has moved to a July-June financial year in order to fall in line with the reporting patterns of Guoco Group, whose £585m bid for the operator was accepted in June 2011.
The bulk of Rank Interactive’s revenues came from Mecca Bingo, with the brand “ which launched the first real-money iPhone bingo app on the iTunes App Store last February “ seeing revenues rise 24.1% to £59.7m.
While considerably smaller, the £8.5m in casino revenues represented an increase of close to 50% compared to the corresponding period in 2011, seeing it overtake sports betting as the second-highest online revenue generator. The group said in a statement that its online casino offering “Benefited from support from more consistent promotion in Grosvenor’s venues.”
Rank’s enracha.es site launched towards the end of the financial year having been awarded a licence by Spanish egaming authorities, and is permitted to offer bingo, poker and community card games.
It has also made progress in the regulated Belgian market, signing a strategic partnership agreement with Unibet “ still subject to approval from the Belgian Gaming Commission “ which will see the launch of online casino and poker activities. However the operator explained that “Given the complexity and cost of regulation in Belgium, we prefer a partnership approach rather than entering the market directly,” suggesting it has no further plans for the market beyond its existing partnership.
Rank Group has also revealed plans to push ahead with the development of social games in the coming months, announcing the intention to roll out “a number” of titles on Facebook.
A statement from the company explained that the plans have come as a result of customer demand, presenting “both an opportunity and a challenge” to Rank, but “Whilst we are excited by the opportunity that these games represent for market growth, we remain concerned about the absence of regulation in this sector.”
On the land-based front, the operator’s acquisition of the majority of Gala Coral’s land-based casino estate received approval from Rank shareholders after the end of the financial year. The £205m deal will see Rank’s bricks and mortar casino portfolio increase by 23 to a total of 58 venues, making it the largest in the UK.
Overall group revenues rose 3.4% year-on-year to £600.5m while group operating profit was up 4.1% to £65.5m.
Analyst Nick Batram of Peel Hunt reiterated his firm’s ‘Buy’ recommendation after what he described as “Another solid performance”.
“Given the high quality management team, robust balance sheet, excellent cash flow and growth opportunities, the upside potential is substantial,” he added.