Rank H1 2018 digital revenues up 16% on strong Mecca and YoBingo! growth
Newly-acquired YoBingo! asset outperforms expectations, but overall group revenues fall due to “challenging consumer backdrop”
Rank Group’s digital revenues increased 15.8% year-on-year during the first half of its 2018/19 financial year on strong growth from Mecca Bingo and YoBingo!.
In its financial report for the six months up to 31 December, the company recorded digital revenues of £70.4m, surpassing the £60.8m in revenue accrued during the same period of the 2017/18 financial year.
Digital like-for-like revenues also grew by 5.1% y-o-y to £63.9m during the period.
The company attributed this rise to improved performance in its Mecca Bingo which reported a 7.5% year-on-year revenue increase. Grosvenor online revenue was up 0.4%.
In addition, revenues from Rank’s newly-acquired YoBingo! business, which operates in the Spanish market and grew by 41% during the period.
Overall group like-for-like revenues decreased 2.4% during H1 2018/19 falling to £366m from a previous H1 2017/18 high of £375m.
“The first half of our financial year has been a tough trading period, I am however encouraged by the Group’s improved performance in Q2,” Rank CEO John O’Reilly said.
Revenues from the group’s Grosvenor and Mecca retail businesses fell by 5.1% and 3.9% during the period, due to a combination of factors which Rank cited as a “reduced contribution from major players, a weather impacted Q1 and challenging consumer back drop.”
The Rank group has just begun a three-year transformation process comprising 300 separate initiatives centred around revenue growth and the reduction of costs.
Addressing the new programme, O’Reilly said the transformation programme will continue to gain momentum over the coming period and that Rank’s management “is positive about what can be achieved” over the coming period.
Rank confirmed it does not expect any material improvement to what it called the “challenging consumer environment” over the short to medium term, but cited its transformation programme as being on track to deliver £10m in total cost savings by the end of FY 2018/19.
The forthcoming rise in remote gaming duty, scheduled for April 2019, is expected to result in additional costs to the Rank Group of £6.6m per annum.