Rank to cut costs as growth slows
Group to undertake revenue improvement and cost reduction measures as Mecca digital revenues slip 3% during quarter
Rank has cited a competitive digital environment as a contributing factor to a 3% drop in revenue from its Mecca Bingo digital division during the last quarter, with the company now eyeing cost reductions as a result.
Like-for-like digital revenue at Mecca Bingo in the 15-week period to 13 October showed a 3% year-on year decline in, despite an increase in digital spend per visit.
The group attributed this decrease to an increasingly competitive market, which it claimed had an adverse impact on marketing and customer acquisition campaigns.
The spin-off of Rank’s Blue Square Bet business has also caused the allocation of share service costs at Mecca to increase, with the group stating that a review of shared service costs to be underway with reductions anticipated for the second half of the current financial year.
It was better news for the Grosvenor Casinos brand increased revenue by 19% in the 15-week period to 13 October, albeit a substantially slower rate of growth than the 72% recorded in the financial year ended 30 June 2013.
Rank again attributed this to a competitive online casino environment and stated its intention to implement revenue improvement and cost reduction actions to mitigate the impact.
Rank’s online business has compounded a slow start to the group’s overall performance, with total like-for-like revenue down 7%.
As a result, the board expects operating profit for the full year to be marginally below market expectations.