British gambling company The Rank Group announced that it will likely underachieve and fail to reach its operating profit forecasts for the 2021-22 fiscal year. This is caused by the operator’s underperformance in its home market, especially in the latter two quarters of the year.
Rank Group’s Business Underperformed
Rank Group’s earlier predictions expected it to earn between $57 million and $67 million for the twelve months to June 30, 2022. However, the company has now corrected its forecasts as softer performance in the United Kingdom will likely result in lesser profits. According to Rank’s new announcement, the group now expects to earn about $49 million by the end of the financial year.
Rank Group attributed the weaker results to the lower number of customers at its brick-and-mortar venues. The Grosvenor Casinos chain saw much fewer visitors than the company hoped. Despite numbers improving after April, it still was not enough to mitigate the damage. Because of the pandemic, there are also fewer high-spending foreign guests which is one of the major factors that influence Rank’s forecasts.
The Company Will Release Its Preliminary Results in Two Months
Rank Group’s business has been further hurt by inflation caused by the turbulence in the global market. As the inflation continues to affect prices, Rank’s operating profits also increase. Therefore, the company expects its operating profits to be lower than what it had previously predicted.
Rank’s EBIT expectations are also lower than before. In April, the company adjusted its forecasts, lowering the EBIT guidance from $67-79 million to $55-67 million. However, the company now thinks it may fail to meet its adjusted expectations as well.
Despite the headwinds, not everything is grim for Rank Group. On the contrary, the company’s business performance seems to be more or less in line with the forecasts for the 2021/22 fiscal year. This is thanks to the satisfactory performance of its various land-based and iGaming brands.
Industry analysts, specialists and enthusiasts can expect Rank’s preliminary results to go live on August 18.
Rank Group Had a Strong Q3
In April, Rank Group posted its financial results for the third quarter of the fiscal year. Despite the 220.5% YOY profit increase, the company still had to lower its expectations for its upcoming full-year results. This is because the Grosvenor Casinos statistically tend to have much fewer visitors in the fourth quarter of fiscal years.
Even so, Rank Group had an extraordinarily strong Q3 and reached $191 million which is three times higher than what the company earned in Q3 of the 2020/21 year.