Rank Group, a UK-based gambling company, announced that its revenues have returned to 90% of their pre-pandemic levels. However, it is still early to celebrate as the company believes the next few months will be very challenging.
Rank Group Expects Tough Times
Rank Group, which operates the Grosvenor Casino and Mecca Bingo chains, might have almost recovered its revenues but the company believes the ongoing inflation is going to pose additional challenges to its business.
John O’Reilly, chief executive of Rank Group, noted that the ongoing inflation will likely squeeze consumer discretionary expenditure. The operator is braced for cost increases, especially when it comes to energy. This, in turn, will put pressure on Rank’s profit margins, O’Reilly warned.
For reference, the past year saw Rank’s energy expenses almost double up to about $28 million. The company estimates that its energy needs for the following year will cost about $55.4 million.
In addition, O’Reilly noted that the trading environment in Britain will likely remain difficult. On that note, Rank Group’s shares continue to fluctuate and experience sharp drops and rebounds. As of the time of this writing, a single Rank Group share trades for GBX 86.90.
Revenues Rebounded Despite the Hardships
Taking a look at Rank’s revenues, the company experienced a strong recovery during the past fiscal year. Rank Group closed the year with $775.6 million, which is almost double the revenues it recorded during the previous one. This major increase is a notable one as it demonstrates that revenues have almost returned to their pre-pandemic levels.
The recovery can be largely attributed to Rank Group’s retail businesses as the company’s casino and bingo chains saw revenues skyrocket by 209% to $557 million. Meanwhile, Rank Group’s digital segment also experienced growth, albeit a more modest one. Rank closed the fiscal year with about $221 million in online revenue, which represents a 4% year-on-year increase.
Another notable achievement is Rank Group’s success in decreasing its operating losses. The company lost only $40.6 million during the period, which is almost half of the $99 million it lost the previous year.
The aforementioned numbers are in line with Rank Group’s expectations for the year. Two months ago, the company announced that it expects weaker FY 2021/22 results. Back then, the company attributed the decline to the lower visitor count and the rising operating costs.
Despite the challenges, Rank Group remains committed to delivering exciting and safe experiences to its customers. In May, the company teamed up with GamCare to provide its employees with safer gambling education and training.