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High rollers on losing streak make Rank a winner

Published: 11:10 15 Oct 2015 BST

Mecca
Rank`s 90 Mecca bingo clubs boosted like-for-like revenue by 2%

High rollers endured a losing streak over the summer and early autumn, boosting casino returns at gaming and bingo group Rank (LON:RNK).

Rank said big-spending gamblers in its 10 London Grosvenor casinos in the 15 weeks to October 11 helped to drive a strong win margin, up by more than two percentage points against the same time last year.

The company's casinos in the capital increased revenue by 19% compared to 6% in the UK provinces, where it has 48 casinos.

Grosvenor digital revenues increased 56% in the period. Total Grosvenor like-for-like revenue increased 12% against the same time last year.

"We are pleased to see good growth in our provincial clubs, with increased staking levels and good slots growth," the group said.

Rank's 90 Mecca bingo clubs boosted like-for-like revenue by 2% with an increase in spend per visit offset by a reduction in customer visits, although the rate of decline in admissions continued to slow.

Total Mecca revenues fell by 2% following the closure of several clubs in the last year, but digital revenues in the 15-week period rose 10%, with mobile making up more than half of revenue in recent months.

Overal group like-for-like revenue in the period rose 8%. Total revenue increased 7%.

Chief executive Henry Birch said: "The group has had a good start to the financial year. We are seeing a continued strong performance from our Grosvenor Casinos brand, particularly in its digital channel and London casinos, as well as an improving admissions trend in our Mecca venues combined with good growth in Mecca's digital business."

"We continue to work on our five strategic priorities, particularly the development of our new digital platform which is on track to be launched in calendar Q1 2016."

Shares lifted 0.9p to 267.5p in mid-morning London trading.

Nick Batram at Peel Hunt, who has a buy recommendation on the stock, said: "Rank has enjoyed a strong Q1 and progress is ahead of where we expected at this stage. All areas of the business are in growth.

"The shares have enjoyed a rerating but the valuation is hardly demanding and we believe there is much more to come."

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