Rank Group PLC (LSE:RNK) has reported a small rise in net gaming revenues for the first quarter, driven by its digital business as revenues from venues dropped.
The owner of Mecca bingos and Grosvenor casinos said the tough trading environment, with consumer spending squeezed by high inflation and soaring energy costs, is expected to continue to impact its business.
In the first quarter to 30 September 2022, like-for-like net gaming revenue (NGR) rose by 2% to £165.7mln, the gaming group said in a trading statement.
Its digital channel grew NGR by 13% but at its venues, like-for-like NGR fell by 2%.
Although visits to the Grosvenor venues grew in the quarter, spend per visit was lower, leading to a 5% decline in NGR.
Strong growth at the London venues, where NGR jumped 21% driven by a 20% increase in customer visits, was more than offset by a 17% NGR decline from venues outside of London.
Meanwhile, Mecca venues like-for-like NGR grew by 2% in the quarter, driven by a 4% increase in customer visits offsetting a 2% decline in spend per visit.
The digital channel saw growth of 13% in UK NGR and 12% in Spain. Grosvenor digital NGR surged 25% in the first quarter, while Mecca digital NGR was up 1%.
Looking ahead, Rank said it expects consumer spending to “remain under significant pressure this year with inflation likely to remain high for some time”.
“We expect to see some continued impact of these external pressures on the business, particularly in the Grosvenor venues outside of London,” it cautioned.
The group said it expects energy costs in the current financial year to rise to around £34mln from £23mln in the 2022 financial year. Costs will also be pushed up by wage inflation, rising food prices and supply chain constraints, it added.
In the statement, John O'Reilly, Rank’s chief executive, said: "It is pleasing to see increasing visits in this new financial year together with strong growth in the digital business, where we are starting to see the benefits of investments in our proprietary technology platform and our cross-channel offering, with encouraging growth in both the UK and Spain.
“Whilst it is a challenging trading environment and we expect this to continue in the months ahead, we remain committed to delivering Rank's market-leading, exciting, and entertaining proposition to our customers.”