Rank tanks following profit warning
The group blamed weaker than expected visits that were ‘compounded’ by the recent cold weather.
Shares in Mecca Bingo owner Rank Group tumbled on Thursday after the firm warned over profits.
The group, which also owns the Grosvenor Casinos chain, blamed weaker than expected visits that were “compounded” by the recent cold weather.
Rank added that underperformance at Grosvenor has been exacerbated by a “negative contribution” from its usually big spending “VIP players”.
In a trading update covering the 13 weeks to April 1, the firm booked a 2% fall in like-for-like sales.
Mecca Bingo’s revenue fell by 2%, Grosvenor’s venues revenues fell by 9%, although digital revenue grew by 17%.
As a result, the firm’s management now expects full year operating profit to be in the range of £76 million to £78 million, below analysts’ consensus of £83 million.
“The board is cautious about the UK consumer outlook and as a result expects the group’s UK venues to continue to be impacted for the remainder of the 2017/18 financial year and into 2018/19,” Rank said.
Shares tanked over 13% to 185p following the news.
The profit downgrade comes despite a push to reinvigorate the bingo scene, with “experiential” events such as Batty Bingo, Bonkers Bingo and Big Bingo Bash, as well as a bingo-themed mini-cruise in partnership with P&O Ferries.
“As highlighted in Rank’s recent interim results statement, a number of key operational actions have been identified and are being put into place to improve Grosvenor’s performance over the medium to long term,” Rank said.