Mecca Bingo firm Rank faces £34m energy bill hit amid ‘challenging’ backdrop
Shares in the company fell in early trading as bosses said they expect ‘challenging’ conditions to continue ‘in the months ahead’.
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Your support makes all the difference.Bingo hall and casino firm Rank Group has reported a surge in energy costs and weaker customer spending at its casinos.
Shares in the company fell in early trading as bosses said they expect “challenging” conditions to continue “in the months ahead”.
It came as Rank, which runs Mecca Bingo, recorded a 2% increase in group like-for-like revenues to £165.7 million over the three months to September 30.
The group was boosted by 2% growth in its bingo business and 13% digital growth.
The group has a number of key initiatives under way to improve long-term revenues
However, the firm highlighted that its Grosvenor casino venues saw a 5% drop in revenues after lower spending per customer visit.
It said London was an outlier, with casinos in the city reporting a 21% jump in revenues, but highlighted that this was more than offset by weaker spending elsewhere in the country amid the rising cost of living.
Rank told shareholders it expects customers’ discretionary spending “to remain under significant pressure this year” despite the positive impact of energy bill support for households.
The gambling and gaming firm said its own costs have continued to soar, with its energy bill expected to rise to £34 million for the current year, up from £23 million.
It added that it is also coming under increasing pressure from wage inflation, higher food costs and supply chains.
John O’Reilly, chief executive of Rank, said: “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.
“The group has a number of key initiatives under way to improve long-term revenues.
“These include some key refurbishment projects and new electronic roulette and jackpot games in Grosvenor; improving the gaming machine offering in Mecca; increased personalisation and a stronger live casino offering in the UK digital business and the recent launch of Yo Sports in Spain.
“The group has the benefit of a strong balance sheet, enabling us to continue investing in the business through this period.”
Shares in the company dropped by 8.7% in early trading.