The Rank Group Plc Completion of Gala Casinos acquisition and Interim Management Statement for the 18 and 44 weeks to 5 May 2013.
On 6 March 2013 The Rank Group Plc („Rank‟ or the „Group‟) announced that it had entered into a revised conditional agreement for the acquisition of Gala Casino 1 Limited (“Gala Casinos”) from Gala Coral Group Limited.
Rank is pleased to announce that all the conditions in the revised acquisition agreement have been fulfilled and yesterday it completed the acquisition of Gala Casinos.
Interim Management Statement Rank today announces total continuing revenue for the 18 weeks to 5 May 2013 has grown by 2%, with like-for-like revenues down 2%. For the 44-week period total revenues increased 5% and like-for-like revenues were up 3%.
Ian Burke, chairman and chief executive of The Rank Group Plc, commented:“I am delighted that we have completed the acquisition of Gala Casinos. The addition of 19 casinos creates a market leading position for our Grosvenor Casinos brand, taking us into 11 new markets in the UK.
Unsurprisingly, our venues were affected by the persistent freezing weather conditions during the third quarter. Against that backdrop, we feel our businesseshave performed reasonably well.
We remain confident in the Group‟s long-term growth strategy and its increasing focus on the growth areas of digital and casino venues.
In the 18-week period total brand revenue grew by 1% whilst like-for-like revenues fell by 5%. Venues were adversely impacted by the recent cold weather; this contributed to a 5% fall in customer visits and a 6% fall in like-for-like venues revenue in the 18-week period.
Total venues revenue was in line with last year.
Spend per visit fell by 1% in the 18-week period impacted by a lower than normal win margin in London, which was driven by major player activity.
Revenue growth in the 44-week period remains solid, with the higher than normal London venues win margin seen in H1 still having a positive impact overall.On 4 March 2013, Grosvenor opened a new G Casino in Reading.
Performance to date has been in line with management‟s expectations but it has only been open for a few weeks. The strong growth in digital continues with revenues in the 18- and 44-week periodsup 70% and 64% respectively, albeit from a low base. The growth in digital customer numbers was partly driven by an increased investment in marketing.
The Mecca brand grew total revenue by 2% in the 18-week period with a continuedgood performance from its digital channel; like-for-like revenues were down 1%.In the 18-week period venues like-for-like and total revenue was down 4% and 1% respectively as customer visits were adversely impacted by snow and the prolonged cold weather. An increase in like-for-like spend per visit of 3% reflects the continued success of the improved offering.
For the 44-week period like-for-like and total venues revenue were down 2% and 1 % respectively. A continued increase in customers and spend per visit for Mecca‟s digital brand resulted in revenues increasing by 16% in the 18-week period and 14% year to date.The growth in digital customer numbers was partly driven by an increased investment in marketing.
Enracha‟s Sterling revenue for the 18-week period increased by 1%. In local currency, revenue decreased by 2%. For the 44-week period, euro revenue was flat but an unfavourable exchange rate resulted in a 3% decrease in Sterling revenue.
Blue Square BetOn
2 April 2013, Rank sold the assets and trademarks of its Blue Square Bet business to Betfair Group plc for £5 million.
Blue Square Bet will be disclosed as a discontinued business in the Group‟s full year results to 30 June 2013.
Retirement and appointment of senior independent director
Richard Greenhalgh will shortly have served nine years as a non-executive director of Rank and he has indicated that he wishes to stand down from the board on 30 June 2013. Richard joined the board on 1 July 2004 and has served on all three of its principal committees. He has served as senior independent director since 27 April 2006 and has chaired the remuneration committee since that date and chaired the board‟s nominations committee since 27 July 2011.
Colin Child, who joined the board on 1 January 2012, will become Rank‟s senior independent director with effect from 1 July 2013.
Ian Burke, Rank’s chairman and chief executive said: “On behalf of the board I would like to thank Richard for his commitment and valued contribution during his time on the board.
Outlook
As a result of the temporary impacts of the abnormal weather during the winter period and a weak London win margin in the last 18 weeks, the Group expects its 2012/13 results from continuing businesses (including the contribution from Gala casinos) will be marginally below last year.
With the successful completion of the Gala Casinos acquisition, we have made major progress in delivering the Group‟s long-term strategy by increasing its focus on the growth areas of casino venues and digital. We remain confident in the Group‟s long term growth prospects.
Forthcoming announcements. Rank will announce its full year results on 15 August 2013.
