Citing a “considerably weaker-than-expected” performance from its Grosvenor casinos, alongside “continued inflationary pressures,” Rank has downgraded its full-year expectations.
For FY22, the group now expects to earn approximately £40m ($49m), down from the previously guided range of £47m-£55m. As noted in a trading update published on 21 April, Rank had witnessed a “softer performance” in the UK during Q3 and entered Q4 of fiscal year 2022 with visit numbers to the group’s Grosvenor casinos down.
At the time, Rank’s CEO, John O’Reilly, remarked: “The performance of our venues softened in March, and this has continued into the first few weeks of Q4, impacting our current expectations for our full-year performance.”
Nevertheless, the group expected a post-April surge, but this has apparently failed to materialise, hence Rank’s latest update.
While Grosvenor’s performance has improved, it has fallen short of the group’s expectations, due in large part to the slower-than-anticipated return of higher spending overseas customers to the group’s London casinos, as well as a lower-than-average casino win margin.
Based on this, Rank adjusted its full-year guidance for underlying operating profit to £40m, subject to normal casino win margins between now and the year end.
This also represent Rank’s second downgrade since April, when the group reduced its previously guided EBIT range of £55m-£65m to £47m-£55m.
Rank said the performance of its other business segments has “been broadly in line with management’s expectations.”
The group is scheduled to announce its preliminary results for the 12 months ending 30 June 2022 on 18 August.
