New Rank CEO unveils revival plan
New Rank Group chief executive John O’Reilly has unveiled a four-part plan of action to revive its fortunes after revealing that a series of operational errors led to a disastrous set of financial results.
The gaming group, which owns Grosvenor Casinos and Mecca Bingo, saw a fall in revenue, profits and other key indicators during the year to the end of June 2018.
O’Reilly (pictured), just 14 weeks into his new job, described a “challenging year” in which revenue was down at both its major brands’ brick-and-mortar premises.
The former Ladbrokes and Gala Coral executive also opined the “self-inflicted pain” which caused the company’s digital business to lose momentum, with revenue up by 9.9% - compared to 15% last year – and operating profit down by around 8% to £20.9m, compared to a 63% rise in 2017. In particular, the group’s failure to prepare and execute changes to due diligence and data regulations caused a serious downturn in digital performance during the second half of the year. Digital was actually up 17% at the end of H1.
O’Reilly, who replaced Henry Birch in May, also noted that marketing “was cut back when we should have been doing the reverse”.
“Rank’s performance isn’t good enough,” said O’Reilly, in a call with investors after the release of the results.
O’Reilly said he believes there is nothing wrong with Rank’s strategy, but said it needs “a stronger operational focus”. It will seek to increase its focus on the customer, grow its digital business, drive cost efficiencies and improve organisational capability
The changes will be led by new chief transformation officer, Jim Marsh, while the company also this week announced the arrival of chief information officer Jonathan Greenstead, a digital transformational and restructuring specialist formerly with Travelodge.
Rank will seek to revive its Grosvenor and Mecca digital platforms with the introduction of an omni-channel service in the second half of the year, which will finally give members who visit brick-and-mortar venues an “incentive” to play Rank’s games online.
It also outlined plans for increasing marketing investment and new products. It will focus more on data-driven learning about its customers, while a new content management system will improve its real-time product and service offering.
Improvements in organisational capability will be key for Rank, with O’Reilly outlining how failures to prepare for changes to due diligence regulations led to it being unable to allow many high-rolling customers to play during the year. This also led to problems with customer contact, with the company not able to communicate with many members for a period.
O’Reilly said: "I joined Rank because of its underlying potential. With the backdrop of a disappointing performance in 2017/18, we are now moving quickly to identify the key priorities which will begin to realise the significant underlying potential that I have now seen first-hand since joining the Group in early May."