Rank reveals digital and Grosvenor venues growth in Q1
Rank Group has reported a year-on-year increase in gross gaming revenue (GGR) for the three months to 30 September 2019, the first quarter of its fiscal year, after it was boosted by growth in its digital arm and Grosvenor Casino land-based business.
GGR climbed 8% on a like-for-like basis in the first quarter of Rank’s 2019-20 financial year, while like-for-like net gaming revenue (NGR), which represents GGR less player incentives, was up 10%.
Initial figures released by Rank show its digital arm was the driving force behind growth in Q1, with digital GGR up 15% and NGR 16%. This included NGR growth of 27% within the Grosvenor digital operation, while higher average revenue per user helped to drive Mecca digital’s NGR up by 14% in the quarter.
However, Rank cited its Grosvenor Casino land-based operation as the stand-out performance of the quarter, with GGR up 10% year-on-year and NGR rising 15%.
Rank said Q1 is seasonally the strongest quarter for Grosvenor and was lapping weak comparatives. It noted strong win margins across all of its products, with all gaming product areas delivering revenue growth.
The operator said its electronic roulette operations continued to benefit from investments it has made to the machine estate, together with the regulatory changes on B2 staking limits, while it also saw strong volumes in table handle and continued growth in gaming machine revenue.
In comparison, Mecca venues revenue remained level on a like-for-like, year-on-year basis, with lower customer visits offset by a higher spend per visit, while its international venues performed in line with expectations and posted both GGR and NGR of 4% for the quarter.
“We are pleased with the growth achieved across our businesses in this key part of our financial year, as well as with the ongoing progress we are making with our transformation programme,” Rank chief executive John O’Reilly said.
Rank also referenced the acquisition of Stride Gaming, which it completed last week in a deal worth £115.3m (€132.4m/$146.0m).
Setting out the reasons behind the purchase, Rank said its operations and Stride are highly complementary businesses, creating a leading multi-channel operator with genuine digital scale
Rank also said migration to Stride's proprietary technology platform will boost operational control and technology capability, while the acquisition will bolster its existing digital leadership team, as well as create an attractive financial profile with strong operational and revenue synergy opportunities.
Noting Stride’s recent performance, Rank said Q1 NGR at the business was down 15% year-on-year to £16.3m, primarily due to lower customer acquisition volumes and reduced margins in the period. However, Rank said it is confident that it will deliver all of the benefits outlined when the deal was announced.
“The acquisition of Stride marks a pivotal moment in the development of our digital offering and having completed on 4 October, we are now starting the execution of all our plans for integration and delivery of synergy benefits,” O’Reilly said.