The latest profits are out from Rank Group and it’s been disappointing news for the bingo giant. They’ve lost out on some serious profits over the last year, with big changes being made to the landscape of bingo during that time.
Profit Warning for this Year
There has been a profit warning issued for the group, which could potentially signal the fact they’re in hot water. They did have slightly disappointing figures at the mid-year announcement but the CEO seemed confident that they could bring these back up to scratch.
This wasn’t to be though, as the CEO Henry Birch had to notify shareholders that the relevant targets hadn’t been met. He had been cautiously optimistic that the targets would be met by the end of the year, but a huge number of factors had driven the profits down over time.
This CEO has since left to go to Shop Direct, where he will be working with the retailer to improve their own strategy.
Overall, Mecca Bingo halls have been 2% less profitable this year, and Grosvenor Casinos have been 9% less profitable. This is a massive amount when you consider just how much these brands have made in the past. There are millions being lost by these brands for a variety of reasons, and it’s up to those at Rank to figure out why.
The share price for Rank Group fell by 15% on reporting of those figures. This is a big dip for the group and it might prove difficult for them to regain confidence.
Thinking Outside the Box
There have been quite a few changes made and planned at the Rank Group in order to turn their fortunes around. They’ve created a new brand, Luda Bingo, and also partnered up with some younger brands in order to revitalise their offerings.
In the wake of big changes to taxation and dwindling numbers in bingo halls, it’s not surprising that the numbers are down. They’ve also cited some of the bad weather that we have had in the UK as a reason that their players haven’t been heading to the halls.
Their digital business has been growing, but it’s not enough to offset the areas in which their business is declining. This could mean that we see some of their halls close as they cut the areas that aren’t bringing in the cash.
So what does this all mean for players? Although a profit warning might seem a bit scary, we don’t anticipate that Mecca Bingo will be going anywhere anytime soon. They have such a massive presence in the UK bingo landscape that we don’t think they will be moving on anytime soon. While falling profits could be a concern, this may just mean that they end up getting rid of some of their halls.
The efforts to revitalise the brand are definitely an ongoing work, as they make bingo more of a night out again. With cocktails and food being served up in these locations, we can see these being a social destination instead of just a place to play. We hope that Rank Group manage to turn their luck around soon.