24th of August 2018 Author: Alex Hoffmann
The company behind Mecca Bingo, Rank Group, has had a tough business year, stating that its pre-tax profits dropped over 40%. The UK gambling giant is experiencing low performance at all Grosvenor Casinos, as well as physical bingo halls.
After facing a couple of challenging months, including a profit warning in April 2018, the group appointed new chief executive, John O' Reilly, in May. Despite setting a world record for having the largest game of office bingo, Mecca is facing a real downfall in pre-tax profits, confirming a decline over a 12-month period for more than £46.7 million. In addition, the company's revenues fell close to 2.3% or £691 million. Consequently, shares plummeted 6% in early trade in London...
Fall Caused By Numerous Factors:
The group's chain of gambling establishments, Grosvenor, claims that the drop in revenues is caused by a number of factors. The main cause for losing £373 in income is due to "enhanced customer due diligence," tough requirements from UKGC and stringent audits of players. Moreover, the company has recorded lower win margins from high rollers, plus impairment charges worth £26.7 million.
After closing a venue in Bradford, Mecca's profits fell for additional 2.6 percent or £208.1 million. Nevertheless, the operator's online division continued to score positive results, extending sales up to £122.5 million.
A Turnaround Plan:
O'Reilly remains certain that the company will increase its performance in the next 12 months, predicting a rise in pre-tax revenues of £78.1 million. Rank Group is working on a long-term plan to renew its focus on digital and better cost control. He also added that the main reason for joining the concern lies in its underlying potential, and that redefining key priorities will help the company get back on the track.
Source: Ahmed, Murad. "Mecca Bingo owner sees profits fall 40% after 'challenging year' " . August 16, 2018.
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