Gambling company Rank Group issued its second profit warning on Friday despite seeing “some improvement” in trading over the last few weeks as the ongoing cost of living crisis continued to weigh on its Grosvenor casinos wing.
Rank now expects group like-for-like underlying operating profits to be in the range of £10.0m to £20.0m, with the main variable being the performance of its Grosvenor unit.
“Due to the high operating leverage within Grosvenor, and its relative importance to the group as a whole, movements in its net gaming revenue will have a significant impact on the group’s operating profit for the year,” said Rank.
Grosvenor trading in Q2 was also said to have been weaker than expected, with weekly average NGR of £5.8m being only marginally ahead of the levels seen in Q1.
Chief executive John O’Reilly said: “Weak consumer confidence and pressure on disposable income is resulting in a tougher than expected trading environment for our UK venues businesses, particularly in Grosvenor where we are seeing customers spending less per visit.
“Whilst we expect these challenges to continue to impact our recovery into the second half of the financial year, we have implemented a series of measures to deliver incremental cost savings and to drive revenues.”
As of 0910 GMT, Rank shares were down 8.58% at 73.41p.
Reporting by Iain Gilbert at Sharecast.com
