Rank Group Plc · LSE:RNK
Rank — The Rank Group — H1 2021/22 Earnings Presentation
32 slides from Rank's earnings presentation, February 2022
Slide 1: Interim results for the six months ended 31 December 2021
The Rank Group Plc Interim results for the six months ended 31 December 2021
Slide 2: Introduction
Introduction John O’Reilly Chief Executive
Slide 3: Recovery is now very much underway
Recovery is now very much underway Underlying LFL operating profit • The Group returned to profitability in H1 with underlying LFL operating profit of £24.1m £24.1m • Good progress across our venues businesses until rising COVID-19 case LFL digital NGR numbers, and resultant restrictions in the UK a
Slide 4: Grosvenor venues – trading well free of restrictions
Grosvenor venues – trading well free of restrictions • £34.9m underlying LFL operating profit, a strong recovery with 6 week rolling NGR venues back open and despite ongoing pandemic restrictions (£k) 7,000 • LFL NGR 18% behind 2019; London down 33%, Rest of UK down 9%. 6,000 5,000 • Increase in COV
Slide 5: Mecca venues – heavily impacted by customer caution
Mecca venues – heavily impacted by customer caution • £1.3m underlying LFL operating loss on revenue down 24% 6 week rolling NGR on 2019 (£k) • Customers visits grew until October, declining through 2,800 November and December as the level of customer caution 2,700 about indoor hospitality increased
Slide 6: Enracha venues – strong performance amid Spain's tougher COVID-19 restrictions
Enracha venues – strong performance amid Spain’s tougher COVID-19 restrictions for hospitality venues • £2.7m underlying LFL operating profit on revenues down 22% on 2019 • Visits down 32% reflecting capacity and opening hour restrictions and proof of vaccination (1) • Spend per visit up 16%, the re
Slide 7: Digital – good progress with meccabingo.com successfully migrated
Digital – good progress with meccabingo.com successfully migrated to our proprietary platform • Digital NGR growth of 7% on H1 2020, UK facing Rank H1 H1 Interactive +7%, Yo/Enracha +7% £m 2021/22 2020/21 Change • UK digital new customer volumes grew 16%; strong growth Mecca 34.9 33.8 3% in Grosveno
Slide 8: Financial and operational performance
Financial and operational performance Simon Hay Interim Chief Financial Officer
Slide 9: Financial headlines
Financial headlines H1 H1 2021/22 2020/21 Change NGR £333.7m £177.6m 88% Underlying operating profit /(loss) (2) £23.7m £(41.8)m - Underlying EPS (2) 3.0p (9.8)p - Net cash/ (debt) pre IFRS 16 £55.1m £(45.2)m - (2) before separately disclosed items • Return to profitability in the period with all ve
Slide 10: Operational review: Venues
Operational review: Venues LFL NGR LFL Operating Profit (3) H1 H1 H1 H1 H1 H1 £m 2021/22 2020/21 2019/20 (4) 2021/22 2020/21 2019/20 (4) Grosvenor 161.6 43.1 198.1 34.9 (20.9) 48.1 Mecca 65.7 38.4 86.3 (1.3) (4.8) 13.8 Enracha 14.1 8.5 18.0 2.7 (0.6) 4.2 LFL Total 241.4 90.0 302.4 36.3 (26.3) 66.1 (
Slide 11: Operational review: Digital
Operational review: Digital LFL NGR LFL Operating Profit (5) • Digital business grew revenues by 7% H1 H1 H1 H1 £m 2021/22 2020/21 2021/22 2020/21 • Grosvenor NGR growth of 18% to £25.8m Grosvenor 25.8 21.9 • Mecca NGR growth impacted by preparation Mecca 34.9 33.8 of migration onto the RIDE proprie
Slide 12: Income statement
Income statement H1 H1 £m 2021/22 2020/21 Operating profit / (loss) 23.7 (41.8) • Underlying effective tax rate: Net financing charge (6.5) (6.5) 19.2% Profit/(loss) before taxation and separately 17.2 (48.3) • Expected underlying tax rate for disclosed items FY 2021/22: 18.0 – 20.0% Separately disc
Slide 13: Separately disclosed items
Separately disclosed items H1 H1 £m 2021/22 2020/21 Transformation and integration costs (1.5) (5.2) • Separately disclosed items Amortisation of acquired intangibles (5.9) (5.9) includes the VAT proceeds of £83.1m (including interest) and Closure of venues (1.2) - reversal of impairments of £10.8m
Slide 14: Cashflow
Cashflow H1 H1 £m 2021/22 2020/21 Net cash generated from /(used in) continuing operations 57.9 (29.9) • No rent and duty deferrals, Net cash generated from SDI 81.7 11.1 supplier payment management back to business as usual Net cash generated from discontinued operations 3.1 1.3 Capital expenditure
Slide 15: Liquidity and full year considerations
Liquidity and full year considerations • Final £50m liquidity test under bank waivers on 31 March 2022, then revert to financial covenants of i) net debt to EBITDA ratio of less than 3x and ii) EBITDA to net interest payable ratio of more than 3x from 30 June 2022 • Dividend capability unlocked once
Slide 16: Strategic Update and Outlook
Strategic Update and Outlook John O’Reilly Chief Executive
Slide 17: Transformation 2.0 – a busy H2 ahead
Transformation 2.0 – a busy H2 ahead Grosvenor Nine refurbishment projects expected Rollout of new New progressive game on ER terminal, venues to complete in H2 table management systems Lucky Lady’s Charm Opening of Mecca Luton – new styled Mecca Investment in bingo value – lower Trial programme of
Slide 18: The UK Government's Gambling Review
The UK Government’s Gambling Review Key regulatory changes sought by Current status the land-based casino and bingo sectors • Harmonisation of 1968 Act casinos with those of the 2005 Act • White paper expected in next few months enabling up to 80 gaming machines, from the current restriction of 20,
Slide 19: ESG
ESG • Publication of Rank’s first Responsible Business Report • Overview of the work undertaken in determining our ESG strategy • Four focus areas – customer experience, colleague experience, environmental management and community engagement • Next stage is to further develop the core initiatives an
Slide 20: Current trading and outlook
Current trading and outlook • COVID-19 restrictions have resulted in soft trading across our venues businesses in the first three weeks of January. The digital business is trading in line with expectations and meccabingo.com has already returned to pre- migration revenue levels • We are well positio
Slide 21: Appendices
Appendices
Slide 22: Group datasheet
Group datasheet H1 FY H1 FY H1 FY 2021/22 2020/21 2020/21 2019/20 2019/20 2018/19 Net gaming revenue (£m) 333.7 329.6 177.6 629.7 391.8 685.5 - YOY growth 88% (48%) (55%) (9%) 13% 1% Operating profit (£m) 23.7 (84.5) (41.8) 49.1 58.7 74.3 - YOY growth 157% (272%) (171%) (35%) 84% (2)% Operating marg
Slide 23: Grosvenor Venues datasheet
Grosvenor Venues datasheet H1 FY H1 FY H1 FY 2021/22 2020/21 2020/21 2019/20 2019/20 2018/19 Casino licences: London 9 9 9 9 9 9 Rest of UK 63 62 62 62 62 61 Total 72 71 71 71 71 70 Non-trading licences 7 7 8 8 8 9 Net gaming revenue (£m) 161.6 79.2 43.1 275.9 198.1 338.2 Operating profit (£m) 34.7
Slide 24: Mecca Venues datasheet
Mecca Venues datasheet H1 FY H1 FY H1 FY 2021/22 2020/21 2020/21 2019/20 2019/20 2018/19 Venues 72 72 76 77 77 82 Revenue (£m) 65.9 55.5 39.0 130.7 91.9 193.5 Operating profit (£m) (1.5) (18.9) (5.3) 6.0 13.7 28.6 Operating margin (%) (2.3) (34.1) (13.6) 4.6 14.9 14.8 Visits (000s) 2,553 1,903 1,347
Slide 25: Enracha Venues datasheet
Enracha Venues datasheet H1 FY H1 FY H1 FY 2021/22 2020/21 2020/21 2019/20 2019/20 2018/19 Revenue (£m) 14.1 17.5 9.0 26.9 18.6 35.3 Operating profit (£m) 2.7 (0.2) (0.6) 3.3 4.2 7.8 Operating margin (%) 19.1 (1.1) (6.7) 12.3 22.6 22.1 25 The Rank Group Plc Interim results for the six months ended 3
Slide 26: Digital datasheet
Digital datasheet H1 FY H1 FY H1 FY 2021/22 2020/21 2020/21 2019/20 2019/20 2018/19 NGR (£m) 92.1 177.4 86.5 196.2 83.2 118.5 Operating profit (£m) 3.7 3.2 1.5 28.7 11.9 23.9 Operating margin (%) 4.0 1.8 1.7 14.7 14.3 20.2 26 The Rank Group Plc Interim results for the six months ended 31 December 20
Slide 27: Balance sheet
Balance sheet At 31 At 30 At 31 At 31 At 30 At 31 December June December December June December 2021 2021 2020 2021 2021 2020 Assets Liabilities Non-current assets Current liabilities Intangible assets 503.6 504.6 514.9 Trade and other payable (144.8) (126.3) (128.4) Property, plant and equipment 11
Slide 28: Net cash/ (debt)
Net cash/ (debt) H1 H1 H1 H1 £m 2021/22 2020/21 £m 2021/22 2020/21 Cash 163.5 82.9 Cash 163.5 82.9 Debt (108.4) (128.1) Undrawn facilities 80.0 55.0 Net cash / (debt) pre IFRS 16 55.1 (45.2) Customer funds (18.7) (9.6) Cash and available facilities 224.8 128.3 H1 H1 £m 2021/22 2020/21 Net cash / (de
Slide 29: LFL revenue reconciliation H1 2021/22
LFL revenue reconciliation H1 2021/22 Grosvenor Mecca International Digital venues venues venues Total LFL revenue (NGR) 92.1 161.6 65.7 14.1 333.5 Add: Mecca closures - - 0.2 - 0.2 Total revenue (NGR) 92.1 161.6 65.9 14.1 333.7 29 The Rank Group Plc Interim results for the six months ended 31 Decem
Slide 30: Operating profit reconciliation
Operating profit reconciliation H1 H1 £m 2021/22 2020/21 LFL underlying operating profit / (loss) 24.1 (41.2) Closed and opened venues (0.4) (0.8) Foreign exchange - 0.2 Underlying operating profit / (loss) 23.7 (41.8) Separately disclosed items 68.5 (11.1) Operating profit / (loss) 92.2 (52.9) 30 T
Slide 31: Tax charge reconciliation
Tax charge reconciliation H1 H1 £m 2021/22 2020/21 Current tax (charge) / credit on underlying (7.3) 2.3 Deferred tax credit on underlying 4.0 6.0 Tax (charge) credit on separately disclosed items (17.3) 1.5 Reported tax (charge) / credit on continuing operations (20.6) 9.8 Current tax (charge) on d
Slide 32: EPS reconciliation
EPS reconciliation H1 H1 pence 2021/22 2020/21 Underlying EPS 3.0 (9.5) Separately disclosed items 15.1 (2.4) EPS 18.1 (11.9) 32 The Rank Group Plc Interim results for the six months ended 31 December 2021