Slide 1: Full-year results 2010
_/Rank Group Full-year results 2010
Slide 2: Peter Johnson, chairman
Peter Johnson, chairman 2
Slide 3: Agenda
Agenda Review of financial results Paddy Gallagher, finance director Strategy update Ian Burke, chief executive 3
Slide 4: Paddy Gallagher, finance director
Paddy Gallagher, finance director 4
Slide 5: Financial headlines
Financial headlines • Gross revenue*: £567.8m (2009: £540.0m) • EBITDA**: £92.3m (2009: £83.9m) • Operating profit**: £62.0m (2009: £58.0m) • Adjusted profit before tax**: £55.2m (2009: £48.5m) • Adjusted earnings per share**: 10.2p (2009: 8.9p) • Operating cash flow: £93.1m (2009: £87.3m) • Net deb
Slide 6: Revenue & operating profit
Revenue & operating profit Revenue* Operating profit** £m 2010 2009 2010 2009 Grosvenor Casinos 238.6 220.0 36.0 30.9 Mecca Bingo 234.5 233.0 29.7 32.3 Top Rank España 37.0 36.2 6.8 5.6 Rank Interactive 57.7 50.8 7.9 7.5 Central costs (18.4) (18.3) Group 567.8 540.0 62.0 58.0 * before adjustment for
Slide 7: Operating costs
Operating costs £m 2010 2009 change Employment 188.7 177.8 6.1% Taxes & duties 90.0 85.2 5.6% Direct costs 51.2 49.7 3.0% Property costs 47.1 46.9 0.4% Marketing* 51.9 45.4 14.3% Depreciation 30.3 25.9 17.0% Other 46.6 51.1 (8.8)% Total 505.8 482.0 4.9% • A rise in the number of venues operated and
Slide 8: Grosvenor Casinos
Grosvenor Casinos Revenue* Operating profit** £m 2010 2009 2010 2009 London 94.7 86.9 17.6 13.2 Provinces 127.7 115.9 17.6 16.8 Belgium 16.2 17.2 0.8 0.9 238.6 220.0 36.0 30.9 KPIs Visits (000s) 5,414 4,825 Spend per visit (£) 44.08 45.60 • >1 million active customers, like-for-like revenue up 5.0%
Slide 9: Mecca Bingo
Mecca Bingo £m 2010 2009 Revenue* 234.5 233.0 Operating profit** 29.7 32.3 KPIs Visits (000s) 14,688 14,933 Spend per visit (£) 15.96 15.60 • Changes in the taxation regime affecting bingo and amusements have led to an increase in costs of £1.6m • >900k active customers, up 3.4% on 2009 * before adj
Slide 10: Top Rank España
Top Rank España £m 2010 2009 Revenue 37.0 36.2 Operating profit* 6.8 5.6 KPIs Visits (000s) 2,339 2,310 Spend per visit (£) 15.82 15.67 • Growth in customers and customer visits • 6.2% revenue growth in euros • Economic situation remains challenging • Full smoking ban introduced in January 2011 * be
Slide 11: Rank Interactive
Rank Interactive £m 2010 2009 Bingo & games 42.0 34.3 Casino 5.7 5.1 Poker 1.8 2.9 Sportsbook 8.2 8.5 Revenue* 57.7 50.8 Operating profit 7.9 7.5 • Strong growth from meccabingo.com • International start-up costs incurred in period • Reinvestment of revenue growth in brand promotion * before adjustm
Slide 12: Statutory profit & loss
Statutory profit & loss £m 2010 2009 Adjusted profit before tax 55.2 48.5 Other* (0.7) 0.7 Profit before tax and exceptional items 54.5 49.2 Exceptional items 19.0 2.8 Profit before tax 73.5 52.0 Taxation (24.6) (14.1) Discontinued operations 4.3 0.6 Profit for the period 53.2 38.5 * Includes unwind
Slide 13: Cash flow
Cash flow £m 2010 2009 Continuing operations Cash inflow from operations 93.1 87.3 Capital expenditure (51.6) (34.3) Fixed assets disposals 0.1 1.6 Operating cash inflow 41.6 54.6 Acquisitions and disposals 0.8 (0.3) Receipt (payments) - exceptional costs and provisions 26.4 (17.6) 68.8 36.7 Dividen
Slide 14: Strengthened balance sheet
Strengthened balance sheet 316.9 Group net debt (£m) 2007-2010 316.9 236.6 316.9 Legacy incl. VAT refunds 226.5 71.0 114.1 186.8 123.4 123.4 Operating Capital cashflows expenditure FY 07 FY 08 FY 09 FY 10 FY 07 FY 10 • Sustained reduction in net debt • 63% reduction in net debt from cashflow • 1.3 x
Slide 15: Capital investment to support growth
Capital investment to support growth 2011F £m FY 2010 2009 Grosvenor Casinos 24 – 27 19.4 15.8 Mecca Bingo 15 – 17 22.6 13.0 Top Rank España 4 1.9 1.5 Rank Interactive 6 6.2 3.3 Other 1 1.5 0.7 Total 50 - 55 51.6 34.3 • Estate modernisation; Grosvenor Casinos and Mecca Bingo • >15% pre-tax return on
Slide 16: Current trading
Current trading • 8 week trading period • Growth in customer visits at Grosvenor Casinos and Mecca Bingo • Win margin reduction holds back casinos performance in London • Continued momentum at Rank Interactive • Effect of full smoking ban in Spain 16
Slide 17: Ian Burke, chief executive
Ian Burke, chief executive 17
Slide 18: Review: 2007 to 2010
Review: 2007 to 2010 • Resilient operating performance Group adjusted – steady growth in revenue earnings per share (p) – duty changes affect margin 2007-2010 – operating profit growth in 2010 • Strengthened balance sheet 10.2 – significant reduction in net debt 8.9 – no requirement to refinance 7.4
Slide 19: Grosvenor Casinos 2007-2010
Grosvenor Casinos 2007 - 2010 • Strong increase in customers Grosvenor Casinos revenue (£m) • Sustained margin expansion after 2007-2010 negative effect of 2007/ 2009 duty changes • Sustained investment in assets 238.6 220.0 – £62m capital investment over 209.5 206.2 four years 2007 2008 2009 2010 1
Slide 20: Mecca Bingo 2007-2010
Mecca Bingo 2007 - 2010 • Resilient trading performance Mecca Bingo through recession and duty increases revenue (£m) 2007-2010 • Customer base returned to growth in 2010 • Focus on operational improvements 234.5 240.5 233.0 227.6 • Sustained investment in assets – £66m capital investment over four
Slide 21: Group strategy
Group strategy To achieve sustainable growth in earnings per share by stimulating and meeting growing demand for gaming-based entertainment • Gaming-based entertainment – community & competitive • Multi-channel distribution to leverage brands and scale – trusted brands aimed at distinct customer seg
Slide 22: Brands strategy
Brands strategy Systematic use of data and customer feedback • To inspire service and product improvements – gaming & entertainment – food & drink Capital investment • To extend the reach and broaden appeal of our venues – Grosvenor Casinos – continued roll-out of G Casino format – Mecca Bingo - est
Slide 23: Engagement & insight
Engagement & insight • Engagement - data collection – Play Points rewards now in 13 casinos and eight bingo clubs – 328k Play Points members at 31 December 2010 – 15% of Grosvenor Casino revenue tracked – extensive customer feedback programme to harvest qualitative data • Insight - data analysis – Q
Slide 24: Gaming & entertainment
Gaming & entertainment • Sustained growth in gaming revenue Gaming revenue (£m) since 2008 2007-2010 • Electronic gaming – >15,000 electronic gaming positions – closed and wide area mobile gaming 520.2 497.2 493.3 482.0 • More entertainment – greater use of exclusive branded content to create differ
Slide 25: Food & drink
Food & drink • Sustained growth in food & drink Group food & drink revenue since 2008 revenue (£m) 2007-2010 • Now accounts for >8% of Group revenue • Table service extended from 16 to 63 Mecca Bingo clubs 47.6 42.8 41.1 • Continued menu improvements across 40.2 Grosvenor Casinos and Mecca Bingo 200
Slide 26: Grosvenor Casinos - capital investment
Grosvenor Casinos - capital investment G Casino - the story so far • Launched in 2006 to broaden appeal of casino as a leisure venue – eye-catching venues in high profile sites – broad range of gaming and non-gaming activities Thanet – hospitality rather than compliance model of service • c£43m aggr
Slide 27: Grosvenor Casinos
Grosvenor Casinos Provincial casinos Variance Customer visits / wk 3,637 2,307 58% Spend per visit (£) 30.82 31.94 (4)% Revenue (£k) / wk 112.1 73.7 52% EBITDA (£k) / wk 29.2 16.8 74% EBITDA margin (%) 26.0 22.8 14% 27
Slide 28: Grosvenor Casinos - capital investment
Grosvenor Casinos - capital investment Development The ‘G Casino’ model 2010 (number of casinos) 2006-2012 • Growth in G Casino from ten to 13 casinos 20 – three conversions 16 2011 onwards • Target remains at least 20 13 10 G Casinos by FY 2012 – one new-build and at 6 least two conversions 1 4 pla
Slide 29: Mecca Bingo - capital investment
Mecca Bingo - capital investment Mecca Full House – the story so far • Launched in 2009 to modernise female-friendly social gaming – vibrant venues in community locations – zoning to create different environments and atmospheres – broad range of gaming and non-gaming activities • Brand development –
Slide 30: Mecca Bingo - capital investment
Mecca Bingo - capital investment Full House Destination Customer visits per week • Positive customer response − strong uplift in customers, customer visits and revenue 4,198 • Capital and operating costs too high – improved service model to lower operating costs 2,667 – review of build costs in 2011
Slide 31: Brand strength
Brand strength • Strong brands becoming increasingly significant assets • Cross channel operational integration • Mecca brand growth 3% – driven by online growth • Further opportunity for cross sell between channels 31
Slide 32: Brand channel crossover
Brand channel crossover Mecca % of land based customers - playing online 15% - playing online with Mecca 6% % of RI remote channel bingo customers playing land based Mecca 32% Grosvenor • Remote channels - area of unrealised opportunity Opportunities in • Spain and Belgium Source: Mecca Bingo estima
Slide 33: Summary
Summary • Rank well-placed to grow as market dynamics shift – regulation & taxation • Land-based brands and scale of customer base provides source of competitive advantage in remote channels – technology driving convergence – brand trust value – substantial cross-sell opportunity • Investment in our
Slide 34: Appendices
Appendices 34
Slide 35: Group data sheet H1 v H2
Group data sheet H1 v H2 Operating profit* £m H2 2010 H2 2009 change H1 2010 H1 2009 change Grosvenor Casinos 18.4 16.2 13.6% 17.6 14.7 19.7% Mecca Bingo 13.7 13.3 3.0% 16.0 19.0 (15.8)% Top Rank España 3.8 2.9 31.0% 3.0 2.7 11.1% Rank Interactive 5.6 4.5 24.4% 2.3 3.0 (23.3)% Central costs (8.1) (9
Slide 36: Grosvenor Casinos data sheet
Grosvenor Casinos data sheet £m FY 2010 H1 2010 FY 2009 H1 2009 FY 2008 H1 2008 Casino licences London 5 5 5 5 5 5 Provinces 31 30 30 28 27 27 Belgium 2 2 2 2 2 2 Total 38 37 37 35 34 34 Unused licences (GB) 11 12 12 13 13 13 Revenue (£m) 238.6 116.6 220.0 106.7 206.2 102.2 EBIT (£m) 36.0 17.6 30.9
Slide 37: Mecca Bingo data sheet
Mecca Bingo data sheet £m FY 2010 H1 2010 FY 2009 H1 2009 FY 2008 H1 2008 Clubs 103 103 103 103 102 102 Revenue (£m) 234.5 118.7 233.0 116.3 227.6 116.9 EBIT (£m) 29.7 16.0 32.3 19.0 37.9 22.7 Operating margin 12.7% 13.5% 13.9% 16.3% 16.7% 19.4% Customers MAT (000s) 911 943 881 912 898 984 Customer
Slide 38: Top Rank España data sheet
Top Rank España data sheet £m FY 2010 H1 2010 FY 2009 H1 2009 FY 2008 H1 2008 Clubs 11 11 11 11 11 11 Revenue (£m) 37.0 18.4 36.2 18.1 35.8 17.7 EBIT (£m) 6.8 3.0 5.6 2.7 6.9 4.1 Operating margin 18.4% 16.3% 15.5% 14.9% 19.3% 23.2% Customers MAT(000s) 331 341 314 316 323 330 Customer visits (000s) 2
Slide 39: Rank Interactive data sheet
Rank Interactive data sheet £m FY 2010 H1 2010 FY 2009 H1 2009 FY 2008 H1 2008 Bingo/games 42.0 19.8 34.3 16.4 29.7 14.7 Casino 5.7 3.0 5.1 2.4 5.5 2.6 Poker 1.8 1.0 2.9 1.7 3.8 2.0 Sportsbook 8.2 3.6 8.5 4.4 13.6 7.7 Revenue (£m) 57.7 27.4 50.8 24.9 52.6 27.0 EBIT (£m) 7.9 2.3 7.5 3.0 7.6 3.5 Opera
Slide 40: Exceptional items data sheet
Exceptional items data sheet (£m) 2010 2009 Continuing operations: Impairment charges (inc. £11.2m charge on Belgian casino concessions) (12.7) (1.5) Impairment reversals 3.2 - Net /(charge)/release relating to onerous leases (13.5) 1.0 VAT agreement costs (4.6) - VAT partial exemption 4.5 - Restruc
Slide 41: Casinos market supply (February 2011)
Casinos market supply (February 2011) Operating Non-operating Total Operator Clubs licenses licenses Genting Stanley 46 9 55 Grosvenor Casinos 37 10 47 Gala 28 3 31 Caesar’s / London Clubs 10 0 10 A&S Leisure 6 0 6 Aspers / Aspinall’s 4 1 5 Club 36 3 0 3 Clockfair 2 0 2 Guoco 1 5 6 Independents 13 9
Slide 42: Bingo clubs market supply (February 2011)
Bingo clubs market supply (February 2011) Operator Clubs Gala Bingo 144 Mecca Bingo 103 Top Ten Bingo 22 Carlton Clubs 14 Buckingham Bingo 8 Others 194 Total 485 42