Rank Group Plc · LSE:RNK
Rank — The Rank Group — FY2022 Earnings Presentation
33 slides from Rank's earnings presentation, Jun 30, 2022
Slide 1: Preliminary results for the 12 months ended 30 June 2022
The Rank Group Plc Preliminary results for the 12 months ended 30 June 2022
Slide 2: Introduction
Introduction John O’Reilly Chief Executive
Slide 3: A tough year but well positioned for growth
A tough year but well positioned for growth • Underlying operating profit (1) of £40.4m for the year ended 30 June 2022 (loss of Underlying operating profit £82.4m in 2020/21) £40.4m • H2 operating profit (1) of £16.3m compared with £24.1m in H1, reflecting the weak performance in Grosvenor venues,
Slide 4: Grosvenor venues
Grosvenor venues A weak H2 but now showing early signs of recovery • NGR of £296.6m was 19% down on calendar year 2019. Monthly visits London down 27%, Rest of UK down 13% 350,000 100,000 • Good progress in H1 slowed with the onset of Omicron in Q2. 90,000 Trading soft throughout H2 with visitor num
Slide 5: Mecca venues
Mecca venues Very slow recovery post the pandemic • Slowly improved through the year but remain well below 6 week rolling NGR pre-pandemic levels (£k) • Visitor volumes were down 32% on calendar year 2019, 2,800 with revenues down 24% 2,700 • Good volumes of new customers, but not sufficient to 2,60
Slide 6: Enracha venues
Enracha venues Strong revenue and profit recovery • Recovered strongly with revenues down just 5% on calendar year 2019 NGR growth FY22 compared to CY 2019 • Visitor numbers were down 33% on calendar year 2019 reflected in bingo 10% revenue falling 20% 5% • Machine revenues grew 6% on calendar year
Slide 7: Digital
Digital Good progress across technology, revenue growth and operating profit • Digital NGR growth of 4% YOY £m 2021/22 2020/21 Change • Grosvenor revenue grew 7% supported by strong cross-channel Mecca 66.9 68.7 (3)% customer revenue growth Grosvenor 49.8 46.5 7% • Mecca declined 3% with performance
Slide 8: Financial and operational performance
Financial and operational performance Richard Harris Chief Financial Officer
Slide 9: Financial highlights
Financial highlights Recovery underway but still much to do LFL Net Gaming Revenue LFL Underlying LFL Net Gaming Revenue (% of pre-COVID levels) Operating Profit £644.0m Group: 90% £40.4m PY: £325.3m Venues: 81% PY: £(82.4)m Underlying EPS Net Free Cash Flow Net Cash / (Debt) (3) 4.3p £60.8m £19.1m
Slide 10: Net gaming revenue
Net gaming revenue Improving revenue trend seen since year-end Average weekly Group NGR (£m) Q1: Encouraging start to trading in the first full quarter post re-opening 13.1 12.6 12.5 Q2: Improving trends seen early in the quarter but reintroduction of 12.0 social distancing measures and operating re
Slide 11: Income statement
Income statement Profit for the year driven by reopening of venues and benefiting from VAT rebate £m 2021/22 2020/21 LFL underlying operating profit / (loss) 40.4 (82.4) • Closed clubs & FX in FY22 relates to the closure of Closed clubs and FX (0.6) (2.1) one Enracha venue in Spain Underlying operat
Slide 12: Separately disclosed items
Separately disclosed items £m 2021/22 2020/21 Continuing operations VAT claim – net of costs 77.1 - Impairment charges (47.8) - Impairment reversal 22.0 - Property related provision 10.4 (0.2) Amortisation of acquired intangible assets (11.7) (11.8) Closure of venues (4.7) (2.1) Integration costs (2
Slide 13: Cash Flow and Net Debt
Cash Flow and Net Debt Strong cash position provides protection and flexibility Cash flow £m 2021/22 2020/21 (£m) Opening net (debt) (pre-IFRS 16) (49.8) (57.0) Net free cash flow 60.8 (85.7) Business acquisition and other (0.7) (0.4) Cash flows in relation Business disposal 8.8 25.2 to SDI’s Issue
Slide 14: Liquidity and Debt Maturity
Liquidity and Debt Maturity £m 2021/22 2020/21 Debt Maturity Profile (£m) Cash and cash equivalents 97.9 69.6 180 Undrawn facilities 80.0 44.0 Customer funds (17.8) (15.6) 150 Total cash and available facilities 160.1 98.0 120 • Total cash and available facilities improved by £62m 90 • Additional fa
Slide 15: Operating Costs
Operating Costs Specific external factors influencing FY23 THEME IMPACT MITIGATION 01 Energy price inflation See next slide Leverage economies of scale in procurement 02 Pay review October 21 (delayed due to Energy efficiency programmes pandemic); Pay review April 22; Wage inflation Combined effect
Slide 16: Operating Costs: energy price inflation
Operating Costs Energy price inflation remains a significant headwind £/MWh 620 • Relatively stable electricity prices seen for a number of years. Group energy costs of £12.9m in CY19 520 • Re-opening of global economies post pandemic resulted in the first step up in energy prices 420 • Near doublin
Slide 17: Guidance for FY23
Guidance for FY23 • Total capital expenditure approximately £40m • Underlying effective tax rate of between 16-18% • Term Loan repayment of £34.4m in May 2023 • Interest charge for the year £13m • Clarity on payment of dividends at interim results 17 The Rank Group Plc Preliminary results for the 12
Slide 18: Strategic Update and Outlook
Strategic Update and Outlook John O’Reilly Chief Executive
Slide 19: Our Purpose and our Strategic Pillars
Our Purpose and our Strategic Pillars To deliver exciting and entertaining experiences in safe, sustainable and rewarding environments. We will achieve this through reflecting the changing needs and expectations of our customers, communities and colleagues – To excite and to entertain 1. Provide sea
Slide 20: Transformation 2.0 – H1 initiatives
Transformation 2.0 – H1 initiatives Roll out of Lucky Lady’s Charm, Launch of Roulette Gold, a live table Grosvenor progressive jackpot electronic roulette progressive jackpot game linked across 6 casino refurbishment projects. venues game. the Grosvenor estate. Broadening the Max proposition with G
Slide 21: ESG
ESG Good progress made across our four areas of focus and key performance indicators now in place COLLEAGUES CUSTOMERS COMMUNITIES ENVIRONMENT New EVP rolled out across New data driven risk Carers Trust partnership Engaged with third party Grosvenor venues model to help Grosvenor extended for anothe
Slide 22: Delays to the UK Government’s Gambling Review
Delays to the UK Government’s Gambling Review Key regulatory changes sought by Current status the land-based casino and bingo sectors • Publication of the Government’s white paper • Harmonisation of 1968 Act casinos with those of the 2005 Act enabling delayed until a new Secretary of State and up to
Slide 23: Current trading and outlook
Current trading and outlook First seven weeks of 2022/23 • Overall, Group underlying NGR is running 3% ahead Underlying Digital NGR is growing 12%, with venues down 1% Grosvenor venues down 4% YOY, but 11% ahead of 2021/22 Q4 run rate as the gradual return of overseas customers to our London casinos
Slide 24: Appendices
Appendices
Slide 25: Transformation 2.0 – achievements
Transformation 2.0 – achievements Refurbishments completed Electronic roulette cross venue Grosvenor in Huddersfield, Bristol, Blackpool and New concept venue opened at Glasgow progressive jackpot game, Lucky Lady’s venues Merchant City. Walsall. Charm, developed and piloted. Focus on value with low
Slide 26: Group datasheet
Group datasheet H1... H1... H1... 2021/22 2021/22(4) 2020/21(4) 2020/21(4) 2019/20(4) 2019/20(4) Net gaming revenue (£m) 644.0 333.7 329.6 177.6 629.7 391.8 - YOY growth 95% 88% (48%) (55%) (9%) 13% Operating profit (£m) 39.8 23.7 (84.5) 41.8 49.1 58.7 - YOY growth 147% 157% (272%) (171%) (35%) 84%
Slide 27: Digital datasheet
Digital datasheet H1 H1 H1 2021/22 2021/22 2020/21 2020/21 2019/20 2019/20 NGR (£m) 183.3 92.1 177.4 86.5 196.2 83.2 Operating profit (£m) 18.7 3.7 3.2 1.5 28.7 11.9 Operating margin (%) 10.2 4.0 1.8 1.7 14.7 14.3 27 The Rank Group Plc Preliminary results for the 12 months ended 30 June 2022
Slide 28: Grosvenor datasheet
Grosvenor datasheet H1 H1 H1 2021/22 2021/22 2020/21 2020/21 2019/20 2019/20 Casino licences: London 9 9 9 9 9 9 Rest of UK 63 63 62 62 62 62 Total 72 72 71 71 71 71 Non-trading licences 7 7 7 8 8 8 Net gaming revenue (£m) 296.6 161.6 79.2 43.1 275.9 198.1 Operating profit (£m) 45.1 34.7 (40.7) (21.
Slide 29: Mecca datasheet
Mecca datasheet H1 H1 H1 2021/22 2021/22 2020/21 2020/21 2019/20 2019/20 Venues 71 72 72 76 77 77 Revenue (£m) 134.0 65.9 55.5 39.0 130.7 91.9 Operating profit (£m) (0.8) (1.5) (18.9) (5.3) 6.0 13.7 Operating margin (%) (0.6) (2.3) (34.1) (13.6) 4.6 14.9 Visits (000s) 5,260 2,553 1,923 1,347 5,780 3
Slide 30: Enracha venues datasheet
Enracha venues datasheet H1 H1 H1 2021/22 2021/22 2020/21 2020/21 2019/20 2019/20 Revenue (£m) 30.1 14.1 17.5 9.0 26.9 18.6 Operating profit (£m) 7.5 2.7 (0.2) (0.6) 3.3 4.2 Operating margin (%) 24.9 19.1 (1.1) (6.7) 12.3 22.6 30 The Rank Group Plc Preliminary results for the 12 months ended 30 June
Slide 31: Balance sheet
Balance sheet At 30 June At 30 June At 30 June At 30 June 2022 2021 2022 2021 Assets Liabilities Non-current assets Current liabilities Intangible assets 493.6 504.6 Trade and other payable (131.1) (126.3) Property, plant and equipment 113.1 117.4 Lease liabilities (40.4) (42.2) Right-of-use assets
Slide 32: Operating profit reconciliation
Operating profit reconciliation £m 2021/22 2020/21 LFL underlying operating profit / (loss) 40.4 (82.4) Closed and opened venues (0.6) (2.0) Foreign exchange - (0.1) Underlying operating profit / (loss) 39.8 (84.5) Separately disclosed items 42.3 (8.4) Operating profit / (loss) 82.1 (92.9) 32 The Ra
Slide 33: Tax charge reconciliation
Tax charge reconciliation £m 2021/22 2020/21 Underlying current tax (charge) / credit (9.6) 8.0 Deferred Tax 3.2 2.1 Tax on separately disclosed items (10.5) 0.3 Reported tax (charge) / credit (16.9) 10.4 33 The Rank Group Plc Preliminary results for the 12 months ended 30 June 2022