Rank Group Plc · LSE:RNK
Rank — The Rank Group — FY2023 Earnings Presentation
32 slides from Rank's earnings presentation, September 2023
Slide 1: Preliminary results for the 12 months ended 30 June 2023
The Rank Group Plc Preliminary results for the 12 months ended 30 June 2023
Slide 2: Introduction
Introduction John O’Reilly Chief Executive
Slide 3: Overview
Overview We enter 2023/24 with a growing momentum • A stronger second half performance delivering full year underlying LFL Underlying LFL operating profit operating profit of £20.3m (H1 £4.2m), in line with April guidance £20.3m • Improving revenue and profitability within the UK venues businesses a
Slide 4: Grosvenor venues
Grosvenor venues Revenues improving, cost pressures easing • LFL NGR of £306.3m was up 4% against the prior year; H1 NGR declined 5%, Weekly average NGR H2 NGR grew 15% • London LFL NGR flat on the prior year with Rest of UK growing 6% £6.5m • International customers not returning to London at pre-p
Slide 5: Mecca venues
Mecca venues Shaping for profitability • The UK land-based bingo market shrunk as a consequence of pandemic NGR variance by quarter lockdowns resulting in there being too many venues v CY 2019 • Strong volumes of new customers, but not sufficient to offset the sharp 21/22 22/23 23/24 post-lockdown d
Slide 6: Enracha venues
Enracha venues Continued strong revenue growth • LFL NGR grew 19% to £36.4m with strong gaming machine revenue growth of 25% and bingo up 10% • Customer visits grew 16% • Continued development in machine areas, TiTo, jackpot displays, customer loyalty card • Underlying LFL operating profit of £9.1m,
Slide 7: Digital
Digital Continuing to make good progress NGR / £m 2022/23 2021/22 Change • Digital LFL NGR of £202.9m, up 10% yoy Mecca 72.6 66.9 9% • Underlying LFL operating profit grew 3% to £13.8m Grosvenor 57.0 49.8 14% Other UK brands 43.1 41.0 5% • All Rank brands now operating on our proprietary technology
Slide 8: Financial and operational performance
Financial and operational performance Richard Harris Chief Financial Officer
Slide 9: Performance in line with updated guidance
Performance in line with updated guidance LFL Net Gaming Revenue LFL Underlying Operating Profit Underlying EPS £679.7m £20.3m 1.2p 2021/22: £633.2m 2021/22: £42.5m* 2021/22: 4.0p* Net Free Cash Flow Net (Debt) Cash (pre-IFRS 16) £(20.3)m £(3.9)m 30 June 2022: £59.5m* 30 June 2022: £16.9m* * Restate
Slide 10: LFL underlying operating profit impacted by significant cost pressures
LFL underlying operating profit impacted by significant cost pressures £m • LFL Revenue growth of 7% converts to £18.5m of operating profit • Savings in depreciation due to 9.4 impairments • Employee costs include 10% wage 18.5 (18.4) inflation across the Group (5.4) • 23% increase in energy costs (
Slide 11: Stronger H2 revenue performance flows through into improved profit delivery
Stronger H2 revenue performance flows through into improved profit delivery H1 2022/23 H2 2022/23 2022/23 LFL average revenue per week £13.0m £13.2m £13.1m Growth on last year 2% 13% 7% LFL underlying operating profit £4.2m £16.1m £20.3m Growth on last year -83% -9% -52% • Disappointing H1 performan
Slide 12: Income statement
Income statement .. • Non-LFL clubs is the loss generated by £m 2022/23 2021/22* the 15 Mecca venues and one Grosvenor LFL underlying operating profit 20.3 42.5 casino we closed in the year Non LFL clubs and FX (1.2) (4.0) • Financing charge of £12.3m comprises Underlying operating profit 19.1 38.5
Slide 13: Separately disclosed items
Separately disclosed items £m 2022/23 2021/22 Continuing operations Impairment charges (118.9) (47.8) • Impairment charges of £118.9m split £61.5m in Impairment reversal 6.6 22.0 Mecca, £53.3m in Grosvenor and £4.1m in Enracha. Amortisation of acquired intangible assets (8.6) (11.7) Majority of the
Slide 14: Investment in the business to drive sustainable profit improvement
Investment in the business to drive sustainable profit improvement 2022/23 2021/22* Cash flow £m Opening net cash (debt) (pre-IFRS 16) 16.9 (50.7) Net free cash flow (20.3) 59.5 Business disposal - 8.8 58.0 Payment of contingent consideration (0.5) (0.7) Closing net (debt) cash (pre-IFRS 16) (3.9) 1
Slide 15: Liquidity
Liquidity ’Amend and Extend’ of existing facilities recently completed Total committed facilities £m • Amend and extend of existing facilities completed with incumbent lenders – average 9 months extension 120 • £100m revolving credit facilities in place until November 2024, 100 reducing to £75m unti
Slide 16: Financial Guidance for 2023/24
Financial Guidance for 2023/24 • Positive revenue and profit momentum across all businesses • Energy costs: more proactive approach to fixing the price of energy – Expected costs in 2023/24 are £20m, down from £28.6m in 2022/23 – 70% hedged for the full year, 90% for H1 • Wage costs: pressures are e
Slide 17: Strategic Update and Outlook
Strategic Update and Outlook John O’Reilly Chief Executive
Slide 18: The UK Government's gambling review
The UK Government’s gambling review Delivering vital reforms to UK land-based casinos and bingo • White paper published 27 April outlining 62 public policies for reforms to gambling legislation and regulation • We expect gaming machine allocations to result in the Grosvenor estate doubling its estat
Slide 19: Transformation 2.0: H1 2023/24 initiatives
Transformation 2.0 H1 2023/24 initiatives Grosvenor Preparation for legislative changes for Five external refurbishments Sports betting trial at Grosvenor Luton machine allocations, sports betting and venues electronic payments Mecca Refurbishment of ten gaming machine Six external refurbishments Ro
Slide 20: ESG highlights
ESG highlights Customers • Development of new bespoke Central Engagement Platform in progress – provides colleagues with single customer data platform • Significant investment in employee training with over 1,200 employees across UK operations receiving in-depth enhanced safer gambling training Coll
Slide 21: Current trading and outlook
Current trading and outlook A strong start to 2023/24 First six weeks of 2023/24 • Overall Group LFL NGR is up 16% yoy • Grosvenor venues up 17% with visits up 13%. London continues to lag growth seen across the Rest of UK • Mecca venues is seeing strong trading with NGR up 17% • Enracha venues also
Slide 22: Appendices
Appendices
Slide 23: Transformation 2.0: 2022/23 achievements
Transformation 2.0 2022/23 achievements Grosvenor Four refurbishments completed Launch of ‘Going For Gold’, a progressive Introduction of a customer risk app to venues electronic roulette game support player protection in venues Mecca Introduction of two new bingo products, Successful trial of new g
Slide 24: Centrally managed costs
Centrally managed costs Now allocated to the business they support LFL underlying Central LFL underlying LFL underlying Central LFL underlying 2022/23 profit (loss) before cost profit (loss) post 2021/22 profit (loss) before cost profit (loss) post Business Unit cost allocation allocation cost alloc
Slide 25: Group datasheet
Group datasheet H1... 2021/22 H1... 2020/21(1) H1... 2022/23 2022/23 restated 2021/22(1) restated… 2020/21(1) 2019/20(1) Net gaming revenue (£m) 681.9 338.9 644.0 333.7 329.6 177.6 629.7 - YOY growth 6% 2% 95% 88% (48%) (55%) (9%) Operating profit (£m) 19.1 3.2 38.5 23.1 (85.4) (41.8) 49.1 - YOY gro
Slide 26: Digital datasheet
Digital datasheet H1 H1 2021/22 2021/22 2020/21 H1 2022/23 2022/23 restated restated restated 2020/21 2019/20 NGR (£m) 202.9 100.8 183.3 92.1 177.4 86.5 196.2 Operating profit 18.8 10.0 17.4 3.7 2.3 1.5 28.7 pre central allocation costs (£m) Operating margin 9.3 9.9 9.5 4.0 1.3 1.7 14.7 pre central
Slide 27: Grosvenor datasheet
Grosvenor datasheet H1 2021/22 H1 H1 2022/23 2022/23 restated 2021/22 2020/21 2020/21 2019/20 Casino licences: London 9 9 9 9 9 9 9 Rest of UK 62 62 62 63 62 62 62 Total 71 71 71 72 71 71 71 Non-trading licences 7 7 7 7 7 8 8 Net gaming revenue (£m) 306.3 153.4 296.6 161.6 79.2 43.1 275.9 Operating
Slide 28: Mecca datasheet
Mecca datasheet H1 2021/22 H1 H1 2022/23 2022/23 restated 2020/21 2020/21 2020/21 2019/20 Venues 56 64 71 72 72 76 77 Revenue (£m) 136.3 67.0 134.0 65.9 55.5 39.0 130.7 Operating profit (loss) 2.8 (1.2) (0.8) (1.5) (18.9) (5.3) 6.0 pre central costs allocation (£m) Operating margin 2.1 (1.8) (0.6) (
Slide 29: Enracha venues datasheet
Enracha venues datasheet H1 H1 H1 2022/22 2022/23 2021/22 2021/22 2020/21 2020/21 2019/20 Revenue (£m) 36.4 17.7 30.1 14.1 17.5 9.0 26.9 Operating profit 9.2 4.0 7.5 2.7 (0.2) (0.6) 3.3 pre central allocation costs (£m) Operating margin 25.3 22.6 24.9 19.1 (1.1) (6.7) 12.3 pre central allocation cos
Slide 30: Balance sheet
Balance sheet At 30 June At 30 June At 30 June 2022 At 30 June 2022 £m 2023 Restated £m 2023 Restated Assets Liabilities Non-current assets Current liabilities Intangible assets 456.8 495.5 Trade and other payable (134.3) (131.1) Property, plant and equipment 97.5 111.2 Lease liabilities (42.2) (40.
Slide 31: Operating profit reconciliation
Operating profit reconciliation H1 H1 £m 2022/23 2022/23 2021/22 LFL underlying operating profit 20.3 4.2 24.9 FX, closed and re-opened venues (1.2) (1.0) (1.8) Underlying operating profit 19.1 3.2 23.1 Separately disclosed items (128.9) (104.2) 79.3 Operating (loss) profit (109.8) (101.0) 102.4 31
Slide 32: Tax charge reconciliation
Tax charge reconciliation H1 H1 £m 2022/23 2022/23 2021/22 Underlying current tax charge (0.6) (1.3) (7.3) Deferred tax credit - 0.2 4.0 Tax on separately disclosed items 27.7 7.0 (17.3) Reported tax credit (charge) 27.1 5.9 (20.6) 32 The Rank Group Plc Preliminary results for the 12 months ended 30