Bad Weather Hurts Rank’s Revenues

Bad Weather Hurts Rank's RevenuesMany businesses are highly susceptible to weather conditions and in the UK bingo halls can be affected by adverse weather. About two years ago a series of severe arctic storms hit the UK making travel all but impossible in most areas of the country. Attendance at live bingo games plummeted but online bingo sites experienced a rapid rise in player numbers. In face some online bingo operators were able to post record first quarter figures thanks to the storms.

This year bad weather has hit again and Mecca bingo halls suffered from dwindling player numbers. Foot traffic at Rank’s Mecca bingo halls fell by 7% for the 18 weeks leading up to May 5th. Management blamed the weather for the drop in traffic. Nicholas Batram, an analyst at Peel Hunt, told reporters “The snow clearly had an impact, especially in bingo, given the demographic base.” It wasn’t all bad news for Rank; the increasing popularity of Rank’s online bingo operations pushed revenues up by 2%. Ian Burke, chairman and chief executive of Rank, stated “Unsurprisingly, our venues were affected by the persistent freezing weather conditions during the third quarter. Against that backdrop, we feel our businesses have performed reasonably well.”

Rank management said that full year results will be “marginally below” last year’s figures. Recently Rank completed a deal that made the company the largest casino operator in the UK. Rank became the nation’s biggest operator after completed the £179 million cash acquisition of Gala Casinos. The deal was allowed to proceed after Rank agreed not to take over Gala casinos in Aberdeen, Stockton-on-Tees, Bristol and Cardiff. . Analysts said that Gala Coral, the previous owners of the casinos, had not invested in the casinos for years. Bartram stated “It’s an opportunity to create [Rank’s Grosvenor chain] as a proper brand, which they have not done so far.”

Rank said that the 20% tax on gaming machines would have a “slightly adverse impact” on the company’s operating profits. Many casino operators in the UK object to the 20% tax on gaming machine profits and say it could put them out of business. At some casinos 70% to 80% of all income is generated by electronic slot machines. Rank’s digital revenues grew by 70% year on year. Rank accounts for only 1% of the UK’s online casino market. Warmer weather has finally arrived and hopefully the bingo halls will be full again.

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