Rank Group (RNK) H2 2021 earnings summary

Executive summary

• FY2020/21 was severely affected by pandemic closures and restrictions; trading recovery began after venues reopened on 17 May 2021.

• Venues traded above cash break-even after reopening, with demand exceeding expectations and further improvement following restriction changes on 19 July.

Financial highlights

• Net gaming revenue was £329.6m, down 48% reported and 50% LFL; revenue was 45% of calendar 2019 pre-COVID levels.

• Underlying operating loss was £84.5m vs £49.1m profit; continuing-operations loss after tax was £96.9m vs £8.2m profit.

• Underlying EPS was -20.3p vs 6.7p; dividend per share was 2.80p.

• Cash generated from operations was -£31.6m vs £142.3m; year-end cash and available facilities were £98.0m.

Outlook and guidance

• Management expected gradual return toward pre-pandemic venue trading as consumer confidence and international tourism recover; 2021/22 performance was in line with expectations.

• Venues had been open for 13 weeks and were trading comfortably above cash break-even; management expected a return to regular banking covenants by FY2021/22 year-end.

• FY2022 capex guidance was £40m–£50m, dependent on recovery confidence and pandemic developments; underlying effective tax rate guidance was 17%–19%.

• Mecca migration to the proprietary digital platform was expected early in Q3; completion was forecast to release a further £6.8m of annualised Stride synergies.