Company Growth through Innovative Digital Channels
The British gaming firm, Rank Group, has managed to turn their luck around and surpass their prior financial losses by intensifying their online business. The company expressed positive half-year results recently. Here's a quick rundown on their performance.
Setbacks from Physical Casinos
After publishing H1 results for 2019, it's evident that the Rank Group has managed to bounce back from financial losses incurred due to land-based casinos. However, building strong roots in the past has only added to its woes. The Maidenhead-based group faced issues as their businesses struggled due to financial losses from casinos and bingo club operators. Last year was particularly challenging due to a revenue shortfall that led to a downward trend in their profit margins.
The Group's operating profit slashed by a whopping 35% in its Grosvenor casinos as the second half of 2018 began. The year-on-year net profits depreciated by 22%, bringing down potential profits from GBP 50.1m to GBP 39m. Factors like adverse weather conditions and feeble interest in soccer seriously impacted the number of visitors to the land-based casinos and mecca bingo clubs.
Digital Shift
Meanwhile, the losses from physical casinos have pushed the company to shift to the online sector to offset their losses. Rank Group made a significant progress in the first half of 2019, recording a 17% jump in revenue, amounting to around GBP 691 million (roughly 763.5 million Euros).
This shift from land-based casinos to online platforms can be traced back to a major restructuring effort the company underwent in the second half of 2018. John O'Reilly, CEO of Rank Group, acknowledged the need for change and made the necessary tweaks to the company's structure as a response to their struggling physical gaming business.
Reduced Workforce and Management
As a part of that restructuring, they introduced a 1% reduction in working hours, an initiative that faced severe criticism in the UK media. Additionally, they made several job cuts at the management level across the company's locations. These decisions were heavily perceived as cost-cutting measures leading cut costs.
The cumulative efforts of these cost-cutting actions, along with the strategic focus on online gaming, have generated a positive turnaround in the business's performance. For the first time in over a year, the Group has moved past the diminishing returns from its physical establishments and experienced a modest growth in revenue.
Acquisitions
The group is also entering the online gaming market by acquiring another online gaming provider, Stride Gaming. The deal, worth EUR 115 million, includes a range of platforms like Kitty Bingo, Bingo Extra, Regal Wins, Lucky Pants, Spin&Win, and Lucky VIP. The plan is to complete this transaction by 2020 and expand their online presence with the ultimate goal of establishing one of the UK's top online gaming companies.
O'Reilly talked about the acquisition in a recent interview:
O'Reilly believes the strategy has room for growth and considers their performance positive while looking forward to the annual results.
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Source: www.onlinecasinosdeutschland.com
