Mecca owner Rank warns of ‘challenging’ road ahead amid inflationary pressure
Mecca owner Rank has warned of a “challenging” road ahead this morning, as the gambling giant faces inflationary pressure and dwindling demand.
While underlying operating profit for the full year was £40.4m, in line with guidance provided in June, Rank said its position would “remain challenging in the months ahead with high inflation hitting consumer discretionary expenditure and inflationary cost pressures”.
“Our nine London casinos, which account for over 38 per cent of Grosvenor’s revenue in normal trading conditions, have seen very weak customer volumes with overseas visitors few in number, and only starting to return in the final few weeks of the year,” chief exec John O’Reilly said.
“The lower than expected Grosvenor trading in H2 led us to reset full year operating profit
expectations as announced in Q4″
He did add that there had been improvements in London in recent weeks, as well as a growing digital business performance.
The news comes as the betting industry continues to brace itself for the gambling white paper.
The landmark review of the Gambling Act 2005 was initially expected in the Spring, but has been delayed on multiple occasions, with the recent political turbulence meaning it has been shelved until the Autumn at least.
O’Reilly said in a statement this morning that he was “disappointed” by the delay, stating that land-based casino and bingo sectors are in need of long overdue modernisation of the regulations.
Shares dipped as low as 7.4 per cent in early morning trading.