Rank swings to annual loss as Covid lockdowns hit venues

The company said annual net gaming revenue almost halved to £329.6m, from £629.7m. Losses compared with a profits of £21.5m a year ago for the owner of Mecca bingo halls.

On an underlying basis net gaming revenue was £288.2m down from £575.6m, while the underlying operating loss was £67m. Venues underlying net gaming revenue was down 65% at £151.9m.

The group, which also owns Grosvenor casinos, suffered monthly cash losses of £15m, net of government, resulting in net cash outflow from operations of £21.2m for the year to June 30.

“The year…was exceptionally challenging for the group and, frankly, we are delighted it is over. We are now well into a new financial year with our venues open and trading positively,” said chief executive John O'Reilly.

“Good progress is being made in our digital businesses and there is a renewed sense of confidence as we focus on the growth initiatives within our clearly defined transformation programme.”

"Our venues have been performing ahead of our expectations following the easing of restrictions on the UK hospitality sector on 17 May and we anticipate further growth as travel restrictions eventually ease and tourism returns, particularly to London."

O'Reilly said it had also been a "challenging" year for online "following the stringent application of affordability restrictions" after the Gambling Commission issued new guidance for online gaming operators to ensure consumer protection.

The Commission said the move followed evidence that "some gamblers may be at greater risk of harm during lockdown". That included affordability checks.

Since reopening in mid-May Net Gaming Revenue (NGR) has averaged £5.7m and £2.6m per week the Grosvenor and Mecca venues respectively, above breakeven of £4.4m and £2.4m per week.

Analysts at Shore capital forecast venue revenues to be down around 10% in full-year 2022 and getting back to pre-Covid levels by fiscal 2023.

"On our estimates, EBITDA is forecast to recover to £114m in 2022 and £147m in 2023. We would hope for a clearer picture on estimates at the group s Q1 update in October," they added.

"Although there remains continued uncertainty over time timing and pace of recovery, especially for its London casino estate, and digital remains softer than we would hope, we are encouraged by the performance since reopening, especially its regional casino venues, whilst the Transformation programme is set to deliver significant operating improvements and cost savings ... management's track record prior to Covid was excellent."