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(Reuters) – The World Cup, cold weather and a lack of disposable income have left British punters spending less at casinos, gaming operator Rank Group said on Friday, and warned of lower annual profit, prompting its shares to drop 9%.
The owner of the Mecca and Grosvenor Casinos brands said the soccer World Cup in Qatar, combined with unusually cold weather and an acute cost of living crisis in Britain, had led to a weaker-than-expected three months to the end of December.
“Weak consumer confidence and pressure on disposable income is resulting in a tougher-than-expected trading environment for our UK venues businesses, particularly in Grosvenor, where we are seeing customers spending less per visit,” Chief Executive John O’Reilly (NASDAQ:ORLY) said.
The Grosvenor venues, which accounted for 45% of the group’s revenue in the year ended June, would take longer than expected to return to growth, Rank said.
Rank Group shares were down 9% by 0844 GMT after the company said like-for-like underlying operating profit is expected in the range of 10 million ($12.20 million) to 20 million pounds for fiscal 2023, compared with 40.4 million pounds it reported in fiscal 2022.
The company, which operates its venues in Britain under the Mecca and Grosvenor Casinos brands, said its group like-for-like net gaming revenue for the five months to Nov. 30 was almost flat over last year.
“It is taking longer than we expected for customers to return to casinos, and spend per head remains subdued,” analyst at Peel Hunt said.
Rank Group has seen good growth in its digital business, which includes RummyPassion and BellaCasinos, with net gaming revenue at the division up 11% in the five months ended Nov. 30.
And rival bookmakers, such as Entain, Flutter and 888 Holdings, have yet to report Britain’s cost-of-living crisis has led to major slowdowns in their operations.
($1 = 0.8197 pounds)