Rank Group PLC (LON:RNK) tumbled to a £48.6mln pre-tax loss in the half-year to the end of December 2020 as its casinos and bingo halls were only able to open for 45% of available days due to coronavirus lockdowns and curfews.
But with the half-year closing with cash and available facilities of £128.3mln, directors said they are confident the company will meet its banks’ liquidity test through the going concern period to March 2022.
A £70mln equity placing in November strengthened Rank’s balance sheet, with banks agreeing to a 12-month extension to existing debt covenant waivers, with a £50mln minimum liquidity test.
Group net gaming revenue (NGR) fell 55% to £177.6mln as like-for-like NGR from venues crashed by 70% due to closures.
“Customer demand has however been strong when trading has been possible,” Rank said.
Moreover, digital NGR decreased by a relatively comforting 14% with LFL revenue up 1% as the company said it took a “strong position” to restrict customer expenditure based on affordability.
However the improvement from the first into the second quarter, good growth in the Yo brands in Spain and progress in the development of a proprietary technology platform all provides management with confidence in the second-half outlook.
In a statement, Rank’s chief executive John O’Reilly said: “The ever-changing restrictions coupled with curfews, which in particular have a seismic impact on our Grosvenor venues, have resulted in an exceptionally challenging first half for the group.”
He said there was continued uncertainty looking ahead, particularly as venues remain closed and there is no firm government guidance as to when they will be able to reopen.
Following the November equity raise and with the support of lending banks, O’Reilly said, “I believe we have the balance sheet strength to survive an extended period of closure. We are now focusing on delivering the next stage of our transformation plan and are ready to reopen our venues when the virus is under control and the vaccine roll-out has achieved its purpose.”