The company that owns the Mecca Bingo chain, Rank, is suffering losses as a result of the decline in footfall, it has said.
A combination of fewer people going to play bingo and gamblers choosing to spend less in Grosvenor Casinos, which the company also owns, has resulted in a drop in pre-tax profits by as much as 26% on the previous year.
No one will be feeling too sorry for Rank, of course, given that the company’s overall revenue actually increased slightly thanks to a 17% increase in the amount of digital revenue that it earned during the same period. Even so, a 3% fall in profits from both the Mecca Bingo properties and the Grosvenor Casinos will be a cause for concern for the company, which will be keen to figure out what it can do to stop things declining even further.
What Happened
In the first half of the year, footfall at Mecca Bingo halls fell enough to mean that the company’s profits were hit somewhat substantially. That came at the same time as people chose to spend less money at Grosvenor Casinos, meaning that the two main sources of income for Rank in terms of physical entities saw less money coming through their doors.
As many as 9% of Mecca Bingo customers chose not to attend the venues, the company has revealed.
At the same time the sales at Grosvenor Casinos fell by 5%. It wasn’t until the second half of the year that things began to pick up for the casinos at least, rising by 1%.
That meant that operating profits in the second half of the year were actually 20% up on the same period in the previous year, but it wasn’t enough to reduce the poor start to the year. Profits for the group were down to £39 million, which was a loss of around 22%.
Like-for-like revenues remained around the same at £729.5 million thanks to a strong growth in online sales.
How The Rank Group Has Responded
Rank obviously didn’t take the first half of the year’s poor performance lying down, making a number of changes in order to attempt to fix the problems. It created a ‘turnaround programme’, which it informed investors was working and the results were looking good.
The measures were brought into place in December 2018, with Grosvenor Casinos making decisions such as reducing the number of working hours for staff as well as streamlining the company’s management structure.
Rank also made efforts to improve their online offering, spending £115 million to buy Stride Gaming. The online bingo specialist is likely to officially become part of the Rank Group in the autumn of 2019, which will see the money the company makes from online gaming increase even further.
That will be a boost to an area that is already one of the Group’s main money-makers, mainly because of younger players who tend to use their mobile phones and computers rather than go to bingo halls in person.
What The Company Has Said
John O’Reilly is the Chief Executive of Rank. Speaking about the issue in the wake of the report, he declared that the Group is pleased with the performance that it put in in the second half of the year.
He said that people were especially happy after the ‘challenges’ that Rank had to cope with during the first half of the financial year. He referenced the ‘transformation programme’, which he said was ‘pivotal’ to the company’s growth plans both international and in the United Kingdom.
O’Reilly believes that it’s important the Rank keep improving, however. Whilst the company has been ‘excited’ by the initiatives that have been put in place at both Grosvenor Casinos and Mecca Bingo, it’s also key to the company’s development that they find as many ways as possible to improve the service that is offered.
He said:
“We have made a good start to the transformation of Rank and there remains a lot of improvement to be delivered”
What This Means For Land-Based Bingo Halls
Mecca Bingo won’t be the only bingo company interested in what this means for the future of the world of bingo. The likes of Gala Bingo will also be keen to know if there’s any way to arrest the decline in interest in playing bingo in person.
Is the drop-off in the number of people turning up to Mecca Bingo halls hoping to mark their card, keep an eye on the prize and shout ‘House!’ entirely down to move online? Or is that something of a smokescreen for a bigger problem that bingo halls are likely to face in the age of Brexit and less disposable income?
Bingo has long had a public relations problem in terms of people thinking that it’s a game for older people. The stereotypical bingo player has a purple rinse and moves at the speed of a particularly tired sloth, so it’s little wonder that young people aren’t rushing along to the bingo hall on a Saturday night.
The stereotype isn’t true, of course, but it’s what a lot of people think about bingo players and it’s difficult for the game to shake off that image no matter how hard the advertising companies try. In actual fact a bingo hall is just as likely to be filled with groups of young people of both sexes as it is of old women, so the problem doesn’t just lie in attracting new players.
The reality is that most young people don’t have heaps of disposable income to play with any more, whilst those that do are far more likely to play bingo online rather than get out of the house and drive to a bingo hall. That’s why Rank have been increasing their efforts to buy up online bingo sites, knowing that if they can create an online empire then they’ll be able to subsidise the land-based bingo halls at the very least.
In time, it wouldn’t be a complete shock to see more and more bingo halls closing but companies such as Mecca and Gala Bingo growing in influence thanks to their internet-based sites.