Shares in Rank Group, the owner of Mecca Bingo and Grosvenor casinos, dropped into the red after warning its business was under pressure amid low tourism numbers and the cost of living squeeze.
Shares in the firm dropped 3.4 per cent, or 3p, to 85p as its boss John O’Reilly flagged ‘unexpectedly softer trading’ across its casinos in the first six months of 2022, noting that its branches in London had seen ‘few’ overseas visitors.
He warned trading was ‘likely to remain difficult in the months ahead’ as consumer budgets were squeezed by rising costs, leaving them with less cash to splash out on gambling.
Slump: Shares in Mecca Bingo and Grosvenor casinos-owner Rank fell 2.7% as its boss John O’Reilly flagged ‘unexpectedly softer trading’ across its casinos in the first six months of 2022
The group was also grappling with the rising cost of energy, which O’Reilly said was ‘putting pressure’ on Rank’s profit margins.
The bleak outlook came despite the company swinging to a £74.3million profit for the year to the end of June from a £107million loss a year earlier as the relaxation of lockdown restrictions saw the return of customers to its bingo halls and high-rollers to its casinos.
Aside from its issues with customer numbers and inflation, O’Reilly also said the delay to the Government’s plans to reform gambling laws had been ‘disappointing’ for the group.
‘Rank has been waiting patiently for government proposals to reform gambling laws, which much to the company’s frustration have been postponed four times since 2019 amid a dispute among Conservative party members,’ said Victoria Scholar, head of investment at Interactive Investor.
‘The UK’s regulatory tightening and uncertainty continue to be major headwinds for stocks like Rank, alongside the cost-of-living crisis which leaves individuals and households with less disposable income left over at the end of the month.’
The FTSE 100 inched up 0.35 per cent, or 26.1 points, to 7541.85 and the FTSE 250 rose 0.55 per cent, or 109.61 points, to 20,136.65.
The blue-chip index was held back by several large stocks going ex-dividend, meaning the shares were no longer trading with the value of their next dividend payment.
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