Mecca owner Rank slashes guidance after weak March

Mecca bingo’s parent company has cut its earnings targets after it saw customer numbers weaken across its venues last month.

Rank Group saw shares drop after bosses said this weaker performance continued into the start of April.

John O’Reilly, chief executive of Rank, said: “The performance of our venues softened in March, and this has continued into the first few weeks of Q4, impacting our current expectations for our full-year performance.

“We recognise the pressures on UK consumers but are confident that the improvements we are continuing to make to the customer proposition and the investments in our venues, alongside the gradually reducing impact of the pandemic and, with it, the return of overseas customers, position us well for the year ahead.”

The group, which also runs the Grosvenor casino chain, said it hopes the return of more tourists to London and UK cities can re-energise its recovery.

It said the current quarter is traditionally a quieter period but hopes for a rebound on the “return of office workers to city centres and overseas customers”.

Peel Hunt analyst Ivor Jack said: “May and June could see a bounce-back in demand as domestic and inbound tourism recover.

“In particular, attendance appears to be negatively correlated to Covid-19 cases, which implies that passing the peak in cases and the start of summer could be positive for revenue.”

Rank said it expects earnings before tax and interest of between £47 million and £55 million, dropping from its previous guidance of between £55 million and £65 million.

It came after the company reported group revenues of £156.4 million for the three months to March.

Rank shares dropped by 7.6% to 118.7p in early trading on Thursday.