Part 1: The UK – Covid-19 compounds contraction
released in late April, Gamesys said that the UK
had produced a “solid performance” in the first
quarter. Total group revenues rose 19% over the
first three months of 2020 to £155.2m; based on
the 2019 share of revenues from the UK of 63%
it would suggest that UK revenues in the first
quarter came to approximately £98m.
While the company acknowledged that the
current crisis presented a “unique set of challenges”,
the company pre-empted the BGC ad ban by saying
it had “suspended untargeted customer marketing”,
as well as ceased all TV and radio advertising until
the current restrictions are eased.
Gamesys gave some interesting insight into
how players are reacting to the current climate.
It said that since the lockdown began, player
engagement in chat rooms had risen by 38%,
while there had also been a 10% rise in nonwagering
sessions across its UK sites. In response,
the company is now providing 10 hours of free
bingo every day.
Analysts at Numis said Gamesys was “in a
sweet spot” given its lack of exposure to retail and
(at present at least) sports betting. It estimated
that UK growth was mid-single digit, a trend
which had continued into the second quarter
despite the lockdown.
Rank – material impact
If it wasn’t for the recent actions of Rank’s newish
chief executive John O’Reilly to turn around
and augment via acquisition the digital side of the
Rank business, Rank would be in a whole world of
trouble right now.
The largest land-based casino and bingo
operator in the UK, the company has seen all of
its venues closed under the current lockdown.
With little prospect of there being any business as
usual for the rest of this year, the company spoke
in its 20 April trading statement about the various
mitigation efforts designed to limit the monthly
cash outflows to £10m as of May onwards.
The good news from Rank came with the
digital business and specifically the UK-facing
Grosvenor Casinos and Mecca Bingo brands. The
first saw its NGR rise 27% in the company’s third
quarter, while Mecca Bingo was up 20%. The
company noted that 44% of Grosvenor’s NGR
came from multi-channel customers and certainly
Rank will be hoping it can both keep hold of these
customers and persuade them to return to its
venues in the future.
There was better news, as well, on the Stride
acquisition that was completed in October last
year. Like-for-like revenues from Stride were up
3% after revenues fell 9% in the first half. The
company said at the time of its first-half results
in January that it hoped a transformation of the
business would see it return to growth in the
second half, which it has duly achieved.
Flutter Entertainment – stars aligned
There are probably better times to be completing
a major acquisition, but Flutter Entertainment will
still have been celebrating receiving the official
sign-off on its deal with the Stars Group from the
Competition and Markets Authority (CMA) in the
UK in late April.
Table 4: Rank selected 3Q20 figures
Grosvenor digital revenue growth
rate (%)
Mecca Bingo online revenue
growth (%)
Stride LFL revenue growth (%)
Source: Company reports
27 20 3
Table 5: Flutter 1Q20 trading statement selected figures
Sports revenue (£m) Sports yoy rise (%) Gaming revenue (£m) Gaming yoy rise (%)
Source: Company report
407 13 140 25
iGB Market Monitor • The UK and Sweden • May 2020 6