Bingo hall and casino company Rank Group has reported rising energy costs and falling customer spending at its casinos.
Shares of the company fell in early trading as bosses said they expected “difficult” conditions to continue “for months to come”.
It came as Rank, which runs Mecca Bingo, recorded a 2% increase in group revenue to £165.7m in the three months to September 30.
The group benefits from a 2% growth in its bingo activity and 13% in digital growth.
However, the company pointed out that its Grosvenor casinos saw a 5% drop in revenue after lower spending per customer visit.
He said London was an outlier, with the city’s casinos reporting a 21 per cent rise in revenue, but pointed out this was more than offset by lower spending elsewhere in the country amid rising cost of life.
Rank told shareholders he expects consumer discretionary spending “to remain under significant pressure this year” despite the positive impact of household energy bill support.
The games and games company said its own costs continued to soar, with its energy bill expected to hit £34m for the current year, up from £23m.
He added that he was also coming under increasing pressure from wage inflation, rising food costs and supply chains.
John O’Reilly, Managing Director of Rank, said: “While this is a challenging trading environment and we expect it to continue in the months to come, we remain committed to providing our customers the leading, exciting and entertaining proposition of Rank.
“The group has a number of key initiatives underway to improve its long-term revenues.
“These include some key refurbishment projects and new electronic roulette and jackpot games at Grosvenor; improve the supply of gaming machines in Makkah; increased personalization and a stronger live casino offering in the UK digital sector and the recent launch of Yo Sports in Spain.
“The group benefits from a strong balance sheet, which allows us to continue to invest in the business throughout this period.”
Shares of the company fell 8.7% in early trading.