Rank Group brand migration delayed by affordability automation process

The long-awaited migration of Rank Group’s flagship Mecca and Grosvenor brands to its RIDE proprietary technology platform will be delayed until 2022.

Speaking to EGR after the business revealed a 6% annual fall in revenue generated from its digital business, Rank Group CEO John O’Reilly highlighted the implementation and enhancements of affordability measures as a key factor in the delay.

“A lot of our safer gambling journeys on that platform are manual processes and of course, with RIDE, we’re automating all of those processes,” O’Reilly explained.

“What we’ve decided to do is to go beyond the original scope of that development project.

“We’ve decided that we need to do further development to ensure that when we do migrate Mecca and Grosvenor, we’re all but code complete,” he added.

O’Reilly confirmed Rank would then embark on a series of performance testing and dress rehearsal processes ahead of the expected migration of the Mecca brand in Q1 2022.

“We won’t do it at Christmas for obvious reasons so it’ll probably be the early part of the next calendar year when we migrate Mecca but we’re in no rush to do it,” O’Reilly explained.

Rank’s multi-million-pound migration to a platform operated by the acquired Stride business began in November 2020 with the migration of the Bella Casino brand.

Elaborating on the status of Rank’s other main brand in Grosvenor, O’Reilly said the additional architecture and integration work required for Grosvenor’s poker and sportsbook offering had caused further delays.

“From an acquisition budget point of view, we’re in line with where we thought we’d be on the cost of the project which is great, so there’s no additional costs been incurred here,” the Rank Group CEO explained.

“Obviously, we’d have liked to migrate it before now but the important thing is when we migrate, we migrate to a platform, which is a big step forward for us as a group.

“Thereafter, everything is in our own hands really, we can develop new products and features and make further improvements to customer journeys to further reduce friction, with much more focus on real-time data to drive customer interaction,” O’Reilly added.

“I don’t just mean from a safer gambling perspective, although that’s very important, but also from a commercial perspective. That really is the next step for us, but first of all, we’ve got to deliver and the team are doing a great job delivering it,” he added.

On Thursday, Rank Group announced a 50% year-on-year decline in full-year net gaming revenue (NGR) to £282.2m for the 2020-21 financial year, with digital revenue dropping to £136.3m.

The brand migration forms one of the key pillars of Rank’s transformation strategy, which aims to enhance the businesses long-term prospects.

This strategy was severely impacted by the Covid-19 crisis and its effect on the firm’s land-based business.

Now entering digital transformation phase 2.0, Rank has confirmed it will implement the next phase through seven distinct workstreams; Grosvenor, Mecca, Enracha, Digital, Omni-Channel, Organisational Capabilities and Safer Gambling.

Despite the revenue downturn, O’Reilly remained upbeat about the potential for 2.0 to transform the firm’s fortunes as it emerges from the pandemic.

“We’ve got good plans in each of those seven workstreams and compared to transformation 1.0, which had a strong focus on cost, this is very much focused on revenue,” O’Reilly explained.

“We’re running a more efficient business now than we have been, and it’s now all about driving revenue growth,” he added.

O’Reilly’s bullish outlook was mirrored by Peel Hunt analyst Ivor Jones, who reiterated his Buy rating for the operator.

“Yesterday’s presentation made clear that the past 18 months have been about more than just Covid-19 at Rank,” said Jones.

“The transformation programme, which so impressed investors from mid-2019, has continued; venues have benefitted from investment in the product offering, and Digital is set to migrate to the in-house platform by mid-2022,” he added.