Bingo clubs have been closing their doors for years because of the smoking ban, punitive taxes, tough economic conditions and competition from the National Lottery and online gaming operators.
But Rank Group hinted yesterday that it could start opening new bingo clubs to cash in on a revival in the fortunes of its Mecca chain amid rising customer numbers and an increase in younger players.
Ian Burke, the Rank chairman and chief executive, said that Mecca was seeing increases in both the number of customers and spend per visit, and he confirmed that if returns on investment improved, new openings would be considered. It is three years since Rank opened a new bingo club — a £5 million Mecca club in Beeston, Nottingham — although in practice it is many years since any of the biggest chains expanded.
While it has now closed or sold all its loss-making venues, Mr Burke said that it still had a “small tail” of venues that were not suitable for conversion to Mecca’s more modern “Full House” format.
He said that, to date, Full House investments had yet to deliver satisfactory returns, achieving a cash return of about 12 per cent compared with the 22 per cent is it extracting from its revamped casinos.
“If we start to to get the sort of returns we’re seeing on Grosvenor Casinos, we will start to open new Mecca venues,” he said. Mr Burke added that Mecca’s 98 clubs were attracting an increasing number of younger players, drawn by improvements in the food and drink offer and entertainment such as “After Dark Bin-glo” and “Rock’n’Roll Bingo”.
The under-35s now account for more than a third of customers although their frequency of visit is well below older members.
He said that the introduction of bingo games played on tablets and the launch of a Mecca Facebook page were helping to generate interest from younger players. He added that Mecca was also growing rapidly online, helped by the launch a year ago of a mobile service while it would shortly be luanching an iPad app.
Rank, which is in talks to acquire Gala Coral’s casino business for about £250 million, reported pre-tax profits before exceptionals up 8 per cent to £32.5 million in the six months to the end of December, from revenues 3.2 per cent higher at £295.9 million.
The group, which has changed its financial year-end to fall in with Guoco Group, its majority shareholder, is paying a second interim dividend of 1.1p.
A reminder of the pain suffered by Mecca in 2007 was provided by the performance of the group’s Top Rank Espana bingo clubs in Spain, which suffered a 20 per cent fall in revenues in the six-month period due to the introduction of a smoking ban in public places.
Asked whether anything had changed since Guoco lifted its stake to 74.5 per cent last year in controversial circumstances, Mr Burke replied: “The results show we continue to do pretty much what we’ve been doing for the past couple of years.”
Shares in Rank closed 2.8 per cent lower, or 4p, at 139p.