Mecca offers hope over smoking ban
Mecca Bingo firm Rank has surprised the City by revealing sales declined by less than expected in the first weeks of the smoking ban in Wales.
The group’s three clubs in Wales reported a like-for-like sales drop of 5% in the period since April 2, compared with a 14% deterioration experienced when the ban was first introduced in Scotland more than a year ago.
In Scotland, revenues were down by 10% at the company’s 14 clubs during the first 25 weeks of the year, but the firm said it had begun to see signs of recovery in recent weeks.
Since the anniversary of the Scottish ban in March, revenues were down by just 1% with a return to revenue growth during the last nine weeks.
Investec analyst Matthew Gerard said the results were “encouraging” and suggested that the smoking ban “forces a temporary adjustment only and that longer term, post the ban, bingo can be a growth industry”. Shares rose 3% today.
Rank, which has 86 Mecca clubs in England, has introduced measures to mitigate the impact of the UK-wide ban, such as smoking shelters where customers can continue to play while they smoke.
Chief executive Ian Burke said: “Our approach to the smoking ban is to focus on the changing needs of our customers and to adapt our product offer accordingly.
“The initiatives we are introducing are designed to make sure that our customers’ experience of bingo is enhanced rather than impaired by the smoking ban, with consistently attractive prize boards, the development of electronic bingo products and the creation of outside enclosures where customers can continue to play bingo.”
The news came as the firm reported a 5% rise in like-for-like group revenues during the first 25 weeks of the year, ahead of analysts’ expectations of 3%.
Rank’s Grosvenor Casino chain grew revenues by 4% following a pick up in admissions during the second quarter, while revenues at its gaming website Blue Square soared 37%.