LONDON (ShareCast) - (Sharecast News) - Gambling company the Rank Group ended its third quarter with total cash and available facilities of £89.8m, it announced on Thursday, comfortably achieving its minimum liquidity covenant of £50m.

The FTSE 250 firm said that during the quarter, it received a £13.4m duty refund following the Supreme Court's decision in favour of another taxpayer on the treatment of free gaming chips, while the amount of deferred rent reduced to £13.9m, from £17.3m as at 31 December.

Since the quarter ended, Rank completed the sale of its Blankenberge casino in Belgium and received the associated £25m of cash sale proceeds, further bolstering its cash reserves.

The company said it expected to make its scheduled £19.7m term loan amortisation payment on 31 May, adding that based on the UK government's current timetable for the reopening of gambling venues, it expected to continue to meet its banking covenants.

Like-for-like net gaming revenue was down 76% year-on-year for the quarter ended 31 March, with venues revenue down 98% and digital down 3%.

It said total net gaming revenue was down 72%.

During the quarter, all UK venues remained closed, while nine Enracha venues were open and operating by the end of the period in Spain, experiencing "strong" customer demand, although under "very strict" capacity restrictions.

Digital delivered sequential quarterly net gaming revenue growth on the second quarter, with like-for-like revenue up 3%, and total revenue including Stride rising 4%.

The company said its focus remained on continuing to grow digital net gaming revenue, adding that it expected a return to year-on-year growth in the first quarter of the 2022 financial year.

In the third quarter, Grosvenor digital net gaming revenue was down 2% quarter-on-quarter, while Mecca digital revenue continued to improve, with third quarter net gaming revenue up 4% over the prior three months.

Stride net gaming revenue was ahead 7% quarter-on-quarter, while Yo continued to accelerate, with its revenue rising 10%.

"We have ended the third quarter broadly where we expected to be, and are now very focussed on the reopening of our UK venues from 17 May, alongside continuing to drive digital net gaming revenue growth," said chief executive officer John O'Reilly.

"Our business has inevitably been heavily impacted by the pandemic but, with the strong support and dedication of our colleagues, we are now very much looking forward to reopening our casino and bingo venues, welcoming back our customers and providing the great entertainment and omni-channel service in a Covid-safe environment we know they enjoy.

"We continue to make good progress on the 'Transformation 2.0' plans, which will drive the next phase of growth for the group."

Rank said it would report preliminary results for the 12 months ending 30 June on 19 August.

At 0829 BST, shares in the Rank Group were up 0.63% at 191.2p.

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