Buzz Bingo has lifted the lid on the challenging financial picture that led to it closing 10% of its UK venues earlier this year.
Buzz Bingo – which rebranded from Gala Bingo in 2018 – posted an uptick in both revenue and earnings for the financial year to 14 January 2023.
However, long-term and transient challenges, such as the impact of inflation, continued to stymie growth. Shortly after the conclusion of the reporting period, Buzz Bingo announced in March 2023 that it was to close nine of its 91 retail locations as they were considered no longer “financially viable”.
During the 12-month period, revenue was up 39.6% to £195.1m ($239.5m/€224.2m) thanks to growth in both its retail and online businesses.
The results for the group were enhanced by the first full year without Covid-19 restrictions since 2019. Retail revenues of £165.4m were up by 47.2% on the prior year. However, despite the double-digit growth, Buzz Bingo noted that recovery in admission levels compared to 2019 “remained slower than anticipated”.
The group’s online business improved its performance materially during the financial year and grew its customer base. Online revenues grew by 8.2% compared to the prior year.
The online business introduced a new iOS app, evolved its website and sought to improve the player experience. However, despite its success, online still only accounts for less than 15% of group revenue.
Continuing cost pressures at buzz bingo
The expansion in both business verticals helped to deliver a tripling of underlying EBITDA compared to the prior year. This totalled £30.5m, compared to £10.2m in 2022.
Buzz Bingo said that despite a continued strong focus on driving efficiencies across the business, inflationary cost pressures in its retail clubs adversely impacted operating margins during the period.
Labour cost increases, utilities inflation and supply chain disruption had a significant inflationary impact on the cost of food and beverage input and labour costs as well as putting pressure on customers’ disposable income.
After becoming insolvent during the Covid-19 pandemic, the group commenced a fundamental cost restructuring during the last quarter of 2022 to provide a leaner operational cost base. Ultimately, this included the permanent closure of nine retail locations in April 2023.
The results for the group show a loss, after taxation, of £53.3m, which was greater than the loss of £51.9m in the previous year. However, included within this loss was a non-cash goodwill impairment charge of £19.4m. Exceptional items, such as reorganisation and restructuring costs, matched the £3.2m posted in the prior year.
“The backdrop for the leisure market remains challenging in 2023, however the group is confident in the plans it has in place to manage these risks and remains constantly focused on delivering great value for customers,” Buzz Bingo said in the report.
“Through building upon its customer centric omnichannel offering, Buzz will focus on delivering great value for its customers and enabling them to play wherever is most convenient for them.
“The underlying investment and operational strategy will continue to centre on enhancing the customer experience across both clubs and online while ensuring we minimise the risk of harm at every stage.”
