Buzz Bingo has revealed the financial challenges that caused it to close 10% of UK locations earlier in the year.
Buzz Bingo, which was rebranded as Gala Bingo in 2018, posted a rise in revenue and profits for the year ending 14 January 2023.
Growth was slowed by both long-term challenges and temporary ones, like the inflationary impact. Buzz Bingo, shortly after the end of the period under review, announced that nine out of its 91 stores would be closed in March 2023 as they are no longer “financially feasible”.
The growth of its online and retail businesses boosted revenue by 39.6% during the past 12 months to PS195.1m (EUR224.2m/$239.5m).
First full year of Covid-19-free operation since 2019 has improved the results. Retail revenue of PS165.4m was up 47.2% from the previous year. Buzz Bingo stated that despite double-digit increases, the recovery of admissions compared with 2019 was “slower than expected”.
Online business of the group improved materially in performance during financial year. It also grew customer base. Online revenue grew 8.2% over the previous year.
Online business launched a new iOS application, improved its website, and sought to enhance the experience of players. Online still accounts for only less than 15 percent of the group’s revenue, even though it has been a huge success.
Buzz bingo continues to face cost pressure
This was due to the expansion of both verticals. The total was PS30.5m compared with PS10.2m by 2022.
Buzz Bingo reported that, despite its continued focus on driving efficiency across the company, the inflationary pressures of retail clubs negatively impacted the operating margins for the period.
The inflation of utilities, labour cost and disruptions in the supply chain had an inflationary effect on food and beverages and their input costs. This also put pressure on consumers’ income.
Insolvent due to the Covid-19 pandemic in 2022, the group began a cost-restructuring process during the fourth quarter of that year. This was done with the goal of reducing the operational costs. This included closing nine retail stores permanently in April 2023.
After tax, the results show that the group suffered a loss of PS53.3m. This was higher than the PS51.9m loss in the prior year. This loss included a goodwill impairment of PS19.4m, which was not cash. The exceptional items such as restructuring and reorganisation costs were the same PS3.2m that was posted the previous year.
Buzz Bingo stated in its report that “the backdrop for leisure remains challenging for 2023. However, the group remains confident in plans in place to mitigate these risks. It is also focused on providing great value for their customers.”
Buzz will continue to focus on providing great value and giving its customers the ability to play where it is convenient.
The underlying operational and investment strategy will focus on improving the experience of customers in clubs as well as online, while minimising the risks at each stage.
