My Firm: RANK Group
Initial Thoughts
To be honest, when I was first presented with the RANK Group, I had never heard of it and had no idea what industry they were even in. I started to explore the company by opening the webpage and looking through the website to see what I could find out. It was not until I opened the Annual reports where I gained a more detailed insight into the company. The first few pages of the latest annual report were a little confusing as it was talking about entertaining and felt misleading cause entertaining could mean many things. It was not until I read a few more pages that I began to understand that they were responsible for gambling and gaming facilities and experiences online/digitally as well. The report then quickly went into compliance and regulations which demonstrated that they were involved in gambling and did take their responsibilities seriously. Although, some aspects did confuse me, specifically their digital gambling platforms, due to the fact they are based in UK and therefore I have not come across any of their services or facilities previously. I also personally have no background knowledge on how gambling and gaming works as I have never been gambling or gaming in Australia.
An interesting feature of the RANK Group, that I came across in their report, was their inclusiveness and diversity. They have multiple females on their board and some from different ethnic backgrounds. I really like how they demonstrate this to their stakeholders, customers and world as it encourages other females and other cultures to get involved and promotes inclusiveness. It also acts as inspiration for future careers within the business and entertainment industries and the opportunities are endless for everyone.
KCQ’s #1 - Difference between current liabilities/assets and non-current assets
As I do not come from an accounting background nor have done an accounting course previously, my knowledge with financial statements is limited. Therefore, when the RANK Group have in their balance sheet ‘non-current assets’ like property, plant and equipment, I am rather confused with how those assets are different to ‘current assets’ like inventories. From my understanding, both those items are considered assets so why are they divided into separate sections. Similarly, a ‘non-current liability’ like deferred tax liabilities, is in a different section to ‘current liabilities’ like trade and other payables. To be even more complicated, lease liabilities and financial liabilities are under both ‘current liabilities’ and ‘non-current liabilities’. In each section, they both have a different amount for the same item.
KCQ’s #2 - What is the difference between ‘underlying’, ‘separately disclosed items’ and ‘total’?
When looking at the income statement, I have been skipping to the ‘total’ column to see the revenue, profit and other figures that I need to see. However, when looking at the two columns before that, I do not understand what the company means by underlying or separately disclosed. Is it just the total that matters? However, on multiple occasions, there is only a figure in one of the columns or the total is simply the sum of the two columns. For example, in the ‘equity holders of the parent’ row, there is €5.8m as ‘underlying’ and a €101.5m loss as ‘separately disclosed items’ and therefore the total was a €95.7m loss which is simply 5.8 – 101.5. I do not have a full understanding of the precise relationship between ‘underlying’ and ‘separately disclosed items’ and what they each mean.
KCQ’s #3 - Regulation and compliance seem to be some of the most important values for RANK Group as the gambling market is highly regulated.
When operating in the gambling market, like the RANK Group who provide gambling and gaming experience both in-person and online, there are many regulations and laws surrounding the operation. Throughout the annual report, they spend a high percentage of time focusing on the regulations, managing risks (specifically complying with gambling laws) and then provide a whole written section on compliance and how they comply as a business. Even though this company is based in the UK, throughout the whole world, gambling and gaming always have strict laws and restrictions potentially due to the fact that it is the underlying cause of addictions. Therefore, if a company is to operate successfully in this industry, they have to ensure people have a safe experience when using their gaming equipment and facilities. RANK Group’s focus on regulation and compliance shed a positive and reassuring light on the business as they take their role in addiction and gambling seriously and therefore want to ensure their customers have a positive experience. This illustrates that they are a trusted brand. If there was no evidence of compliance or displaying the need to adhere to rules and laws, it would portray that the company doesn’t care about its customers, rather they only care about making money, whether it is legal or not.
KCQ’s #4 – RANK Group appear to be primarily focused on the customer experience and ensuring the customer can get the most from their brand/products.
From the business model to the strategic pillars, each section includes some objective to do with enhancing the customer experience. Each of their strategic pillars include the customer in some way, from creating seamless experiences, to engaging new customers and creating a better platform for them. Even the first page to the annual report includes a slogan about the customer. The pages following the first few, also include the customer and how the RANK group target their customers and what their customers want. I have come from a background in customer service, where we were always taught that without customers, we have no jobs. I guess this also applies to large national companies like the RANK Group because without customers using their facilities and products, there is no revenue or profit for the company and therefore ultimately no business. Thus, it is important for the company to ensure they meet what the customers want because they are the ones spending money.
KCQ’s #5 – the challenge of being in an environment where people can only spend money on entertainment when they aren’t facing hardship.
One of the key challenges the RANK Group appears to be facing is that the entertainment, specifically gambling and gaming market, is only for those that have the extra money to spend on these things. It is hard for RANK to determine how much people will spend because it depends on external economic pressures placed onto the customer. For example, when the cost of living rises, or interest rates have risen, customers have less ‘spending’ money and will most likely restrict their ‘hobbies’ like gaming first, in order to survive and meet the expenses of living. This is because gaming is not seen as a necessity to most people. However, as discovered in their annual report, they have multiple strategies in place to help manage this challenge. For example, RANK Group aim to be ‘ahead of the game’ and monitor these economic pressures and therefore they plan ahead to ensure their business models can withstand a forecasted economic downturn or alike. The year ending in June 2023, it appears that the company made a loss of €9.3m in comparison to June 2022, where they made a profit of €64.9m. Therefore, they don’t seem to be managing some challenges in the last year, whether people are spending less since the pandemic or the price of living has risen in the UK, there may be many reasons why the company made a loss but most importantly, people must not have been spending enough to outweigh the expenses and costs of the RANK Group.
KCQ’s #6 – UK publishing new legislation called the ‘White Paper’.
It is always a challenge when new legislation is enforced because companies have to take this onboard and thoroughly analysis their operations to ensure they meet it, specifically because the gaming and gambling markets are already highly regulated. This new legislation focused a lot on the protection of the customers when playing but this was already high in the RANK Group’s list of priority so they took the ‘White paper’ onboard in a positive manner. I feel this promotes the RANK Group because they care about their customers and are also obedient to the UK government because the government would not implement legislation if it was not necessary.
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Similarities/differences between my firm and other people’s firms
Through exploring other people’s blogs, I found some of their firms to be quite contrastingly different to mine. One blog that I read, had the firm Engenco, which I have never heard of. But after reading about them, and how they are engineering focused, I went to explore their financial statements and see how they are presented in comparison to my company. When first opening Engenco’s annual report, it had a different appearance and target compared to the RANK Group – Engenco seemed focused not so much on the customer experience but rather the safety and operational matters. Comparing the financial statements, they are quite different. To be honest, the Engenco financial statement was much simpler to understand as they only had two columns, 2023 and 2022. Whereas, the RANK Group has multiple columns which did confuse me.
Furthermore, I then found Nick’s blog from the Facebook Group, where he got allocated MegaPort which he said was based in Brisbane. This sparked my interest because I thought it was close to home for myself as I am from the Gold Coast. However, reading further about MegaPort it sounds rather complicated and like an intricate operation. This company again is contrastingly different to my entertainment company because MegaPort focused on providing networking solutions. After reading about another different company, I started to realise how broad each and every company is and how we have all been given such a unique firm. With that said, MegaPort’s annual report was much easier to understand and a lot more engaging to read than Engenco or RANK Group, simply because the text was a larger font and there were more diagrams illustrating their operation and statistics. But, their financial reports were very similar to the layout of Engenco, where they had two columns for 2023 and 2022.
Thoughts on my firm
When I first got my firm, I was a little disappointed in the fact that I didn’t know what it was. I think I was hoping for an easy route and to be given a well-known Australian company that I knew a lot about and everything was easy to find. However, with the RANK Group, it did require more time and effort to learn about them. It was definitely worth it as it challenged me and encouraged further research to gain a deeper understanding. It has also enabled me to get a better understanding of the entertainment market as previously I didn’t know much.
Prior to this assessment, I had never looked at an annual report, let alone a financial statement. So, it was daunting to begin with, a brand new company and a report that I had no idea how to read. But, once I began reading, I got a grasp on my firm and then was also able to follow their profits and losses in the financial statement. Although, there are still many accounting terms in the financial statements that I am yet to learn.
Concerns
One of my concerns associated with the RANK Group is that they are based in the UK. This means all their financial statements are in pounds and all their rules and regulations are from the UK government. For example, I wouldn’t even know what the legal age to gamble is in the UK. With that said, as I continue to explore their annual report in more depth, I am learning more about the requirements in the UK.
Another concern is my limited understanding of accounting terms and equations. Since learning the basic EQUITY = ASSETS – LIABILITIES, I have been able to make sure the balance sheet is balanced for the 2023 financial year, however, I cannot do many more calculations than that. My understanding of those terms is also still quite basic because this is my first accounting course in my aviation degree.
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Articles about the industry and my firm
This article from Statista is showing a forecast in the entertainment industry for UK – predicts quite a stark increase in revenue for the industry in the coming years. The article points out that the statistics include the effects of the Russia-Ukraine war which is something I did not consider to affect the entertainment industry. Therefore, that is another challenge that the industry faced, along with the COVID-19 pandemic. However, including these effects, it is still predicted to increase its revenue which is a positive for this industry, particularly after RANK Group made a loss in the 2023 financial year. Hopefully this means that they will make a profit in the 2024 financial year.
This article addresses some key challenges that RANK Group faced, stating why they made a loss in the financial year ending June 2023. It discusses that economic pressures are a key factor but stating they should be easing off now so they are expecting RANK to start making a profit. This consolidated my previous thoughts in the KCQ’s as RANK did identify in their annual report that this was a concern or challenge that they were aware of because economic pressures effect people’s spending habits.
Moreover, this article also establishes that their major companies, Mecca, Grosvenor and Enracha had revenue growth across their business, but the operating costs were a key determinant in the overall loss. However, RANK Group seem optimistic as the industry bounces back after the pandemic which they stated multiple times as it being a hard period for them.
This article was recently released explaining that the RANK Group are now making a profit in comparison to their loss in the last financial year. They identified many factors which contributed to the loss which I had not previously seen. For example, some of their casinos were shut down. However, the profit is supposedly due to one of their gambling brands tripling the earnings through customers coming more often and spending more. This goes to show that the UK must be in a stable economic position as their residents have more spending money.
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Engaging and discussing with others
Discussing with others about our firms, blogs or just general knowledge as proven to be very helpful as it has developed my confidence and knowledge further. Coming into this subject I was quite nervous when Martin mentioned that we had to engage with one another. This is because I often can’t make the lectures/tutorials live due to working full-time and therefore was not sure where else I would be able to interact with other students considering we live all across Australia and beyond. But when I found out about the Facebook page, I immediately joined it and have also been regularly keeping an eye on the Moodle page, specifically the Blog Links Forum, to visit other people’s blogs and to learn more about them. I then got confident to comment on a few peoples blogs and reply on Facebook too. However, while reading other people blogs, and learning about their firms, I gained an understanding of how. Different financial statements look and more generally, and understanding of the variety of firms we have in the world because I had not heard of many.
Studiosity - thoughts
Prior to this subject, I had used Studiosity multiple times for gain feedback on other assignments. I always tend to send them my first draft because I am always looking for ways to improve my writing and after having read my own writing multiple times, it becomes a bit blurry so getting an outside perspective always helps. Anyway, I submitted my ‘Step 3’ for feedback to Studiosity and they provided valuable feedback in less than 6 hours. I have always been very impressed by the efficiency of their turnaround. When reading through the feedback, they are very thorough and offer some positive feedback along with some constructive advice in regards to structure, spelling, punctuation and writing style. However, one challenge I discovered when submitting this particular assignment was that the structure was quite informal and the use of personal pronouns was permitted. Majority of the documents submitted to Studiosity are usually strictly adhered to a particular format, like an essay or report, but rather this assessment did not follow any of those styles. I did comment this to Studiosity when I first submitted to ensure they understood what was required in this particular assessment task. Overall, I did find their feedback useful as it helped me see areas where my phrasing was unclear or where simple punctuation mistakes were happening. I will definitely be using Studiosity again for future assignments as they provide non-bias feedback, while providing encouragement about what I have already done.
Favourite 3 blogs
1. Jaslyn Musumeci’s blog
Jaslyn’s blog was one of my favourite blogs because the attention to detail and engagement was there from the moment I opened her blog. It had a clear welcome page where she introduced herself and provided a picture so I could put a name to her face – and I feel like this is important when we are all studying quite remotely. Then I went further into her blog and read about her company, EVT. Her writing style was very engaging and was with an active voice so made me want to keep reading. Her blog was very personalised which I loved and it also included some beautiful pictures from where she lives which was something fun to look out, as opposed to reading paragraphs of writing all the time.
2. Emma Rach’s blog
I felt like I could really relate to Emma’s blog as it was titled, ‘The stressed out student’. I feel like studying, working and juggling life can be rather stressful so to hear that someone else is going through the same thing, makes me feel not so alone. However, I do not have children like Emma does, so it is a true inspiration to see her managing study, work and a family too.
Moreover, I really enjoyed reading her blog as it was not to overwhelming with information, but rather a simplistic design and was easy to follow. She used multiple images so, as the audience, could relate to her more.
3. Bella Scoble’s blog
The aesthetic appeal of Bella’s blog, I absolutely loved. It was all matching and gave quite a calming and simplistic look. The colours that she used, like pastel green and white, were appeasing and elegant. Although she is still developing her blog, the ‘About’ section was short and concise which gave an overview of her life. I discovered that she has a lot of experience within the workface and business industry particularly. This is quite aspiring because I do not have as much experience as I have been studying since I left school. Reading the ‘About’ section is by far one of my favourites because it enables me to get to know fellow students, even though I have never met them. And I feel like I can relate to them even though we do not know each other’s full life stories.
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