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Rank Group reported another quarter of growth and kept its full-year profit outlook in place. Land-based venues stayed solid, digital added support, and management said current plans still support a higher earnings result for the year.
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The clearest lift came from the venue side. Grosvenor Casinos brought in £95.0 million in Q3 revenue, up 5%, and gaming machines led the gain with 10% growth after about 850 extra machines were added following UK rule changes. Rank is also building out in-person sports betting, with rollouts active in 38 of 50 venues and trial activity running in Luton, Leicester, and Reading.
Across the group, like-for-like net gaming revenue for the three months to March 31 reached £205.4 million. For the first nine months of the financial year, revenue rose 6% to £625.2 million. Rank said it still expects like-for-like operating profit of £68 million for FY2025 to 2026, ahead of the £63.7 million posted in FY2024 to 2025. Management also repeated a medium-term target of at least £100 million in operating profit.
Interim Chief Executive Richard Harris said:
“It was pleasing to see continued revenue growth across all businesses and strong profit conversion in Q3, despite a tough macroeconomic backdrop. The results demonstrate the resilience of the business, the strength of the customer proposition, and the growth initiatives we have in place.”
Digital revenue rose 4% to £60.9 million. UK digital only grew 2%, but Spain helped balance that with 14% growth. Even so, digital remains the part under most pressure after the UK Remote Gaming Duty went from 21% to 40%. Rank said the annualised hit before mitigation is about £46 million.
Management has already responded with cost cuts and contract changes. Headcount has been reduced, marketing and sponsorship spending has been lowered, and supplier terms have been renegotiated. At the same time, Rank kept spending in performance marketing and customer incentives, which shows the group is still trying to protect growth while trimming costs.
Harris said:
“Having implemented the actions required to mitigate much of the impact of higher RGD in our UK digital business, and with clear plans in place to drive sustainable revenue growth, the group is well placed to deliver the medium-term objective of generating at least £100 million operating profit.”
Elsewhere, Mecca revenue rose 5% year on year to £37.8 million. That business should also benefit from the end of bingo duty, which Rank expects will save about £6 million a year and help drive double-digit operating profit growth. In Spain, Enracha posted £11.7 million in revenue, up 9%, helped by a 27% rise from gaming machines.
Rank did flag one outside risk. The company said conflict in the Middle East creates ongoing uncertainty around international travel. Even so, it still expects revenue growth to continue in Q4.
Outside analysts gave a mixed but constructive read. Regulus Partners said Rank needs to keep backing its land-based estate while avoiding a weak online product, adding:“This will require investment more than mitigation.” Peel Hunt said: “We could upgrade our forecasts by more, but we remain uncertain about the impact of increased UK remote gaming duty. However, we still see a clear route to over £100m of operating profit as investments continue to pay off.”