Rank Group has reported a 13% year-on-year increase in like-for-like (LFL) net gaming revenue (NGR) for the first half of the 2024/25 financial year, reaching £401.8 million ($500 million). This substantial growth was fueled by solid performances across both its land-based venues and digital operations, leading to a 55% rise in underlying LFL operating profit to £32.9 million.

Rank Group Reports 13% Increase in Like-for-Like Net Gaming Revenue for H1 2024/25

Additionally, statutory operating profit more than doubled, surging 148% to £40.2 million, while profit before tax soared 234% to £34.7 million. The company credited its financial improvements to robust trading performance and cost efficiencies. However, despite these gains, net free cash flow declined sharply by 82% to £4.3 million, mainly due to capital expenditures and working capital movements.

Rank Group also announced an interim dividend of £0.65 per share, marking the first shareholder payout since before the COVID-19 pandemic.

Land-Based Venues Continue to Drive Growth

The company’s land-based venues division, which includes Grosvenor Casinos and Mecca Bingo, delivered a 12% increase in LFL NGR, reaching £281.6 million. Grosvenor Casinos played a crucial role in this growth, generating an average weekly NGR of £7.3 million, exceeding internal forecasts.

Rank Group has outlined its medium-term goal of reaching £8 million in weekly NGR, supported by ongoing customer experience enhancements and risk management improvements. These initiatives aim to strengthen player engagement and optimize the overall operational efficiency of the company’s venues.

Digital Segment Shows Robust Performance

Rank’s digital operations also experienced notable growth, with LFL NGR increasing by 14% to £120.2 million. This expansion was largely driven by the introduction of new proprietary mobile apps for Grosvenor and Mecca, designed to enhance user experience and accessibility.

The company expects these digital innovations to contribute to an 8-12% compound annual growth rate (CAGR) in digital revenue. Rank’s continued investment in proprietary technology is anticipated to further solidify its market position and drive long-term revenue growth.

Upcoming Regulatory and Cost Challenges

Despite its strong financial performance, Rank Group has acknowledged the potential impact of regulatory changes and rising operational costs in the fourth quarter (Q4) of the financial year. Key regulatory challenges include:

• Statutory levy on gambling operators to support responsible gambling initiatives.
• Maximum stake limits on online slots, set to be introduced in April 2025.
• Increases in employment costs, driven by higher National Insurance contributions and rises in the National Living Wage.

These factors are expected to place pressure on operating margins, but Rank remains confident in its ability to mitigate these challenges through strategic revenue growth and operational efficiencies.

Strategic Business Developments and Future Outlook

Rank Group has continued executing its digital transformation strategy, successfully completing the £7.5 million sale of its non-proprietary digital brands in the UK in December 2024. This move is expected to streamline the company’s digital portfolio, allowing it to focus on the growth of its in-house platforms.

Furthermore, the company is preparing for the anticipated land-based gaming reforms in the UK, which could introduce greater operational flexibility and enhanced gaming machine limits. These regulatory changes have the potential to positively impact Rank’s financial performance in the upcoming financial year.

Conclusion: Rank Group Poised for Continued Growth

Rank Group’s first-half results for the 2024/25 financial year underscore its resilience and adaptability in an evolving regulatory landscape. With strong performances across both its land-based and digital divisions, alongside ongoing technological advancements, the company remains well-positioned for sustained growth.

FAQs About Rank Group’s H1 2024/25 Financial Performance

1. What was Rank Group’s financial performance in the first half of the 2024/25 financial year?

Rank Group reported a 13% year-on-year increase in like-for-like (LFL) net gaming revenue (NGR), reaching £401.8 million ($500 million). The company also recorded a 55% rise in underlying LFL operating profit to £32.9 million, while statutory operating profit more than doubled, increasing 148% to £40.2 million. Profit before tax surged 234% to £34.7 million.

2. What contributed to Rank Group’s financial growth?

The strong financial performance was driven by growth across both land-based venues and digital operations. Key factors included:

• Increased player engagement at Grosvenor Casinos and Mecca Bingo.
• Successful implementation of cost efficiencies.
• Digital expansion through proprietary mobile applications.

3. What was the impact on net free cash flow?

Despite overall financial gains, Rank Group’s net free cash flow declined by 82% to £4.3 million. This decline was attributed to capital expenditures and working capital movements.

4. Has Rank Group resumed shareholder dividends?

Yes, Rank Group announced an interim dividend of £0.65 per share, marking its first shareholder payout since before the COVID-19 pandemic.

5. How did Rank Group’s land-based venues perform?

The company’s land-based venues division, including Grosvenor Casinos and Mecca Bingo, saw a 12% increase in LFL NGR to £281.6 million. Grosvenor Casinos contributed significantly to this growth, with an average weekly NGR of £7.3 million, exceeding expectations.

6. What are Rank Group’s future targets for land-based revenue?

Rank Group aims to increase weekly NGR to £8 million in the medium term by enhancing customer experience and risk management practices.

7. How did Rank Group’s digital operations perform?

The company’s digital segment saw a 14% increase in LFL NGR to £120.2 million, driven by the rollout of new proprietary mobile apps for Grosvenor and Mecca.

8. What is Rank Group’s expected growth in digital revenue?

Rank expects its digital operations to grow at a compound annual growth rate (CAGR) of 8-12%, supported by continuous investment in proprietary technology.

9. What regulatory changes could impact Rank Group’s future performance?

Rank Group faces several upcoming regulatory challenges, including:

• Statutory levy on gambling operators to fund responsible gambling initiatives.
• Maximum stake limits on online slots, set to take effect in April 2025.
• Higher employment costs due to increases in National Insurance and the National Living Wage.

10. How is Rank Group planning to mitigate these challenges?

The company remains confident in offsetting regulatory and cost pressures through continued revenue growth and operational efficiencies.

11. What strategic moves has Rank Group made to strengthen its business?

Rank completed the £7.5 million sale of its UK non-proprietary digital brands in December 2024. This move allows the company to focus on in-house platform development and digital growth.

12. How will land-based gaming reforms in the UK impact Rank Group?

The anticipated land-based gaming reforms are expected to bring greater operational flexibility and increased gaming machine limits, which could enhance Rank’s financial performance in the coming year.