Rank Group Reports Robust Q3, Gaming Revenue Increases 5% to £205.4M

(AsiaGameHub) –   The Rank Group has announced a further quarter of growth and has maintained its full-year profit forecast. Its physical venues performed robustly, while its digital operations provided additional momentum, with management confirming that existing strategies are expected to lead to improved annual earnings.

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Good to Know

• Third-quarter like-for-like net gaming revenue increased by 5% to £205.4 million.
• The Group anticipates an operating profit of £68 million for FY2025-2026, exceeding the previous year’s £63.7 million.
• Revenue growth was reported across the Grosvenor, Mecca, digital, and Spain divisions.

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Land Based Growth Keeps Rank On Track

The most significant improvement originated from the company’s brick-and-mortar locations. Grosvenor Casinos generated £95.0 million in Q3 revenue, a 5% increase, with gaming machines driving the advance by growing 10% following the addition of approximately 850 new units after UK regulatory amendments. The company is also expanding its retail sports betting offering, which is now live in 38 out of 50 venues, with trials underway in Luton, Leicester, and Reading.

Group-wide, like-for-like net gaming revenue for the quarter ending March 31 hit £205.4 million. For the first nine months of the fiscal year, revenue was up 6% to £625.2 million. The Group reaffirmed its expectation for a like-for-like operating profit of £68 million for FY2025-2026, which is higher than the £63.7 million achieved in FY2024-2025. Management also restated a medium-term goal of reaching at least £100 million in operating profit.

Interim Chief Executive Richard Harris stated:

“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 increased by 4% to £60.9 million. The UK digital segment saw only a 2% rise, but this was offset by a 14% surge in Spain. Nonetheless, the digital division continues to face the most pressure due to the increase in the UK Remote Gaming Duty from 21% to 40%. The company estimates the annualised financial impact before mitigation measures is approximately £46 million.

In response, management has executed cost-reduction initiatives and renegotiated contracts. This has involved reducing staff numbers, cutting marketing and sponsorship expenditures, and securing new terms with suppliers. Concurrently, Rank has sustained investment in performance marketing and customer incentives, indicating a strategy to safeguard growth while managing expenses.

Harris commented:

“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.”

In other areas, Mecca revenue grew 5% year-on-year to £37.8 million. This business is also poised to benefit from the abolition of bingo duty, which is projected to save around £6 million annually and contribute to double-digit operating profit growth. In Spain, Enracha reported revenue of £11.7 million, a 9% increase, bolstered by a 27% jump in gaming machine revenue.

The company did highlight one external risk, noting that conflict in the Middle East continues to create uncertainty regarding international travel. Despite this, it anticipates revenue growth will persist into the fourth quarter.

External analysts provided a mixed yet generally positive assessment. Regulus Partners noted that Rank must continue to support its land-based portfolio without allowing its online offering to weaken, 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.”