With revenue up nine per cent over the last year and investments made in a ‘number of key technology developments,’ Brtish casino and bingo operator Rank Group has said it is ‘well-positioned to take advantage of the much needed land-based reforms which will help to further modernise’ the sector.
Underlying operating profit for the year was £46.5m, slightly ahead of analysts’ consensus and more than double the prior year’s £20.1m, reflecting the significant operating leverage in the business.
The company’s Grosvenor casino venues saw revenue grow by nine per cent year on year, with the London estate growing by 10 per cent and the rest of the UK growing eight per cent. Customer visits grew nine per cent and spend per visit decreased one per cent. Active customers grew two per cent.
Rank’s Mecca bingo venues grew revenue by eight per cent on the prior year with customer visits growing two per cent and the spend per visit increasing six per cent. 44 per cent of the 187,000 new customers in the year were under 35 years old, reflecting the continued broad appeal of Mecca. Enracha venues LFL NGR grew seven per cent on customer visits growing six per cent and spend per visit increasing one per cent.
Digital LFL NGR grew 12 per cent year on year, towards the top end of the annual growth opportunity outlined at the November Capital Markets Day, with particularly strong growth in the Grosvenor and Mecca cross-channel brands and in the Yo brand in Spain. Margin expansion now expected to be greater than 600 bps in the medium term.
A number of key technology developments were successfully delivered in the year including a single content management system now serving all UK facing brands, the launch of the first in-house developed app for the Grosvenor brand and the successful build of the central engagement platform (a single customer database serving all UK facing businesses). The next phase of the development programme is focused on the seamless cross-channel customer experience.
The Spanish facing digital brands were transferred to Ceuta in December 2023 delivering a 10% saving in gaming tax from the start of the second half.
The Group has a strong three-year programme of growth initiatives in place for each of its businesses focused on: cash maximisation in land-based bingo; recovery and growth in our Grosvenor venues business; scaling the digital business both in the UK and internationally and maximising the opportunities of the anticipated land-based legislative reforms for the UK’s casino and bingo sectors.
John O’Reilly, Chief Executive of The Rank Group said: “This has been a year of strong financial, operational and strategic progress for Rank. We are continuing to rebuild profitability following the impact of lockdowns and the material inflationary pressures experienced in recent years. Trading continues to improve due to ongoing investment in our people, our products and the facilities within our venues businesses, and the continued development of the proprietary technology which is driving the growth of our digital business.
“With some important developments within our proprietary technology now in place, we are increasingly delivering a seamless and tailored cross-channel experience for our customers, leveraging our key area of competitive advantage. We are well-positioned to take advantage of the much needed land-based reforms which will help to further modernise our casino and bingo propositions to better meet the expectations of today’s customers and we look forward to the Government confirming the timetable for the required secondary legislation.
He added: “We have started the new financial year as we finished the previous one, with good momentum across all businesses. With inflation receding, disposable incomes improving, investment continuing to be made in the customer proposition and a strong pipeline of growth initiatives underway, we are confident in the future prospects of the Group.
“It would not be possible to deliver this improved performance without our excellent colleagues who continue to excite, entertain and protect their customers, support their local communities and contribute fully to the progress we are continuing to make.”
The sale of the Group’s shareholding in the Indian rummy brand, Passion Gaming, was successfully completed in June 2024. In the current year Passion Gaming represented less than two per cent of Digital’s total NGR, on a proforma basis.
Discussions regarding the sale of the UK Digital non-proprietary (‘multi-brand’) business are well advanced and the Group expects the disposal to complete in the next few months.
