Reflecting on the results of the Rank Group’s first half of the 2023-24 fiscal year, CEO John O’Reilly expressed optimism about the company’s future prospects in light of potential land-based reforms outlined in the Gambling Act review white paper. He stated that Rank is well positioned to take advantage of the changes expected to be implemented in the coming months.
The white paper proposed several measures for land-based venues, and Rank anticipates benefiting from these changes pending the ongoing consultation process. The company expects to see the number of gaming machines in the Grosvenor Casino estate double and electronic payments to be allowed in casinos and bingo venues.
However, while the white paper initially suggested a 50:50 ratio for category B and C/D gaming machines, Rank noted that a subsequent consultation proposed altering the ratio to 2:1 or 3:1 category B3 machines to category C or D.
Regarding the company’s financial performance, Rank reported a 7.0% increase in net gaming revenue (NGR) to £362.6 million for the first half of the year, showing positive growth compared to the previous year. O’Reilly attributed this growth to the company’s strong operational leverage and stated that Rank is on the path to improving profitability.
Grosvenor venues generated the highest revenue at £167.5 million, a 10.1% yearly increase, with London contributing £56.4 million and the rest of the UK contributing £111.1 million. The digital division also saw revenue growth, with Mecca and Enracha generating £67.2 million and £19.5 million, respectively.
Mecca experienced an 8.5% increase in revenue and underwent the closure of 20 loss-making venues, resulting in a total of 55 Mecca venues. Despite the closures, total visits were up 2% and total spend per visit increased by 7%.
Enracha, Rank’s Spanish brand, received an £800,000 capital investment, resulting in a 9.5% revenue increase and growth in customer visits and spend per visit. Overall, the company’s gross profit for the period stood at £154.3 million, an 18.2% increase from the previous year.
The company also reported £5.4 million in separately disclosed items impacting operating profit, with other operating costs further affecting the total operating profit. After considering net financing and taxes, Rank’s profit for the first half of the year was £13.5 million, representing a significant improvement from the previous year’s results.