Q&A: Rank Group CEO on operational gains and offloading non-core assets

Rank Group CEO John O’Reilly is already thinking about what’s next. Speaking to EGR fresh from the gaming-led operator’s fiscal H1 report being published, the CEO insists improvements can still be made across the business.

That vision comes after the operator posted an 11% year-on-year (YoY) jump in net gaming revenue to £362.6m, while operating profit soared 148% to £40.2m.

While the Grosvenor land-based casino business continues to take the lion’s share of group revenue, improvements to the digital arm has seen consequential gains, with plans to further ramp up omnichannel capabilities a core facet of O’Reilly’s H2 plans.

And while the licence application process remains ongoing in Portugal to launch bingo, along with headwinds in the UK with hikes to national insurance contributions, the statutory levy and the £5 slots stake cap all coming into play, O’Reilly remains bullish about the coming months.

That confidence was reflected in the group’s stock yesterday, which hit as high as 92p, with the company’s shares up by more than a quarter in the past 12 months.

Here, O’Reilly tells EGR where the next set of gains for the business will come from, why a focus on core assets is the best bet and why driving up revenue is the solution to setbacks.

EGR: Rank Group has had a strong first six months of the financial year, with NGR up 11% on a reported basis. Could you reflect on H1 2024-25 briefly?

John O’Reilly (JOR):  We’ve had a good first half of the year. We’re pleased with the progress we are making. We’re in a pretty good position. We have continued to invest in this business, despite the challenges, particularly the inflationary challenges. During the pandemic, we were burning cash. We came out of lockdown and then we’re into high levels of inflation.

As I always say, a £10 chip is a £10 chip. It’s not an £11 chip just because of the rate of inflation. We don’t have a pricing mechanism to pass inflation on to the customer. But despite that, we continue to invest, and I think we’re now starting to reap the rewards, so we’re in pretty good order. But, as ever, there’s still a lot to be done.

EGR: What do you consider the top priorities?

JOR: Our sweet spot is cross-channel. We’re the strongest casino operator in the UK, and I’d like to think we’re the strongest bingo operator. We’re probably biggest by way of revenue in the UK. In the casino world, I’m a pretty serious consumer. For me, it’s kind of serious fun, and that is our sweet spot. People for who gambling is considered a serious but fun activity.

That’s where we focus our energies, and for the casino space, that’s particularly prevalent across those consumers who like to play in venues but also like to play online. That’s our strength, and we’ve done loads of good work in that space. But we’ve a long way to go to offer that seamless, tailored and personalised cross-channel experience for the consumer, and that’s the part we’re on in the coming six months.

We are working hard to deliver single membership from Mecca customers between now and the end of June and hopefully we’ll get that across the line. Single membership means you’re a Mecca member regardless of channel. At the moment, we do that, but it’s a pretty clunky way in which we recognise you cross-channel and you end up with two memberships. What we’re moving towards is one single membership.

EGR: You’ve now got proprietary apps live for both Mecca and Grosvenor. How much does having that in-house product move the needle for the group?

JOR: We’ve launched the Mecca app, which we did very successfully. Our revenue from apps has been tiny relative to the marketplace. We are now growing rapidly on the back of the new apps we’ve launched for Mecca and Grosvenor. We want them to be is cross-channel apps. So, during the coming months, we’ll be merging our venue-based apps into the Mecca Bingo app. We’ve got two apps that currently operate in our venues.

There’s My Mecca, which you can use to order your [bingo] books, order drinks and order food, and we’ll be merging that into the MeccaBingo.com app. Ultimately, that ends up going to the single wallet for Mecca customers, and the ability to use that wallet in the venue. In Grosvenor, we have a single wallet. We still have two distinct memberships. We do recognise you cross-channel, but it’s not as seamless as we want it to be. So, a lot to do over the coming years to deliver that really seamless, tailored service. That’s the path we’re on.

EGR: You mentioned the continue “focus on innovation and investment” in the report, but product moves are in the pipeline?

JOR: We’ve got two new things coming up. We’ve launched a number of new, live-from-our-venue casino games online. Another three venues delivered in the last couple of months. We have got a new game called Cash Dash, which is a big game in venue that we’ve never played online. We are now moving that game to our online customers. And we launched a joint-liquidity game a few years ago. It worked reasonably well, but not quite as well as I wanted it to. The purchasing process for the customer was a bit awkward. You had to kind of buy it in venue in the last few minutes leading up to the game, which wasn’t ideal. We’ve changed that. So, one single game will be launching with the ability to pre-buy both in venue and online.

EGR: The sale of the non-proprietary brands to Broadway has come after the disposal of Passion Gaming last year. Is this a case of trimming the fat and funnelling full focus into your core business?

JOR: Passion is a lovely business, but the [Indian] tax regime radically changed from our perspective and wasn’t economically viable. So, we decided that was the right time to exit that business and were delighted we left it in the very capable hands of Bobby Garg and his team who founded and run that business.

The multi-brand business, or non-proprietary business, was part of the Stride Gaming acquisition, and they were several brands operating on third-party platforms. It’s not been a business that’s been growing for us. We decided it was non-core, and it was the right time to sell. So we took the step, though maybe it took a bit longer than we expected, but we completed the sale in December, and we’ve now got a much cleaner operation as a consequence.

EGR: You noted employment costs are going to be up by around 10% for the full year. Was the UK national insurance and living wage increase expected and how are you mitigating against it?

JOR: We employ 7,800 people, of which we employ 6,500 of those in the UK, so we were hugely labour-intensive business. And that’s never going to change. We mitigate as best we can with productivity improvements, making sure our rotas are reflecting the needs of the consumer and so on.

We’re doing more again – more efficiency improvements, more focus on productivity. But ultimately, we’re a hospitality business. We give great service to our customers. That’s the business we’re in. So, it’s a hit, but we’ve just got to grow revenue. That’s what we’re going to do. We are growing revenue. We’re going to continue to grow revenue. We’ve been investing in this business in order to ensure it’s a resilient business and can deal with these bumps along the way.