Rank NGR up 7% as group warns slots stake caps could mean £4m online profit hit
Maidenhead-based operator reports huge swing in underlying operating profit to a positive £16.2m as plans to sell Indian rummy brand come to light
The Rank Group has posted a 7% year-on-year (YoY) rise in underlying like-for-like net gaming revenue (NGR) to £362.6m for its fiscal H1 2023-24.
The London-listed land-based and online operator praised “good revenue and profit growth across all of the group’s business units” as underlying and statutory profit also leapt.
Underlying like-for-like operating profit jumped from £2.7m to £21.7m while total group operating profit swung from a £103m loss to a £16.2m profit.
The operator said the swing was due to improved NGR performance across the whole business and no impairment charges compared to H1 2022-23 when firm was hit with charges of £95.4m.
Divisionally, Rank’s land-based and digital arms all reported NGR growth, with Grosvenor and Spanish Enracha venues performing ahead of the pack.
Grosvenor venues saw revenue increase 10% to £167.5m, while the Mecca business reported a 9% YoY jump to £67.2m.The Enracha subsidiary recorded a 10% YoY revenue jump, hitting £19.5m.
Rank’s digital division, which includes the online brands for Mecca, Grosvenor, legacy UK brands still powered by Stride, Enracha/Yo in Spain and Passion Gaming, saw underlying NGR increase 8% YoY to £108.4m.
Additionally, digital underlying operating profit leapt 87% from £5.4m to £10.1m despite downturns for Passion Gaming and the UK legacy brands.
Within the UK-facing digital offerings, Mecca’s NGR increased 11% YoY to £39.8m while Grosvenor’s grew 21% to £33.5m.
However, Stride legacy brands saw a 12% decline in NGR from £22.2m to £19.5m.
Yo and Enracha’s NGR increased 15% from £11.6m to £13.3m. The operator said that the Spanish business had successfully relocated to Ceuta – an autonomous city belonging to Spain on the north coast of Africa – in December 2023 and that it has soft-launched its live bingo product and expects a full rollout in Q3.
On the digital front, Rank confirmed its plans, as detailed at a Capital Markets Day in November, to deliver a single content management system, a new Grosvenor app, a focus on real-time data capabilities and the ongoing development of the RIDE platform.
However, bosses did point to a going concern relating to ongoing regulatory changes in the UK as a result of the white paper into the Gambling Act 2005.
The operator said that should proposed maximum stake limits on slots be introduced at an example rate of £5 and £2 for under-25s, it expected to face a £4m hit to digital profitability.
On strategy, Rank provided an update on the ongoing licence application for its YoBingo brand in Portugal. The firm said the approval process was nearing its end and that it expects to launch by the end of 2024.
The Maidenhead-based operator also revealed that due to local fiscal regulations in India, it has decided to divest the controlling stake in rummy business Passion Gaming to its founder and non-controlling equity stakeholder for an expected sum of £200,000.
Rank forecasts this to be completed during the second half of the current fiscal year and said the move will result in a write-down in assets to the fair value less cost of the sale totalling £500,000.
Looking ahead, Rank said that despite the ongoing “challenging economic environment”, like-for-like operating profit for the full year should be in line with internal expectations.
Reflecting on the results, John O’Reilly, Rank Group CEO, said he was pleased with how the business has bounced back after the pandemic and ongoing cost-of-living crisis.
He said: “After what has been a very challenging few years for Rank due to a wide range of external macro factors, we are starting to build revenues and, with our strong operational leverage, we are improving our profitability, with the group delivering revenue and operating profit growth across all businesses.
“We are making good progress with the strong pipeline of development initiatives in both our UK and Spanish digital brands to accelerate revenue and profit growth.
“Whilst we expect UK digital growth to be offset in the short term by the impact of new maximum online slot stakes and the impact of the statutory levy in the UK, we are confident in the opportunities of delivering a market-leading cross-channel experience for our Grosvenor and Mecca customers,” he added.