Rank Group Optimistic About UK Gambling Act Reforms

Rank Group Sees Promising Prospects in Upcoming Gambling Act Reforms

Reflecting on Rank Group's H1 2023-24 results, CEO John O'Reilly said the company is "well positioned" to benefit from the land-based reforms outlined in the Gambling Act review white paper over the next few months.

The Gambling Act review white paper outlined several measures for land-based venues. Rank expects these measures to double the number of gaming machines in Grosvenor Casino estate and allow electronic payments in casinos and bingo venues. Moreover, it proposed a shift from the current 80:20 ratio of category B and C/D gaming machines to a 50:50 model. However, a further consultation suggests alterations to this ratio.

"We are well positioned to optimize the opportunities afforded by the UK government's planned land-based regulatory reforms," said O'Reilly. "These reforms cannot come soon enough in enabling us to modernize our proposition to better meet our customers' expectations."

In Rank’s half-year results, net gaming revenue (NGR) totaled £362.6 million for the first half of the year, a 7.0% increase from the previous year. Grosvenor venues led the way, bringing in £167.5 million in revenue, with London contributing £56.4 million and the rest of the UK £111.1 million.

Rank's digital division also performed well, generating £108.4 million in revenue, a 7.5% increase. Mecca and Enracha reported revenues of £67.2 million and £19.5 million, respectively.

The company's proactive approach to managing its venues has led to improved profitability, with strong operational leverage.

The cost of sales for the half-year totaled £208.3 million, resulting in a gross profit of £154.3 million, an 18.2% increase from the previous year. Rank presented underlying figures to exclude large and non-recurring items, making it easier to assess the company's performance and profitability.

While separate disclosed items had an impact of £5.4 million on operating profit, other operating costs further reduced operating profit to £21.6 million. After accounting for net financing and taxes, the profit for H1 was £13.5 million, marking a significant improvement from the previous year.