The Rank Group has reported a decrease in net profit for the first half of its fiscal year, as outgoing CEO John O’Reilly cautioned about upcoming cost challenges in 2026 and beyond due to increased tax rates in the United Kingdom. Despite a 5% year-on-year increase in total net gaming revenue to £420 million for the six months ending December 31, 2025, net profit fell by 26% to £18.5 million. This decline is primarily attributed to rising costs, notably taxes. The British government confirmed in November that the remote gaming duty will increase from 21% to 40% this April, with a new general betting duty for remote betting being introduced at 25% in April 2027, rising from 15%.
O’Reilly acknowledged the positive performance in terms of revenue growth across the Rank Group’s various businesses but highlighted significant challenges ahead due to heightened tax obligations. The tax increases present substantial hurdles for the UK digital segment of the business. Although the abolition of bingo duty was welcomed as a measure to preserve employment and investment in land-based operations, the rise in remote duty is seen as a considerable strain.
In the first half of the financial year, Rank’s Grosvenor venues generated the highest revenue, reaching £204 million, a 6% increase driven in part by the installation of 850 additional gaming machines across its establishments. These enhancements were facilitated by changes in land-based casino regulations that came into effect in July, permitting more machines based on specific floor space metrics. Meanwhile, Rank’s Mecca venues saw a 4% revenue increase to £67 million, despite a slight decrease in customer visits and the closure of a location in Scarborough. The Spanish Enracha business also experienced a 6% revenue rise to £21 million, with a stable number of customer visits but increased spending per visit.
Rank’s digital operations reported an 8% increase in revenue to £114.8 million for the period, with a notable 18% rise in average revenue per customer. In the UK, digital revenue improved by 9%, with the Grosvenor digital offering experiencing a 17% increase and Mecca digital up by 5%. Spanish digital brands YoBingo, YoCasino, and YoSports collectively saw a 1% revenue rise.
However, the growth in revenue was offset by increased costs. The cost of sales rose by 3.5% to £236.7 million, while other operating expenses increased by 4.1% to £153.3 million, resulting in an 11.1% decline in operating profit to £31.3 million. With finance-related expenditures amounting to £7.4 million, pre-tax profit stood at £23.9 million, marking an 18.7% decrease year over year. After accounting for additional taxation costs of £5.4 million, Rank’s net profit for the half-year totalled £18.5 million, falling by 25.7% from the previous year.
As O’Reilly steps down, Richard Harris, the Chief Financial Officer, will assume the role of interim CEO. O’Reilly, who has led the company since May 2018, expressed confidence in Harris’s ability to guide Rank through its forthcoming challenges. The transition comes as John Ott, former senior advisory partner at Bain & Company, steps in as the new chairman of Rank.
Looking ahead, the Rank Group will need to navigate the complex landscape of increased taxation and regulatory changes while striving to maintain its market position. Strategic adjustments and cost management will be critical as the company continues to prioritize customer experience in a shifting regulatory environment. The next steps for Rank include implementing cost-mitigation strategies and ensuring compliance with the new tax regulations, as the implications of these changes unfold throughout 2026 and beyond.