Rank Group announced a robust 9% increase in revenue for the first quarter of its 2025-26 financial year, primarily driven by significant growth in its digital business. For the period ending 30 September, Rank’s net gaming revenue reached £210.2 million, surpassing the £197.5 million recorded in the same timeframe the previous year.
The group experienced growth across all its core business segments, with digital operations seeing the most substantial rise. Digital revenue jumped 13% year-on-year to £61.6 million in Q1. Notably, Grosvenor digital revenue surged by 31%, while Mecca online revenue increased by 9%. In contrast, Rank faced a slight 1% decline in net gaming revenue in Spain, attributed to earlier platform capacity issues. However, Rank remains optimistic, anticipating a rebound in Spain as they prepare to launch a new bingo platform in the second quarter.
In the realm of land-based operations, Rank reported a notable 8% increase in net gaming revenue from Grosvenor venues, totaling £102.7 million. This segment generated the most revenue for Rank, aided by a 5% increase in customer visits and a 3% increase in spend per visit. Performance outside of London was particularly strong, with a 10% growth, while London itself saw a 4% growth. A quieter summer in London was offset by an enhanced performance at Victoria Casino, which underwent a major refurbishment completed in July.
Grosvenor’s electronic table gaming revenues rose by 11%, reflecting a “return on investment” from recent terminal upgrades. Table games revenue nudged up by 3%, and gaming machine revenue ballooned by 12% following the introduction of additional B1 gaming machines across the estate. This move aligns with Rank’s commitment to capitalize on new land-based rules in the UK that took effect in August, including provisions for more gaming machines and the potential for in-house sports betting. Rank is considering launching sports betting at its UK casinos.
Mecca venues experienced a 5% increase in revenue, despite a slight 1% drop in customer visits. However, the spend per customer grew by 6% compared to the past year. Enracha venues in Spain also contributed with a 5% revenue uptick for the quarter.
Chief Executive John O’Reilly expressed satisfaction with the solid start to the year, suggesting it puts the group on track to achieve its full-year targets. O’Reilly commented on the positive trajectory: “We have started the year strongly and are confident of delivering group like-for-like operating profit in line with expectations, notwithstanding the significant cost increases we have incurred in employer national insurance contributions, the national living wage, and the new statutory levy.”
He also emphasized the strategic rollout of additional gaming machines in Grosvenor venues, with 850 incremental machines expected to be added by the end of the first half of fiscal 2025-26. “We are on track with our installation programme,” he remarked.
The conversation around potential changes in gambling tax in the UK was also addressed. Speculation about the government moving towards a single tax rate for all remote gambling looms large, with suggestions that this could be part of upcoming budget changes in November. O’Reilly emphasized the importance of making careful decisions about tax adjustments, particularly given Rank’s significant contributions to the UK economy. The group reportedly generated £44.6 million in profit after tax last year, while paying £188.0 million in taxes to HMRC and local authorities.
“Speculation regarding tax changes in the upcoming budget is, inevitably, hanging over the business,” O’Reilly stated. “We are engaged with the treasury on the implications of tax changes on the viability of our venues, employment levels, future investment, and the customer. With its strong UK focus, Rank Group is certainly paying its fair share.”
A second viewpoint on Rank’s performance might consider the challenges posed by the changing regulatory landscape and increasing operational costs. While growth figures are positive, the impact of potential tax changes and rising costs could pressure margins in the coming quarters. Analysts may highlight that balancing these factors will be crucial for maintaining momentum and ensuring sustained profitability. The industry context shows that while Rank’s digital expansion and investment in land-based venues have provided a robust start to the year, they must remain agile and responsive to external economic pressures to sustain their growth trajectory.
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