Rank Group sees profits soar as tech investment pays off
Rank, which owns Grosvenor Casinos and Mecca Bingo, said its performance was aided by inflation receding and disposable incomes improving in its core UK market. With all digital and land-based businesses in growth, like-for-like net gaming revenue (NGR) across the group was up 9% year-on-year to £734.4m.
Rank’s digital cross-channel customer revenues continue to grow faster than overall group revenues, up 16% during the year. The group said the key enabler for this was its proprietary technology platform, which saw several enhancements successfully delivered during the year. In particular, Rank cited the impact of its single content management system across all of its UK digital brands and an improved app for the Grosvenor brand.
Grosvenor, Rank’s largest division, saw NGR growth of 9% to £331.3m across its venues. Mecca grew by 8% to £136.6, while its Spanish land-based venues brand Enracha was up 7% to £38.5m. The digital business saw NGR growth of 12% to £226.0m. The UK and Spain grew by 11% and 16% respectively.
While not releasing separate figures for Q4, Rank referred to “strong trading” in the final three months of the year. It said like-for-like NGR increased 14% year on year, “providing good momentum into 2024-25”.
Rank’s cost-cutting drive
Moving to profitability, like-for-like underlying operating profit for the year was £46.5m. This was slightly ahead of analysts’ consensus and more than double the prior year’s £20.1m.
The group has sought to drive cost efficiencies and said good progress is being made in enhancing expenditure controls. A cost-cutting drive was announced in December 2022 as it sought to reverse a drop in operating profit within Grosvenor.
Total capital expenditure in the 2023-24 year was £46.7m, which was up slightly on the prior year’s £44.1m. This total included investments delivered across the group’s venues and proprietary technology. Employment costs increased by 11% in the year, driven by the combined effect of wage inflation and the reinstatement of colleague bonuses.
In a boost for shareholders, and a sign of group confidence, Rank’s board is recommending the resumption of dividend payments. This would be 0.85p as a full-year dividend, with plans for an interim dividend in January 2025.
CEO hails ongoing investment plan
Chief executive John O’Reilly said: “This has been a year of strong financial, operational and strategic progress for Rank. We are continuing to rebuild profitability following the impact of lockdowns and the material inflationary pressures experienced in recent years.
“Trading continues to improve due to ongoing investment in our people, our products and the facilities within our venues businesses, and the continued development of the proprietary technology which is driving the growth of our digital business.
“With some important developments within our proprietary technology now in place, we are increasingly delivering a seamless and tailored cross-channel experience for our customers, leveraging our key area of competitive advantage.”
Rank was hit hard by the pandemic with its land-based venues in the UK and Spain closed for long periods. It made a loss of £82.4m in 2020-21 before posting group underlying profit of £40.4m in 2021-22.
In 2022-23, Rank posted a 5.9% increase in revenue, although increased impairment costs led to a statutory net loss.