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Rank sees full-year profit ahead of market forecasts/ Image source: Adobe
  • First-half revenue up 13%
  • Operating profit up 55%
  • Full year to be ahead of expectations

Casino and bingo operator Rank Group (RNK) said it expects full-year operating profit to be slightly ahead of market expectations after delivering continued strong momentum in revenue and profit growth in the first half to 31 December 2024.

The shares responded positively to the update, rising almost 3% to 92.3p, taking gains over the last year to 28% compared with an 11% advance for the FTSE-All Share index.

IMPROVING PERFORMANCE

Like-for-like net gaming revenue increased 13% to £401.8 million driven by strong growth across the Grosvenor casino estate which delivered £7.3 million average net gaming revenue per week, ahead of expectations.

Management sees this building to £8 million per week in the medium term, excluding the anticipated benefits from land-based regulatory reforms which are expected to be implemented in the summer.

The reforms will enable the company to more than double the number of gaming machines across the Grosvenor estate and permit sports betting.

Strong growth was also seen across Digital which saw like-for-like net gaming revenue increase by 14% to £120.2 million while the Mecca bingo division grew revenue by 6% to £68.6 million.

Underlying group operating profit increased 55% to £32.9 million despite the businesses absorbing higher energy, supply chain and employment costs.

CEO John O’Reilly commented: ‘We are pleased to deliver another good set of results as we continue to take advantage of the growth opportunities available to us and maintain a strong momentum across all our businesses.

‘The second half will see inflationary employment cost headwinds and the negative financial impact of some of the measures in the Gambling Act, but we are confident that our ability to both grow revenues and secure further cost efficiencies will help us to sustain our positive profit trajectory.’

EXPERT VIEW

Shore Capital analyst Greg Johnson increased his 2025 pre-tax profit estimate by £3 million to £47 million, which includes a circa £8 million impact from the statutory levy and staking limits.

Johnson nudged up his 2026 pre-tax profit estimate by £1 million to £51 million, noting there is still upside to come from the land-based reforms.

‘Here, the mood music is very encouraging,’ added Johnson.

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Issue Date: 30 Jan 2025