- Strong momentum continued into Q3
- Full year guidance maintained
- Land-based reforms expected in the summer
Casino and bingo operator Rank Group (RNK) said strong momentum continued into the third quarter through March with like-for-like net gaming revenue up 10.9% to £195.6 million.
Chief executive John O’Reilly commented: ‘Since announcing our interim results in January, we have continued to deliver strong growth and expect to deliver group like-for-like operating profit for the full year in line with expectations.
‘This is notwithstanding the uncertain economic environment and the significant cost and regulatory headwinds that we face from the start of Q4 (1 April 2025).’
The positive update was well received with the shares trading up as much as 8% to 40.5p, taking the gain over the last 12-months to 19% compared with a flat performance for the FTSE All-Share index.
GROWTH ACROSS THE BOARD
Grosvenor venues, Rank’s largest division, delivered like-for-like NGR (net gaming revenue) growth of 13% to £90.4 million, driven by a strong performance in table gaming, up 14.5%, and 9.5% growth in electronic roulette.
Digital like-for-like NGR growth was strong, up 18.3% to £58.4 million, with the Grosvenor brand up 43.2%, the stand-out performer. In contrast Spanish net gaming revenue fell 2.9% year-on-year.
Mecca bingo venues grew like-for-like NGR by 1.9% to £36.6 million, driven by a 3.8% increase in spend per visit, more than offsetting a 1.8% drop in customer visits.
The Spanish Enracha venues continued to perform strongly, delivering 4.1% like-for-like growth in revenue to £10.2 million.
Looking ahead, the company said it expects the Government to publish the statutory instruments for land-based casino reforms in coming weeks, and Rank anticipates rolling out additional machines and sports betting during the summer.
ESTIMATES MAINTAINED
Shore Capital analyst Greg Johnson said the third quarter performance was consistent with his full year assumptions which call for revenue of £800 million and pre-tax profit of £48.2 million.
‘Delivery on its medium-term targets for Grosvenor Casinos (NGR of £8 million/week) and Digital (NGR CAGR of 8 to 12% and a 12.5% operating margin) would be expected to be materially earnings accretive,’ added Johnson.
