Rank Group net profit drops despite rise in gaming revenue
The Grosvenor Casino and Mecca operator saw a rise in costs while revenue climbed in all segments.
UK.- Rank Group has reported a decline in net profit for the first half of its financial year despite net gaming revenue climbing 5 per cent year-on-year. Revenue for the six months ending December 31 hit £420m with growth across all divisions but higher expenses sent net profit down 26 per cent to £18.5m.
Outgoing CEO John O’Reilly cautioned that the company will face mounting cost pressures in 2026 and beyond as the UK government raises gambling taxes.
Grosvenor Casino venues saw revenue rise 6 per cent to £204m, supported by the installation of 850 new gaming machines following changes to machine allocation rules introduced in July. Revenue from Mecca bingo halls increased by 4 per cent to £67m despite a 1 per cent dip in customer visits and the closure of the Scarborough venue.
Enracha in Spain generated £21m, up 6 per cent with flat visitation but higher spend per customer.
As for Rank’s digital operations, revenue rose 8 per cent to £114.8m, and average revenue per customer was up by 18 per cent year-on-year. UK digital revenue advanced 9 per cent, including a 17 per cent boost from Grosvenor’s online offering and a 5 per cent rise from Mecca Digital. Spanish brands YoBingo, YoCasino and YoSports saw a more modest 1 per cent increase in revenue.
However, the cost of sales rose by 3.5 per cent to £236.7m and other operating expenses by 4.1 per cent to £153.3m. Operating profit fell 11.1 per cent to £31.3m.
In November, the UK government confirmed that remote gaming duty will rise from 21 to 40 per cent in April 2026. General betting duty will rise from 15 to 25 per cent from April 2027.
O’Reilly described the move as a “significant blow” to the UK market but said the removal of bingo duty should help protect jobs and investment in land-based venues.
“The second half of the year will bring further cost headwinds, principally in our UK digital business, which will be impacted by the UK government’s huge increase in tax rates,” O’Reilly said. “We have already executed measures to mitigate some of this impact, while continuing to prioritise customer experience, and the group will respond with agility as a heavily disrupted landscape takes shape in the UK.”
He added: “We continue to deliver improving results which demonstrate the resilience of the group and our ability to take advantage of the opportunities available to us, both online and in our venues.” He added that customer response to investments and improvements has been “enthusiastic,” and the medium-term outlook remains positive.
Rank Group leadership Changes
Today is O’Reilly’s final day as Rank’s CEO. He took up the role in May 2018 after serving as a non-executive director at William Hill and previously as managing director Coral Interactive for GVC (now Entain). Chief financial officer Richard Harris has stepped in as interim CEO. Meanwhile, John Ott has been appointed chairman.
“As I retire as CEO, I would like to pay tribute to my highly talented colleagues across the group for their enduring commitment to our customers which has again delivered another strong set of results,” O’Reilly said. “I am delighted that, as interim CEO, Richard Harris will now take Rank to the next stage of what I am sure is a very bright future.”
