The Rank Group H2 2026 Earnings Report

The Rank Group EPS Results

• Actual EPS: GBX 10.50
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

The Rank Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

The Rank Group Announcement Details

• Quarter: H2 2026
• Date: 8/13/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 4:00AM ET

The Rank Group (LON:RNK) has been entertaining Britain since 1937, from its origins in motion pictures to today's gaming based entertainment brands. Over the course of more than three-quarters of a century, the Group has entertained many millions of customers in Britain and around the world. The Group's story is one of iconic brands and talented people with a mission to entertain.

The Rank Group H2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong FY2026 performance: Like-for-like net gaming revenue increased 6% to £834 million, while operating profit rose 21% to £78.6 million; the proposed full-year dividend increased 35% to 3.5p per share.
• Positive Sentiment: Current trading has remained robust, with revenue up 8% in the first six weeks of FY2027, including 15% growth in Grosvenor gaming machines and 10% growth in digital revenue.
• Negative Sentiment: The 40% Remote Gaming Duty is expected to reduce FY2027 digital profitability by about £15 million despite mitigation, while management warned that profitability will “reset” in the year ahead.
• Positive Sentiment: Grosvenor’s expanded gaming-machine estate is showing improving momentum, and management believes additional machines, smaller electronic-led casinos and stronger machine productivity can support the path toward at least £100 million of medium-term operating profit.
• Neutral Sentiment: Rank closed nine Mecca venues after an estate review, leaving roughly 40 venues viewed as appropriate under the current tax regime; FY2027 capital expenditure is expected to fall to around £40 million, improving underlying cash generation but limiting near-term investment.

Presentation

[Richard Harris, CEO at Rank Group]

Thank you to everybody joining online, and a warm welcome to everyone that is here with us today. It is, of course, my first set of results as Chief Executive, and I am grateful to our Board, our major shareholder, for their support and for this opportunity. Rank is a great business, and I am delighted to share with you the story of another year of strong performance, to set out in a bit more detail how I see the opportunities for the Group, and why I think we are really well-positioned for future success. I am also delighted to be joined for the first time by Cliff Baty, our Interim CFO. I am going to start with the key highlights for the year before handing over to Cliff for the financial review. So once again, there was strong revenue and underlying profit growth in the year.

[Richard Harris, CEO at Rank Group]

It was great to see all businesses contributing to the improvement, and that is despite some headwinds. During the year, we took decisive action to mitigate the impact of higher RGD on our U.K. digital-facing business. The performance in digital was therefore encouraging, at +12% in Q4, particularly given the material reductions in above-the-line marketing. We started the new financial year in a similar fashion, so that is pleasing, too. From August of 2025, we started to increase the number of gaming machines in Grosvenor. As planned, we increased machine numbers by 65% before Christmas, with only modest in-year capital expenditure. The momentum is building with the initial step-up in performance continuing to improve through the year and strengthening further in the early weeks of the new financial year.

[Richard Harris, CEO at Rank Group]

The trajectory is positive and provides a strong platform on which to build, but requires further optimization before we need to make any further capital investment. So the focus is on maximizing the productivity of our machines, and there are lots of actions underway in that regard that I will come onto later. Over the last six months, we have been through an estate segmentation exercise in each of our venues businesses. Off the back of that, we have taken some necessary but difficult decisions, and that included the closure of nine Mecca sites in the year. On the other hand, in Grosvenor, we are trialing a smaller format casino proposition that could provide an attractive investment opportunity. It is about ensuring we have high-quality, high-returns venues estates for the future.

[Richard Harris, CEO at Rank Group]

We have also continued to evolve the strategy over the last few months, and as a result, we are clear about how we create value. We are also clear on where we can win: in casino-led and bingo-led gaming, and importantly, about why we can win. More from me on that later. For now, let me pass over to Cliff, who will take you through the financial performance. Cliff?

[Cliff Baty, Interim CFO at Rank Group]

Thanks, Richard, and good morning, everyone. It is a pleasure to be here presenting the full-year results. I am going to talk briefly through the financial highlights, operating profit growth, and then cash flow, CapEx, and capital allocation. This slide illustrates some of the financial highlights from a strong year for the business. Like-for-like net gaming revenue was up 6% at GBP 834 million, with growth across all our businesses. Good cost control meant that resulted in an operating profit of GBP 78.6 million, up 21%, and that includes one quarter's impact of Remote Gaming Duty in our U.K.-facing digital business. That strong result flows through to the improvements in underlying EPS and return on capital employed. Given this performance, the group has proposed a final-year dividend of GBP 0.025 per share, giving a total full-year dividend of 3.5p per share, a 35% increase over prior year.

[Cliff Baty, Interim CFO at Rank Group]

Just walking through the key items in the profit bridge, starting from last year's GBP 64.8 million, revenue growth, which is revenue less direct costs, was GBP 24.5 million. As mentioned, we started paying 40% RGD from the 1st of April, which was a GBP 10.1 million impact. However, the U.K. digital business took mitigating actions, which resulted in GBP 8.1 million of savings from reduced above-the-line marketing, staff, and supplier costs. Depreciation increased GBP 4.6 million as a result of prior year's CapEx investment. Minimum wage rises and the knock-on impact across our U.K. estate meant underlying salary and wage cost increased. However, we were able to mitigate this through staff cost and other savings, giving an overall cost increase of GBP 2.8 million. Finally, we launched online bingo in Portugal in March, which led to a net P&L cost of GBP 1.3 million due to the initial startup costs and the marketing investment.

[Cliff Baty, Interim CFO at Rank Group]

Overall, this gives an operating profit of GBP 78.6 million, with an increase in operating margin from 8.1%-9.4%. We did incur some exceptional costs during the year, and we have previously separately disclosed the Spanish fraud and the regulatory settlement items. Other significant costs represent the management actions we have taken to strengthen the business. As Richard mentioned, this includes the closure of eight Mecca clubs in early June and one in the first half of the year. These clubs were either loss-making or not commercially viable, so we took the difficult decision to close. I am pleased we have seen a positive transfer from customers from some of these clubs to other Mecca venues nearby where that has been geographically possible. These closures are part of the venue segmentation work we performed, as Richard again referenced, which will help drive future investment decisions across the estate.

[Cliff Baty, Interim CFO at Rank Group]

The restructuring costs relate to the staff reduction actions taken in response to the start of our RGD. Whilst these decisions are always difficult, we will continue to look for efficiencies across the business so we can tightly manage the underlying cost base. Turning to cash flow. Net free cash flow was GBP 25.5 million, and this reflects CapEx of GBP 50.2 million, which was at the lower end of our FY 2026 estimates, together with lease payments of GBP 48.3 million. Those lease payments have increased over prior year, due mainly to the increased machine estate rollout. Interest and tax costs were GBP 8.6 million, offset by a working capital inflow of GBP 4.6 million.

[Cliff Baty, Interim CFO at Rank Group]

The table in the top right shows the year-end cash position with the cash inflows of GBP 25.5 million, together with dividend payments of GBP 13.8 million, which left the group with a net cash balance of GBP 56.8 million at the year-end. Adjusting for the IFRS 16 leases of GBP 204 million, this gives an accounting net debt figure of GBP 147.2 million. It is worth noting we also refinanced our debt facilities in June with a new four-year GBP 120 million RCF facility on improved commercial terms. This puts our balance sheet in a healthy position going forward. As previously mentioned, FY 2026 CapEx was GBP 50.2 million, down from GBP 58.5 million in FY 2025. Looking at the split across the businesses, Grosvenor included general maintenance and upkeep spend, as well as refurbishments at Brighton and Bolton, introduction of sports betting areas at Reading and Leicester, together with the works required for the additional machine rollout across the estate.

[Cliff Baty, Interim CFO at Rank Group]

In Mecca, spend included our new 1825 Lounge at Stockton, a significant investment in the modernization of bingo, which is opening very shortly and was actually highlighted in the opening video. Other spend includes upgrades to our gaming machine areas in Thanet, Romford, Acocks Green, Gateshead and Swansea, as well as external signage at 11 venues. Digital CapEx was GBP 10.8 million and comprises mostly the capitalized internal headcount of our IT development teams. The reduction in spend from FY 2025 reflects a lowering from the more elevated CapEx levels of recent years when we were addressing significant maintenance backlog as well as investing in the venues estate, especially The Victoria renovation. Going forward, we will take a disciplined approach to CapEx, spending what was acquired to maintain a high-quality estate and only investing in high-returning development projects.

[Cliff Baty, Interim CFO at Rank Group]

This approach also feels prudent given the recent change to RGD and the current discussions around the industry. We would estimate FY 2027 CapEx will be around GBP 40 million, with the bulk of the reduction being in the Grosvenor business. These reduced spend levels will significantly improve the group's underlying cash generation. While mentioning FY 2027, I will just point out that in the appendix we do have slides which give forecasts for our interest and taxation forecasts for next year. The bottom of this slide illustrates the strong growth we have seen in return on capital employed over recent years, from 4% three years ago to over 18% now. Whilst the full year of RGD will have an impact in FY 2027, we would expect to continue to see strong returns in the future.

[Cliff Baty, Interim CFO at Rank Group]

Given the improvements in underlying cash flow as mentioned, I thought it would be worth quickly reiterating the group's capital allocation policy. Maintain balance sheet strength, disciplined capital investment, pay a progressive dividend that grows to over 35% payout ratio. Worth noting, our FY 2026 dividend of 3.5p per share represents a 33% ratio. We will consider inorganic growth opportunities, but only where they help us achieve our strategic aims and meet strict financial criteria. Otherwise, we will return surplus cash to shareholders. Thank you very much. I will hand back to Richard.

[Richard Harris, CEO at Rank Group]

Thank you, Cliff. You did a much better job of that than your predecessor used to. In all seriousness, moving across to my new role as Group CEO has been an appropriate time to review the lessons learned over the last few years, including what has worked well and what needs to improve. The great thing from my perspective is we believe there are lots of things that we are doing right, and that is coming through in customer response, the colleague engagement scores, and of course, in the financial performance. It is therefore about fine-tuning how we execute our growth plan from a position of strength. I describe it as a positive evolution of strategy in how we create value. The group's purpose to excite and to entertain our customers remains unchanged, and I will talk in a moment about how that purpose is implemented across all of our businesses.

[Richard Harris, CEO at Rank Group]

We believe we have a clear right to win in casino-led and bingo-led gaming. We have got deep expertise in our casino and bingo businesses. We do it better than the competition. There are areas of core competence, and we will create strategic value by doubling down in those areas. There are clear growth drivers in casino venues, in digital, and in our Bingo venues, and we are well-placed to capitalize on the existing and growing customer preference for gaming machines and, in a broader sense, electronic play. Finally, the group adds value in a number of ways: through the development of talent and strategic capabilities, in data and analytics, supporting the plans to provide more personalized experiences where the potential is vast, and increasingly in the application of technology to help serve customer needs. I will talk you through some of the key parts of that plan today.

[Richard Harris, CEO at Rank Group]

Starting with purpose, we apply the group's purpose to excite and to entertain through a common customer experience vision for all of our businesses. Importantly, the aim is to offer more localized, more segmented, and more personalized experiences. But in order to do that, we need every customer to be known, valued, safe, and most importantly, entertained. That is regardless of whether the customer plays in venue or online, in casino or bingo, in the U.K., Spain, or Portugal. The vision for the customer experience is consistent, and we implement that well in some places today, but we have got a great opportunity to do it much better across the group in future. Moving into casino and bingo-led gaming. To reiterate, we believe we have a genuine competitive strength, expertise, and significant further potential in these areas.

[Richard Harris, CEO at Rank Group]

In Grosvenor Casinos, we are the market leader in land-based, with around 40% market share, a position that has grown in recent times. The venue segmentation work gives us a clear framework for a commercial strategy and for investment across the estate, including the trial of a new small format, high productivity electronic-led casino. Revenues in Grosvenor are resilient, improving, and there are clear growth drivers. There are high barriers to entry through the licensing model, and our casino heritage, that genuine casino authenticity, is a key point of differentiation online. People come to us for the live casino offering, which is particularly important with RGD at that higher rate. Moving to bingo. Put simply, bingo is in the DNA of the Rank Group. We love bingo. I love bingo. We are proud of it, and we are passionate about it. It is great value, community-based entertainment.

[Richard Harris, CEO at Rank Group]

We've got a strong Enracha estate of nine well-located venues in Spain and have remodeled the shape of the Mecca estate to focus on the higher quality, higher return venues that generate strong liquidity, which is critical to the bingo game. Liquidity is genuinely king. It drives the prize boards that customers play for and the price they pay. The same applies online. It's exceptionally hard to replicate the liquidity game in the unlicensed market, and we're well-positioned online, particularly given the change in nature of the industry with a highly loyal customer base. We're clear where we can win, but also why we can win, which is on the bottom half of the slide. We've got well-loved brands in attractive markets, a compelling customer proposition that is delivered by highly skilled and highly engaged colleagues.

[Richard Harris, CEO at Rank Group]

We've got clear growth drivers, well understood by everyone across the group, and a significant opportunity to grow through investment in the cross-channel proposition. We're reviewing the implementation of that strategy through two parallel components. On the one hand, we're focused on delivering the GBP 100+ million operating profit ambition that you're all familiar with, and that's the deliver part of the chart. We're also thinking about how we build a business for longer-term value creation, and that's the deploy part of the strategy. One doesn't lead to another. They run in parallel, and we need them both to fully realize our ambitions. In deliver, it's about maximizing the value of existing assets. We've got a laser focus on performance, using data and insights to drive growth, and utilizing technology to improve customer propositions. That will result in revenue growth, but also higher margins, higher returns, and improved cash generation.

[Richard Harris, CEO at Rank Group]

In deploy, it's about selectively deploying capital to build scale in the areas we know we can win and where we're confident of securing strong returns. I've already said that that's casino-led and bingo-led gaming. The smaller format electronic-led casinos are a good example of where we'll invest, as are investments in social gaming lounges in both Mecca and Enracha. We'll also look to grow our international revenue streams to provide greater diversification. Both Enracha and Yo, two bingo-led businesses in Spain, have operating margins above 25%. Two really productive businesses, but they account for less than 10% of group revenues. We want international to be a bigger proportion of the group in future, and Portugal is where we're focusing our attention to start with. It was great to launch our bingo product there towards the end of the year.

[Richard Harris, CEO at Rank Group]

Just to reiterate, deliver and deploy are in parallel rather than sequential, and we need both to fully realize our ambitions. Getting into the drivers of growth in each of the businesses. We talked about the playbook for success in Grosvenor in the Capital Markets Day in October 2025. The key components of that are shown here. We've got a high-quality segmented estate, and in each of those segments, we have a clear commercial plan, a clear investment plan, and a model of the returns that we expect. We've improved the quality of our club environment significantly over the last few years. There's still some work to do, but the estate is in increasingly better shape, and we'll continue to invest in that estate going forward. A targeted approach that utilizes that venue segmentation.

[Richard Harris, CEO at Rank Group]

It also recognizes we have delivered higher returns where we have focused on more targeted schemes that have the most direct impact on the customer. In hospitality businesses, people are key, and in Grosvenor, we have over 4,000 highly skilled colleagues. The From Like to Love cultural change program that we introduced a few years ago has had a material impact. We have some of the best engagement scores in the hospitality sector, which given the 24/7 nature of our operation, is a fantastic result. We offer unrivaled products and service, first-class table gaming, the best and most innovative electronic gaming in the U.K., a much-improved slots proposition with breadth of choice for the customer. We can now offer sports betting and already have sports betting terminals in 24 casinos. We are learning plenty there as sports broadens the proposition of our venues.

[Richard Harris, CEO at Rank Group]

We have a tailored F&B offer, and we are the market leader in poker in the U.K. On which note, we held our annual Goliath Poker event in Coventry Casino a couple of weeks ago. Cliff and I both went along for some of it. That was to watch rather than play, unfortunately. It was a fantastic success, with 15,000 customers competing for a prize pool of GBP 2.2 million. It is the biggest poker event of its kind outside of Vegas, and we are very proud of it. Most importantly, customers love it too. Finally, we continue to make progress with the cross-channel proposition, which is a point of difference in the market and can be a catalyst for further growth through retention and deeper customer relationships. There is a big opportunity in that regard. Moving into Grosvenor performance for the year, where we made continued progress again.

[Richard Harris, CEO at Rank Group]

Revenues are up 5%, with gaming machines the fastest-growing product vertical. Table gaming performance was flat, a tale of two halves. Revenue was up 2% in the first half, but down in H2 due to the Middle East conflict and the consequential reduced travel from that region. As I mentioned earlier, we plan to trial a smaller format casino this year using some of our dormant licenses. Gaming machines were an important driver of growth in FY 2026, and as you can see from the chart, slots performance improved as the year progressed. That improvement has continued into the new financial year. We have grown machine numbers by 850, or around 65%, and after the initial step-up in revenues, we are very focused on optimizing the performance of the machine estate before making further capital investments.

[Richard Harris, CEO at Rank Group]

Our experience from adding machines into venues in the past tells us it takes around two to three years to get to maturity. We have learned that customers like the increased breadth of choice in the machine estate, but there are probably four or five machine suppliers that we will work most closely with in the next few years in order to maximize performance. Service definitely matters for our slots customers. Knowing their drink of choice, their favorite game, and helping them with offers and so on are an important part of the slots experience. We are investing in training a mystery customer program with a specific focus on slots areas. We are also investing in a new loyalty and rewards program direct to the machines in the first half of the new year. It is clear that data and insights has to drive decision-making and performance improvement.

[Richard Harris, CEO at Rank Group]

We're going to increase machine allocations to venues when the utilization rates demand it and where the capital returns are strong. Growth will come from a combination of increase in the customer base and increase in share of wallet from existing customers that may also play elsewhere. We offer a really attractive slots proposition in our venues now, and we expect to move from 2 million slots revenue per week from prior to the land-based reforms to over 3 million per week in the next two to three years. On to building scale and digital. I think it's fair to say the U.K. digital landscape is experiencing a seismic shift with the increase in RGD to 40%. With that in mind, ensuring you have a clear framework for acquiring, entertaining, and retaining customers is key. For us, that's Join, Play, Stay.

[Richard Harris, CEO at Rank Group]

Join is about acquiring customers as efficiently as possible. If we do that well, marketing expenses as a percentage of revenue will decline as our acquisition programs become more effective. Play is about giving customers the best possible proposition, the most fun in order to deepen engagement. To that end, we've protected free bets, incentives, and continue to focus on improving customer journeys, improving the customer proposition in all of our digital channels. If we do this well, customer player days should materially increase. Stay is obviously about retention, building loyalty, and improving customer lifetime value. That's the commercial model that we've implemented that gives us the best possible chance of success in a higher tax world. In that context, digital performance is pleasing. Revenues grew by 12% in the final quarter, the first quarter with higher RGD, and by 8% for the full year.

[Richard Harris, CEO at Rank Group]

We took decisive action to mitigate the impact of higher taxes, reducing above-the-line marketing significantly, more than most operators, because we have the advantage of well-known brands. We did dial up performance marketing modestly, and that supported performance and is delivering strong returns. We renegotiated supplier contracts and also reduced headcount in the U.K. digital business. They were the necessary actions to ensure we had a viable business going forward. As I mentioned, we have continued to invest in the customer proposition, and that's also key to having a vibrant digital business in the U.K. going forward. Moving to performance in Spain, where we grew by 7% in the year, much improved where we finished the previous financial year and the start of FY 2026, when the business was in slight decline. YoBingo performance was pleasing, and YoSports growth was particularly strong.

[Richard Harris, CEO at Rank Group]

We've taken some of the community aspects we have in Bingo and are applying them to the sports site, which gives us a point of differentiation against the much bigger operators. Broadly maintaining margins in digital given the tax impact in Q4 was pleasing. Digital profitability will inevitably reset in the year ahead. Moving to Bingo. The plan remains to maximize medium-term cash generation in our Bingo venues, and this slide illustrates the model. We've got strong brands in both Mecca and Enracha. A vibrant Bingo game is key. That's how you attract customers. It's their primary reason for visiting. Those customers, generally speaking, are very loyal. The community aspect is also important. There's a deep loyalty to our brands and a strong association to colleagues and to other customers.

[Richard Harris, CEO at Rank Group]

From a financial perspective, gaming machines and electronic tablets are the productive assets that help drive overall profitability. Good quality data, which continues to improve through the loyalty card in Enracha and through the Mecca app, is important to driving growth. In the year, both Mecca and Enracha delivered solid performance. NGR growth in both was driven by a combination of strong Bingo proposition. Remember, that's the primary reason for visit. That's why people come, plus strong gaming machine growth on top. We've made targeted investments in each business, particularly in the gaming machine areas, but also in social Bingo lounges. The first of those, Bingo Boom, opened in Seville in April, and the investment in the 1825 Lounge in Mecca, Stockton that you saw in the video completed only last week.

[Richard Harris, CEO at Rank Group]

Off the back of the venue segmentation work, we did close nine Mecca venues, and that leaves us with a higher quality Mecca estate that we're happy to invest in. The Enracha estate remains well invested and in very strong shape. Colleague engagement and customer NPS is also strong across both businesses. I've mentioned already that slots and electronic gaming are the economic growth engine for all of our venues businesses. Slots accounts for around 44% of group revenues. Electronic terminals account for around 16% of Grosvenor revenues. Tablet-based play in Mecca now accounts for around 80% of bingo revenues. The important point is that customers like playing electronically, even if they're in physical venues. It's part of the broader trend that you see across hospitality businesses, with customers increasingly interacting with physical locations through digital devices. It's convenient, it's interactive, and it's what customers demand.

[Richard Harris, CEO at Rank Group]

We continue to improve the proposition in these areas in order to capitalize on the growth opportunity and the shift in how customers are behaving in hospitality venues like ours. Slots and electronic gaming are also our most productive assets. They utilize space efficiently and generate strong returns. As part of our increased focus, we're deepening relationships with suppliers to ensure we continue to develop the proposition and lead the way on innovation in our sectors. In that context, it'd be remiss of me not to mention Machine Gaming Duty. It's currently charged at 20% of revenue generated on gaming machines in both casinos and Bingo halls. As you've heard, gaming machines are an important component of our venue profitability. Any increase in MGD puts pressure on the viability of venues.

[Richard Harris, CEO at Rank Group]

You can see on the slide the impact of wage inflation and higher taxation on the number of Mecca venues and Mecca colleagues over time. Unfortunately, any increase in MGD leads to fewer venues, lower employment, and reduced tax receipts within 12 months. We've started to make these arguments publicly, and we made them last year as well. We'll continue to showcase our clubs that support jobs, provide customers with enjoyable experiences that means they come back week in, week out, and generate significant tax and duty receipts. We're very proud of what we offer in towns and cities across the country. These are genuine community assets. Moving now to current trading. I'm pleased to say that the strong momentum has continued into the first six weeks of the new financial year.

[Richard Harris, CEO at Rank Group]

Revenues are up 8%, with gaming machines in Grosvenor having grown 15%, and digital revenues have grown by 10%. But as you have heard, digital profitability will inevitably reset in 2026, 2027. That is despite the mitigating actions we have already taken. But we are well-placed to deliver market expectations for the new financial year. Finally, I also expect that momentum to translate into further strategic progress. The strategy is focused on those areas where we can win, casino-led and bingo-led gaming. Underlying performance momentum is good across the group. There are clear growth drivers in each of our businesses and plenty of runway ahead of us. We have got a strong balance sheet, as Cliff mentioned, and that allows us to continue to invest in order to capitalize on these growth opportunities. We are on track to deliver at least GBP 100 million of operating profit in the medium term.

[Richard Harris, CEO at Rank Group]

Across the group, there is a clear focus on creating long-term, sustainable shareholder value. Right. Thank you for listening. There is now an opportunity for questions. We will start with questions from the room before moving online. Got a keen audience member here. Before you ask your question, please state your name and where you work.

[Ivor Jones, Analyst at Peel Hunt]

Thank you. Good morning. Ivor Jones from Peel Hunt. Richard, can you talk about how the route to GBP 100 million might have changed over the course of the last year, if it has changed? Obviously, you have talked about a reduction in CapEx relative to what we might have been expecting.

[Richard Harris, CEO at Rank Group]

Yeah. So I think in the last 12 months, it is probably changed in two ways. The first was, obviously, when you have got a resetting of digital profitability off the back of higher RGD, that inevitably means that the digital component of our GBP 100 million is lower. But I think it is fair to say that there was probably an expectation we would be able to go well beyond that GBP 100 million, so still feel confident we can get there. I think from a Grosvenor perspective, we have got capacity for another 650 machines. We have put 850 in already, another 650 to go. I would think of that as the kind of full capacity for the business. So the extra 650 machines requires about GBP 25 million-GBP 27 million worth of CapEx.

[Richard Harris, CEO at Rank Group]

We only want to push the button on that additional CapEx when we are confident we have got the best returns that we possibly can out of the existing machine estate. Then when we are going to add them in to the estate, we are going to get the returns on that investment. Will we add more machines in the year ahead? Absolutely. Do I think it is about maximizing the performance from the existing machine estate at first? Yes. The final bit, Mecca is probably going to be off the back of the abolition of Bingo Duty. Mecca plays a slightly larger part in that GBP 100 million as well.

[Ivor Jones, Analyst at Peel Hunt]

Just to be clear, are you saying that the GBP 100 million requires the full next cohort of machines?

[Richard Harris, CEO at Rank Group]

I do not think a material number of additional machines is required for us to hit GBP 100 million operating profit, no.

[Ivor Jones, Analyst at Peel Hunt]

Beyond the ones you have already installed?

[Richard Harris, CEO at Rank Group]

Not materially.

[Ivor Jones, Analyst at Peel Hunt]

No. Okay. Thank you. You talked about the small casino format. What is it? What does it cost?

[Richard Harris, CEO at Rank Group]

A small format casino is a result of the venue segmentation work that we have done over the course of the last six months or so. We have done that in each of our businesses. In Grosvenor, I think it is kind of clear when you segment the venues. We have got some very strong flagship venues where we are going to have 80 gaming machines, a full proposition across table gaming, electronic roulette, slot machines, poker, great F&B, all of that. But there is a component of our existing estate which just lends itself to a smaller footprint, higher productivity offer. Less prominent table gaming, prominent slots, prominent electronic roulette, and then a complementary F&B offer, potentially with some sports terminals as well.

[Richard Harris, CEO at Rank Group]

We are trialing that in one of our existing venues at the moment, and we think we can take that model and apply that to potentially use some of our additional dormant licenses in new locations around the country. We are going to learn the lessons from the venue that we have got in place already, and then we will look to trial in a few more locations over the course of the next year or so. Cost-wise, I estimate it around GBP 1 million per site. It is a relatively modest investment, smaller footprint than what you might be used to in terms of some of our larger casinos. Utilizes electronic gaming predominantly, lower staff intensities, operating margins. I would hope we could get them up to around 20%.

[Ivor Jones, Analyst at Peel Hunt]

A GBP 1 million sounds more like a pub than a casino. Is that because you think about landlord contribution or a lot of the physical assets will be leased when you are talking about the million?

[Richard Harris, CEO at Rank Group]

Yeah. So, definitely a smaller format. So we are not talking about anything that is more than perhaps 6,000 sq ft or 8,000 sq ft. Again, the machine proposition, typically, we have those on either leases or revenue share. This is not gold-plated stuff. I think GBP 1 million is reasonable. It might be a bit higher, it might be a bit lower, but on average, it feels reasonable.

[Ivor Jones, Analyst at Peel Hunt]

Last one for the moment. We talked about the impact of increased RGD of GBP 46 million, but the impact in the first quarter was GBP 10 million. Why was that? Is that something to do with seasonality I have not thought about?

[Richard Harris, CEO at Rank Group]

Cliff, do you want to take that?

[Cliff Baty, Interim CFO at Rank Group]

Yeah, I can take that. Well, we only pay RGD actually on the gaming side, and you fortunately pay it on GGR, so we are sort of working NGR items. So if you do the maths based on where we are going to be, you have to take out the sportsbook gross up at the level of free bets. As Richard mentioned, we have not really cut down on the free bets because we have gone down slightly, but we are still obviously engaging with customers. So you get to GBP 46 million on that basis.

[Ivor Jones, Analyst at Peel Hunt]

But then why GBP 10 million in a quarter?

[Cliff Baty, Interim CFO at Rank Group]

That same basis, basically, because you have taken it based on GGR, the effect this year.

[Ivor Jones, Analyst at Peel Hunt]

Okay, great.

[Cliff Baty, Interim CFO at Rank Group]

Well, sorry, the reason [10.25%-35%] Is because we've actually got some revenue growth planned into that number.

[Ivor Jones, Analyst at Peel Hunt]

Right. Great. Thank you.

[Roberta Ciaccia, Analyst at Investec]

Hi, good morning. It's Roberta Ciaccia from Investec. First question from me, we're now four and a half months into the RGD increase, doubling basically. Did you see already any changes in the competitive environment? Anybody getting out of the market? Something that could give us hope that for the more established operators, the impact is going to be somehow mitigated in terms of revenue in the future? That would be my first question, if I can then add.

[Richard Harris, CEO at Rank Group]

Yeah. So, I think where taxes go up around the world, it's kind of relatively consistent what the kind of consequences are in different markets. Taxes go up, there tends to be quite significant reductions in above-the-line marketing. As I mentioned earlier, we've reduced our marketing above the line very significantly, but we've probably done it less than other operators. Some of the sportsbook operators, partly because Sports Betting Duty doesn't go up until next year, partly because of the World Cup, maintained levels of investment, I would say. Also, there are some mid-tier operators out there that have remained particularly strong in terms of their levels of investment. I think over time, that's likely to still decline, but so far, we haven't really seen that on a material basis.

[Richard Harris, CEO at Rank Group]

We've seen some smaller operators leave the market, but I think we knew about them before the end of March, really. I wouldn't say we've seen any further operators exit the market, nor would I expect to really over the course of the first three or four months. But inevitably, over time, I think there is going to be consolidation in that market. Do I think we've benefited from players leaving the market so far in our 12%? Not really.

[Roberta Ciaccia, Analyst at Investec]

Okay. Second question. You've talked about, Cliff, potential inorganic investment opportunities, of course, subject to the capital allocation in general. You also mentioned you expect over time to have more contribution from outside of the U.K. Can you give us any idea of what you're looking for and what kind of hurdle rates and what geographies in case, or is it too early?

[Cliff Baty, Interim CFO at Rank Group]

It's too early. I think with the health of the balance sheet that we have, what's happened with RGD and the positioning of the business, I think the logic of increased diversification outside the U.K. has obviously merit. So we are keeping our eyes open. We are based in Spain. We have a very successful, profitable business in Spain, launching in Portugal, so we're looking obviously to develop in those areas. But we wouldn't want to be specific or even constrain us necessarily in there. But just to reiterate that if we do anything, it will have to hit some quite high financial hurdles, and it will have to be part of our strategic basis and plan as we've discussed.

[Richard Harris, CEO at Rank Group]

I'd just add to that, I think preference for organic because there's obviously more execution risk with inorganic. I think any good businesses keeps its eye on opportunities that are in the market. We're a market leader in casino in the U.K. We've got strong positions in bingo. It's logical that as part of the strategy, we just kind of keep your eye on what's going on in the market and see if there are any opportunities that fit that strategic agenda.

[Greg Johnson, Analyst at Shore Capital]

Morning. Greg Johnson, Shore Capital. Just a couple of questions I was following on. In terms of digital, the double-digit growth you are achieving, revenue growth in the U.K. post the RGD increase has probably surprised many with the strength there. Is anything we should be thinking about in terms of that slowing down, in terms of, I suppose, offshore operators taking share, because it just feels a particularly strong performance. With that in mind, obviously it was a strong profit performance in digital in the year. What was Q4 like year-on-year? Just thinking about the first point of a post RGD increase. Secondly, on CapEx, do you think the GBP 40 million is now the run rate for the business pre any further deployment that you have talked about in terms of the deliver and deploy?

[Greg Johnson, Analyst at Shore Capital]

Finally, with the closures at Mecca, are we now there with 40 odd sites as the optimal level? Thank you.

[Richard Harris, CEO at Rank Group]

Yes. If I pass the CapEx question over to you, Cliff, and perhaps you want to talk about digital profitability in Q4, and I will start with some of the other bits. So Mecca, yeah, I think that at the current tax environment, around 40 venues is about right. I would be happy to invest in any of those 40 venues, which is where we wanted to get to. As Cliff mentioned, the venues we have closed, it is a difficult decision, right? Because you only get to close a venue once. So you have to be absolutely certain that you are doing the right thing. But in those cases, over the next five years, I did not see a path, or we did not see a path to positive cash generation over the course of that next five-year time period.

[Richard Harris, CEO at Rank Group]

In most cases, they had quite significant property liabilities or lease events or something that made it quite difficult to see cash generation being particularly strong in that five-year time period. So it is a tough decision to make. Do not take it lightly, but it was the right thing to do for Mecca. It is the right thing to do for the medium term. And yeah, around 40 on current tax regime is about right. On digital performance, I do not think we are the only one performing particularly well in our Q4. Some of our competitors have reported results recently in the U.K. gaming space. I think we are doing relatively well in that context, but we are not the only ones that are showing good levels of growth. What is it down to?

[Richard Harris, CEO at Rank Group]

I think it's hard to say that the above-the-line marketing spend has had a material. The reductions in above-the-line marketing spend will have had any material impact yet. I think that's likely to play out over longer periods of time. We are conscious of that. We're monitoring that. Got lots of customer research that we do to kind of make sure that we're not tying too many hands behind our back in that regard. I'm pleased with performance in Q4. Do I necessarily say that it's going to give me the huge confidence we can do double-digit growth for the next few years? Well, I'm confident internally, but we just have to kind of monitor how the market performance manifests itself. In terms of the black market piece, again, the data on it in a short period of time is relatively limited, so I can't say for definite.

[Richard Harris, CEO at Rank Group]

Intuitively, it feels like over time, the unlicensed market will inevitably increase because the customer proposition they can offer is just better. If you're not paying tax, you haven't got safer gambling schemes, you can offer a better proposition to the customer. Cliff?

[Cliff Baty, Interim CFO at Rank Group]

Yeah, just finishing up on digital. It was obviously, it's not great to have a GBP 10 million additional RGD cost coming through there. We had done the mitigations and I think importantly, as Richard has mentioned, we decided to sort of invest in marketing as well. We did well in the period. So actually, yeah, profitability was probably ahead of where we expected because of the stronger top line, but we took the opportunities to invest in performance marketing as we've continued sort of to do. I'm not going to give a figure. The main thing to think about really is for next year, mentioned GBP 35 million of additional RGD, and we think our mitigations together with roughly where we're planning on the marketing levels would lead to about a GBP 15 million decrease in profitability.

[Cliff Baty, Interim CFO at Rank Group]

We can mitigate about GBP 20 million of that GBP 35 million for next year. Coming back to CapEx. Yeah, it's not a sort of one-off lens in terms of the review of CapEx and what we want to spend. We have a strong balance sheet, so if opportunities come up, organic opportunities, et cetera, we're going to assess them on their own merits. But yes, we would look to keep this view and lens on the business. So GBP 40 million is not an unreasonable. GBP 40 million or thereabouts is not an unreasonable sort of going forwards, obviously, and give you more precise guidance as we move through. But that would be correct.

[Greg Johnson, Analyst at Shore Capital]

Just wrapping up on that. We should think of the GBP 40 million CapEx within the context of the GBP 100 million profit ambition.

[Richard Harris, CEO at Rank Group]

Correct.

[Cliff Baty, Interim CFO at Rank Group]

Correct. Yeah.

[Company Representative at Rank Group]

Brilliant. That brings us to questions online. We have four questions, three from Richard Stuber at Deutsche Bank, and two from David Brohan at Goodbody. The first three from Richard Stuber. The first one reads, have tourists from the Middle East and Far East returned to more normalized levels since the start of the war in Iran? If not, how much of this has been a drag on FY 2026 financials? The second question, digital continues to be very strong, up 10% in current trading. How much of the recent growth is from converting land-based customers and how much is from newly acquired customers? Can you split revenue by activities and ARPU? The third question, Portugal was GBP 1.3 million startup headwind. How long will it take you to break even? What are your medium-term profit expectations?

[Richard Harris, CEO at Rank Group]

Great. Middle East, definitely an impact on performance in the second half of the last financial year, FY 2026. As I mentioned in the presentation, table gaming was up 2% in the first half, and it was flat for the full year. You can probably work out the benefit from that, or the impact from that, I would say on a weekly basis in Q4 probably hampered us by around GBP 150,000-GBP 200,000 a week. The longer the conflict goes on, though, I think the more likely customers are to return to more typical plans. If we see at the start of that fourth quarter, there were flight paths that were closed for part of it, some flights were not running, et cetera. That has got a direct impact on how customers behave.

[Richard Harris, CEO at Rank Group]

As things kind of tend back to a bit more normality, I think customers just want to get back to their normal ways of operating. I am kind of optimistic with early signs of how the Middle East performance has been over the course of the summer trading period. I think you can see that in the Grosvenor numbers. You can see that in our +8% revenue growth for the six weeks. I think we probably benefit from some other parts of Europe being particularly hot. I think we all think London has been hot, but I think other parts of Europe have been particularly hot, and some of those Middle Eastern customers are coming to escape the heat when they come to Europe. I think the summer period, we can look forward with a relatively decent outlook.

[Richard Harris, CEO at Rank Group]

On Portugal, if I take Portugal, then I will come back to you on the ARPUs and digital, Cliff. Portugal, yeah, I think as Cliff mentioned, GBP 1.3 million loss in the last financial year. I would expect to be loss-making again in the year that we are in, with a view to then being positive cash generation in FY 2028. Key thing is that we are building liquidity. We are the only online bingo operator. Bingo is understood by Portuguese customers, but we are establishing liquidity from scratch. As I mentioned earlier, liquidity is king. You need to get to a level of liquidity that allows you to offer an attractive prize board at attractive prices. That is the critical bit. We are in the investment phase to try and get to that point.

[Cliff Baty, Interim CFO at Rank Group]

Yeah, I think the question on digital was a little bit on the 10% growth and where that is coming from. Is it from cross-sell from our land-based clubs, or is it obviously new customers? I think predominantly it is new customers. We have the advantage of our land-based clubs, which really helps the brand, especially with the decision to pare back on above the line. Having such established brands as Mecca and Grosvenor is a real plus for us to be able to do that. We need to work out exactly what we do in the future around above the line. We do get the benefit of that. Clearly we do get some customers coming in, and especially with some of the technology developments we are putting in to be able to communicate with customers digitally who are in venue.

[Cliff Baty, Interim CFO at Rank Group]

That gives us a real competitive advantage. No, most of this growth is from new customers coming through us, through the performance marketing investments that we have been talking about. But we do plan to aggressively, as I said, with the technology, make sure that we leverage our estate as best we can, especially with 40% RGD. It would be remiss of us not to do that. In terms of ARPUs, I will not give exact ARPUs. What I will say is the pleased with the size and scale of the player base. That has certainly been. You cannot get these growth in revenues without having a solid player base and a very good level of activity on the site. We are happy with that.

[Company Representative at Rank Group]

Thank you very much. The final online question comes from David Brohan. It reads, "What is your view on the decision this week to scrap the aim to permit policy? What are your initial perspectives on the new government's views on the gambling industry?

[Richard Harris, CEO at Rank Group]

[inaudible], where to start? Let us start with aim to permit. That is probably safer territory. Aim to permit did not impact our casinos and bingo halls. If we want to move a casino license, if we want to relocate a casino, if we want to utilize an existing casino license to open a new venue, we always have to go through a planning permission process. That does not change off the back of the proposals around aim to permit. We are not really in a position where we are looking to open new bingo halls. For existing licenses, existing venues, it does not have any impact. If we want to move a license in Grosvenor, then there are already well-established processes there. Not a material impact from our perspective. It predominantly impacts on AGCs and betting shops more than it would do for us. Broader sentiment around gambling.

[Richard Harris, CEO at Rank Group]

I think we are proud of what we do. We think our venues are at the heart of the towns and cities across the country in which we operate. We think they are community assets. They provide a high level of gambling supervision. We try and look after our customers really, really well. That is the game that we are in. We will continue to offer them the best entertainment, the best fun that we possibly can. There is not much I can do about the external factors. I think what you should understand from our perspective is that we are trying to provide the best proposition, the best enjoyment in the most safe environments, and we will continue to do that. It also goes without saying, I think that whatever the external factors, which we have got used to over the last few years, they come and hit businesses now.

[Richard Harris, CEO at Rank Group]

We have just got to get used to operating in that environment. You are not going to change that. From our perspective, we are very focused on managing through difficult external environments.

[Company Representative at Rank Group]

Ivor, just bear with us while the mic comes back.

[Ivor Jones, Analyst at Peel Hunt]

Thank you very much. Ivor Jones, Peel Hunt. Did you call them social gaming lounges in Mecca and Enracha, and what are they? I remember Rank used to talk about electronic gaming lounges.

[Richard Harris, CEO at Rank Group]

Social gaming lounges. The traditional main bingo hall, because you are playing bingo live and somebody is calling the number, everyone likes it to be relatively quiet so they can hear the number being called, make sure they are on track with their card. A social bingo lounge has got a much more energetic, upbeat environment, I suppose. It can be noisy. People are talking. There is typically Sky Sports on in the background. This is a place where you can carry on playing bingo, but in a much more social way, talk to your friends, talk to your family, all that kind of stuff. Whereas the main hall typically in most sessions tends to be eyes down, concentrate. They take it really seriously. We take it seriously too, but they take it super seriously. This is just, again, part of a broader hospitality trend, I would say.

[Richard Harris, CEO at Rank Group]

We want to offer customers different options within our venues.

[Ivor Jones, Analyst at Peel Hunt]

Would a site still have a quiet bit and a double-glazed bit for shouting?

[Richard Harris, CEO at Rank Group]

It would. Not for shouting, but having fun.

[Ivor Jones, Analyst at Peel Hunt]

Right. Sports betting, is that going to be important, or is that just interesting at the periphery of the casinos?

[Richard Harris, CEO at Rank Group]

I don't think it's going to be important any time soon in terms of the materiality to our business performance. But do I think it's an important part of broadening the appeal of the casinos to a broader audience? Yes. We've trialed a couple of venues where we've got dedicated sports lounges, over-the-counter betting, plus sports betting terminals, and it's an interesting proposition, particularly around big sporting events. It gets a different audience into our casino in a way that also protects the integrity of table gaming. Because if you're playing table gaming and you've got people shouting at the football at the same time, it doesn't necessarily lend itself to a great gaming experience. But if you've got a separate lounge, separate dedicated area, that can be complementary to what we offer from a table gaming and electronic gaming perspective.

[Ivor Jones, Analyst at Peel Hunt]

Any sign it drives footfall for other activities in the casinos?

[Richard Harris, CEO at Rank Group]

Generally good overlap with poker. Poker players tend to be sports bettors.

[Ivor Jones, Analyst at Peel Hunt]

Right.

[Richard Harris, CEO at Rank Group]

There is definitely a correlation there and an opportunity for some revenue uplift. But like I said, it is not going to be material.

[Ivor Jones, Analyst at Peel Hunt]

Okay. Last one. Could you just talk about why Rank runs with a net cash balance? Have I misremembered something about the amount of cash required for working capital? Why is not this a levered business?

[Company Representative at Rank Group]

[inaudible]

[Cliff Baty, Interim CFO at Rank Group]

I am going to take that. Well, it is a policy, but you are right, we do have a requirement for working capital. You will even see in our interest costs, it is not all IFRS non-cash interest. We have a facility, an RCF facility, and at certain times in the year, we will need to dip into that because of basically the volume of floats, et cetera, that is held across all our clubs. That is actually reducing as we are generating more cash. As I say, with the strong cash reduction from this year, we will be well above that excess in terms of cash.

[Ivor Jones, Analyst at Peel Hunt]

Should the group have net debt and a net debt ratio target?

[Cliff Baty, Interim CFO at Rank Group]

I think that is up for us in terms of our views on balance sheet and comes back to sort of the capital allocation view. But we will look at what we feel is most appropriate.

[Ivor Jones, Analyst at Peel Hunt]

Thank you.

[Richard Harris, CEO at Rank Group]

Conscious of time because there is lots going on this morning. Thank you, everybody. I think we are all done with questions online, so we will bring it to a close. Thank you for taking the time today. We will finish there and wish you well. Thanks very much.

Participants

Analysts

• Richard Harris, CEO at Rank Group
• Cliff Baty, Interim CFO at Rank Group
• Ivor Jones, Analyst at Peel Hunt
• Roberta Ciaccia, Analyst at Investec
• Greg Johnson, Analyst at Shore Capital
• Company Representative at Rank Group