Rank Group H1 2025/26: profits up, dividend raised, but tax and wages bite
Rank Group’s half-year update shows a business growing across the board, but juggling a heavier tax burden, higher wage costs and a one-off fraud hit in Spain. On an underlying like-for-like basis, operating profit rose 15% to £40.6 million, backed by 6% LFL Net Gaming Revenue (NGR) growth to £419.8 million. The Board has upped the interim dividend 54% to 1.00p, signalling confidence even as statutory profit dipped due to separately disclosed items.
There’s also a leadership handover: long-serving CEO John O’Reilly is retiring, with CFO Richard Harris stepping in as interim CEO from 30 January 2026. Guidance remains intact and the medium-term aim of at least £100 million annual operating profit is reiterated.
Headline numbers that matter
| Metric (H1 2025/26) | Result | YoY change |
|---|---|---|
| LFL NGR | £419.8m | +6% |
| Underlying LFL operating profit | £40.6m | +15% |
| Statutory operating profit | £31.3m | -11% |
| Underlying EPS | 5.6p | +17% |
| Basic EPS | 4.0p | -25% |
| ROCE | 15.9% | +2.6 pts |
| Net free cash flow | £3.8m | -12% |
| Net cash (pre IFRS 16) | £39.4m | +63% |
| Net debt (post IFRS 16) | £165.1m | +33% |
| Dividend per share | 1.00p | +54% |
Note: statutory profit was dampened by £9.7 million of separately disclosed items, including a £6.5 million loss from a payment fraud in Spain.
What drove the first half
- Venues grew LFL NGR 5% to £296.1 million, helped by the early phase of casino machine reforms and steady bingo performance.
- Digital delivered LFL NGR of £123.7 million, up 8%, with UK Digital up 9% to £109.4 million and strong Grosvenor online growth.
- Group ROCE advanced to 15.9%, highlighting better returns on recent investments.
- Operating leverage was visible, but wage inflation and new statutory levies increased the cost base.
Grosvenor Casinos – machine rollout gaining traction
Rank installed 850 additional gaming machines across 37 Grosvenor venues between August and December, right on plan. Machines were the fastest-growing product, up 11% year-on-year, and up 16% in venues that received new installations. Average weekly NGR reached £7.8 million, up 6% on last year, with London up 5% and the rest of the UK up 6%.
Underlying LFL operating profit edged up 1% to £20.9 million, despite employment costs rising 5% to £82.5 million. Table gaming NGR rose 2%, electronic table gaming rose 6%, and sports betting is being rolled out beyond Luton following legislative reform. The medium-term aim remains £9.5 million NGR per week, supported by product optimisation, data-led table management and venue investments.
Mecca and Enracha – bingo improving, machines doing more of the work
Mecca LFL NGR grew 4% to £69.8 million, even with visits down 1%. Gaming machines continue to pull weight, with NGR up 9% and now 43% of Mecca’s NGR. Underlying LFL operating profit jumped to £2.7 million (from £0.7 million). A key tailwind arrives in April 2026 when the UK’s 10% bingo duty is abolished, expected to benefit Rank by around £6.5 million annually, with Mecca seeing some benefit from Q4.
Enracha in Spain posted 6% LFL NGR growth to £22.3 million and 5% growth in underlying LFL operating profit to £5.9 million, supported by refurbishments and stronger machines performance.
Digital – strong momentum, but RGD 40% is the elephant in the room
Digital LFL NGR rose 8% to £123.7 million, with UK Digital up 9% to £109.4 million. Grosvenor online grew 17% and Mecca online 5%. Underlying LFL operating profit increased 12% to £17.8 million, although total digital operating profit was £14.0 million after SDIs, reflecting the Spanish payment fraud impact in YoBingo.
The big structural headwind is the increase in Remote Gaming Duty from 21% to 40% in April 2026. Management estimates a c. £46 million annualised impact before mitigation. Actions already underway include sharply cutting above-the-line media and sponsorships and renegotiating supplier contracts. The business also faced a first full half of the new statutory levy at 1.1% of GGY (profit impact £1.2 million) and online slot staking limits introduced in April 2025 (c. £2 million profit impact in H1).
On growth, Rank is launching live slot streaming, enhancing live casino with venue-led content and rolling out unified membership in H2 for Mecca across online and venues. Internationally, Spain returned to growth in Q2 following new apps, with a new bingo platform due in Q3 to remove capacity constraints, and Portugal saw a successful soft launch of YoBingo ahead of a full launch in February 2026.
Cash, capex and the balance sheet
Net free cash flow was £3.8 million, after £27.6 million of capex in the half. Full-year capex is now guided to £50 million – £55 million. Net cash pre IFRS 16 was £39.4 million, while net debt post IFRS 16 rose to £165.1 million, reflecting £204.5 million of lease liabilities following lease extensions. Debt comprised a £30.0 million term loan and £204.5 million in finance leases, offset by £69.4 million of cash.
The interim dividend of 1.00p per share will be paid on 13 March 2026 to shareholders on the register as at 13 February 2026.
Governance, SDIs and restatement
Separately disclosed items totalled £9.7 million, including a £6.5 million loss from a payment fraud in Enracha and YoBingo. The investigation is complete, controls have been strengthened, and recovery is unlikely.
Rank also restated prior periods after identifying historical errors in lease accounting and an onerous lease provision. At 30 June 2025, lease liabilities increased £23.9 million and right-of-use assets £12.7 million, with an £8.8 million reduction to retained earnings. These adjustments are non-cash.
On the Board, John O’Reilly retires as CEO, with CFO Richard Harris stepping up as interim CEO from 30 January 2026. John H. Ott became Chair in November 2025. An interim CFO process is well advanced.
Outlook and what to watch
Trading over Christmas and New Year was strong, and January has been in line with expectations. The big headwinds land in Q4: UK Digital’s RGD step-up and higher National Living Wage in venues. Mitigations are “well advanced”, and Rank remains confident in delivering full-year performance in line with expectations and in reaching at least £100 million operating profit in the medium term.
- Grosvenor weekly NGR trajectory vs the £9.5 million medium-term target.
- RGD mitigation pace and impact on Digital profitability in Q4 and into 2026/27.
- Mecca’s unified membership rollout and early benefits from bingo duty abolition in Q4.
- Spain’s new bingo platform going live in Q3 and the full Portugal launch in February 2026.
- Free cash flow progression against capex and lease commitments.
- Leadership transition – interim CFO appointment and progress on the CEO plan.
My take
This is a broadly positive half with growth in every division, better ROCE and a clear investment story in casinos and digital. The dividend uplift and reaffirmed medium-term target are encouraging signals.
The negatives are not small: statutory profit fell, net debt is higher due to leases, and the RGD hike is a material profitability drag for UK Digital. Wage inflation and the Spanish fraud add to the mix, and the accounting restatement is an unwelcome footnote, even if non-cash.
Near term, it is about execution: ramping the machine opportunity, tight cost control in digital, and converting product improvements into cash despite higher taxes. If Rank stays on course and the industry consolidates under 40% RGD, the company’s brands, venues and cross-channel proposition should be well placed.
Further information
Analyst webcast details and replay are available via www.rank.com and the registration link at brrmedia.news/RANK_HY26.
