On Thursday, the Rank Group announced a 5% increase in its like-for-like Net Gaming Revenue (NGR) for the first quarter of the 2026/27 financial year. The NGR reached £216.1 million ($286.5 million) for the three months ending on September 30, 2026, attributed to steady revenue growth across various channels despite shifting market dynamics.
The company labeled the quarter as "a strong start to the new financial year". Assuming the current tax structure in the UK remains unchanged, Rank Group anticipates that its operating profit will align with market predictions for the entire year.
Chief executive Richard Harris highlighted concerns over a potential doubling of the UK’s Machine Games Duty (MGD), which might be proposed in the upcoming autumn budget. He emphasized that increased MGD rates could raise operating costs, while also diminishing tax revenues and impeding future investment in the gaming sector. Harris remarked, "Any increase to Machine Games Duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment." He argued that last year, HM Treasury acknowledged these economic concerns and stated that casinos and bingo clubs could contribute to the government's economic growth objectives, provided that the policy environment remained supportive.
In a report released last month, Deutsche Bank indicated that Rank would be particularly vulnerable to industry challenges if an MGD hike occurred. The bank estimated that a rise in duty could cost the company around £35 million annually, which would be approximately 44% of its predicted EBIT for 2028 and about 17% of its near-term EBITDA after partial mitigation. In light of this, Deutsche Bank has adjusted its rating for Rank from "buy" to "hold".
On a positive note, Rank’s digital division experienced a 6% growth in like-for-like NGR, totaling £64.9 million for the quarter. This progress was primarily driven by a 6% expansion in its UK digital segment, particularly through Mecca’s online brand, while international digital NGR increased by 4%, reflecting robust performance in overseas markets.
Grosvenor Casinos also reported a 6% increase in like-for-like NGR, bringing it to £108.1 million, facilitated by a 1% rise in customer visits and a 5% boost in spending per visit. This indicates a notable increase in customer engagement. Mecca bingo halls maintained stable like-for-like NGR at £32.2 million, despite a 3% decline in visitors attributed to unusually hot weather in the UK. Nonetheless, the 3% increase in spending per visit helped sustain revenue levels.
Rank’s Spanish venue subsidiary, Enracha, saw a 7% increase in like-for-like NGR to £10.9 million, with an 11% surge in electronic gaming revenue driving much of this growth.
The quarter also saw a significant highlight in gaming machines, which showed a 14% revenue increase, whereas table gaming and electronic gaming experienced more moderate growth at 3% and 5%, respectively. Rank Group expressed confidence in further optimizing its machine estate for revenue improvement.
However, the company announced the closure of three venues in Swansea, Reading Central, and Sunderland due to their "no longer economically viable" status in the medium term. Earlier this year, Rank highlighted that its underlying operating profit for the year ending June 2026 would reach at least £76 million and reported a 6% year-on-year increase in like-for-like NGR, reaching approximately £834.1 million. This positive momentum extended into the fourth quarter, where like-for-like NGR reached £208.9 million, also reflecting a 6% increase compared to the previous year.
Rank Group is set to release its interim financial results for the six months ending December 31, 2026, on January 28, 2027.
