On Thursday, Rank Group announced a 5% rise in like-for-like Net Gaming Revenue (NGR) for the first quarter of its financial year 2026/27, totaling £216.1 million ($286.5 million) for the period ending 30 September 2026. The company attributed this growth to stable revenue across various channels, despite shifting market dynamics, and described the quarter as a "strong start to the new financial year." Rank anticipates meeting market expectations for a full-year operating profit, provided the UK tax framework remains unchanged.
However, CEO Richard Harris expressed concern over the potential doubling of the UK's Machine Games Duty (MGD), which could be included in the government's forthcoming autumn budget. He warned that an increase in MGD would inflate operating costs, reduce venue viability, threaten jobs, and curtail tax receipts, thereby stymying future investment. Harris noted, "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. HM Treasury recognised these economic arguments last year," underscoring that casinos and bingo clubs could bolster the government's economic initiatives if policy conditions remain favorable.
Recent analysis from Deutsche Bank positioned Rank at significant risk if an MGD hike is enforced. The bank estimated that an increase could cost Rank around £35 million annually, which would equate to roughly 44% of the company's projected EBIT for 2028 and about 17% of its EBITDA in the shorter term, even after some mitigation. As a result, it maintained a "hold" rating for Rank, down from a "buy" rating given in January.
On a positive note, the company's digital division grew its like-for-like NGR by 6% to £64.9 million in the quarter, largely driven by its UK digital operations, particularly from Mecca's online brand. International digital NGR also increased by 4%, indicating solid performance in global markets.
Grosvenor Casinos reported a 6% increase in like-for-like NGR, reaching £108.1 million, boosted by a 1% rise in visits and a 5% increase in spend per visit, suggesting improved customer engagement. However, Mecca bingo halls maintained steady like-for-like NGR at £32.2 million despite a 3% drop in visitor numbers, which the company linked to prolonged hot weather in the UK. A corresponding 3% increase in spend per visit helped stabilize revenue levels.
In Spain, Rank's venue subsidiary Enracha saw a 7% growth in like-for-like NGR to £10.9 million, primarily due to an 11% jump in electronic gaming revenue, reflecting the business's expanding operations.
Gaming machines proved to be a significant revenue driver during the quarter, with revenue climbing by 14%, while table gaming and electronic gaming grew by 3% and 5%, respectively. Rank expressed optimism about further optimizing its machine estate for increased revenue.
In a strategic move, Rank closed three venues in Swansea, Reading Central, and Sunderland, citing their inability to remain economically viable in the medium term. Earlier this year, the company projected an underlying operating profit of at least £76 million for the year ending June 2026. It recorded a 6% year-on-year rise in like-for-like NGR, totaling approximately £834.1 million for the 12-month period, and noted that the fourth quarter also saw a 6% increase in like-for-like NGR to £208.9 million compared to the previous year. Rank is set to release its interim financial results for the six months ending 31 December 2026 on 28 January 2027.
