Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.
(Sharecast News) - Shares in Rank Group were sliding on Thursday morning, even after it reported a sharp rise in annual revenue and profit on Thursday, underpinned by strong returns on targeted investments and aided by the passing of land-based casino reforms.
For the year ended 30 June, like-for-like net gaming revenue (NGR) rose 11% to £795.3m, with all business segments in growth.
Underlying like-for-like operating profit increased 38% to £63.7m, lifting operating margins to 8% from 6.5%.
Statutory operating profit jumped to £67.0m from £29.4m, while profit before tax surged 248% to £53.9m.
Net cash before IFRS 16 more than doubled to £45.4m.
The FTSE 250 gambling operator's board recommended a final dividend of 1.95p, taking the total to 2.60p, up 206% year-on-year.
Grosvenor venues delivered 14% revenue growth, with average weekly NGR rising to £7.3m.
Rank said it expected that to reach £8.0m excluding the impact of incoming reforms, which would add around 850 gaming machines across 50 casinos and introduce sports betting in 38 venues.
Digital revenue grew 10%, in line with medium-term guidance, while Mecca bingo and Spanish Enracha venues posted gains of 5% and 9% respectively.
"We have had another successful year, delivering revenue growth and profit ahead of our expectations," said chief executive John O'Reilly.
"Both online and in our venues the customer reaction to the investments we are making in our businesses has been excellent.
"We are growing profitability and have a strong net cash position which will enable both continued investment and progressive dividend returns for our shareholders."
O'Reilly said that, with the "long-awaited" legislative reforms for casinos now delivered, the group was at an inflection point.
"The Grosvenor business will benefit from the higher gaming machine allocations and the introduction of sports betting which will better meet existing customer needs and increase the attractiveness of casinos to a broader base of consumers.
"Our bingo businesses continue to strengthen.
"Our online business is tracking to the expected 8-12% revenue growth rate as we drive the benefits of our proprietary technology and develop seamless cross-channel experiences for our customers."
Rank said trading in the first six weeks of the new financial year showed group NGR up 9%, adding that it remained on track to meet expectations for the 2026 financial year.
At 1012 BST, Rank Group shares were down 4.53% at 139.2p.
Reporting by Josh White for Sharecast.com.
