Rank Group CEO Richard Harris didn’t hold back in his comments on the current pressures facing the UK’s retail casino sector as he discussed the company’s FY2025/26 results. Harris specifically took aim at anti-gambling efforts, such as the recent push by the Social Market Foundation to increase duty on ‘higher-risk Category B electronic gaming machines’. He said that these moves have “cast clouds” over the industry. But this year has already seen large tax increases, with remote gaming duty jumping from 21% to 40%. Moreover, new Prime Minister Andy Burnham has proposed giving councils more authority to limit Adult Gaming Centers. Harris argued that these policies threaten the viability of land-based gambling businesses, labeling betting shops as “dodgy businesses”, akin to the burgeoning vape shop industry.
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Financial Performance Shows Mixed Results
Despite these challenges, Rank Group ended the fiscal year with a 5% increase in net gaming revenue (NGR), reaching £835 million ($1.13 billion), bolstered by strong growth in its digital operations. Underlying EBITDA rose by 15% to £138.3 million, and operating profit surged 21% to £78.6 million. However, the company couldn’t escape the impact of higher taxes. Profit after tax fell sharply by 23% to £29.9 million. Rank’s bottom-line was further pressured by a 7% drop in reported operating profit to £55.7 million — a clear indication of the challenging environment it’s navigating. On a like-for-like basis, excluding the noise of venue changes and currency shifts, NGR grew 6% to £834.1 million, with operating profit up 20% to £79.9 million. Yet, net free cash flow dipped to £25.5 million, even as net debt improved slightly to £147.2 million.
Digital Sector Outshines Retail
Rank’s digital segment led the charge with an 8% rise in like-for-like NGR, hitting £248.5 million. Q4 alone saw a 12% jump in digital revenue, which Rank described as “particularly encouraging.” This cushion was key for the company’s financial resilience throughout the year. On the retail side, Grosvenor casinos experienced a 5% increase in average weekly NGR, hitting £7.6 million due to the deployment of 850 new machines across 37 locations. Customer visits and spending per visit also rose, although table gaming took a hit due to geopolitical tensions in the Middle East. Mecca venues saw a 4% increase in NGR, even as nine locations shuttered due to poor commercial performance. Still, rank noted “strong trading momentum” as group NGR grew by 8% in the early weeks of FY2026/27, led again by a 10% boost in the digital area. Grosvenor’s gaming machine revenue also rose 15%.
Regulatory Concerns and Leadership Changes
Rank remains cautious about future profitability. The company warned that maintaining the current 20% machine games duty is critical; any increase here could further threaten venue viability for Grosvenor and Mecca. The remote gaming duty is set to almost double, dimming digital profit prospects for FY26/27. On the leadership front, Richard Harris was confirmed as Rank’s permanent CEO in July after serving in an interim capacity. He took over from John O’Reilly, who departed in January. Still, upcoming personnel changes include Lucinda Charles-Jones stepping down from the board after the October AGM. Katie McAlister will temporarily take over as chair of the remuneration committee. Meanwhile, Rank is actively seeking a replacement for Karen Whitworth as a senior independent director. Looking ahead, Rank is aiming to surpass £100 million in underlying operating profit in the medium term. However, whether they can navigate the regulatory and taxation market to achieve this remains an open question. The board will meet next on October 8 to discuss further strategic directions.
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.
