The Rank Group Plc

The company reported like-for-like net gaming revenue of GBP 834 million, up 6%, and operating profit of GBP 78.6 million, up 21%. Operating margin improved from 8.1% to 9.4%. Full-year dividend was 3.5p per share, up 35%, including a proposed final dividend of 2.5p per share. Net free cash flow was GBP 25.5 million, capex was GBP 50.2 million, lease payments were GBP 48.3 million, year-end net cash was GBP 56.8 million, and accounting net debt was GBP 147.2 million after IFRS 16 leases. For the business mix, Grosvenor revenue was up 5%, digital revenue was up 8% for the year and 12% in Q4, and Spain grew 7%. Management said FY '27 capex should be around GBP 40 million, with the full-year impact of higher UK digital RGD expected to reduce profitability by about GBP 15 million next year after mitigations. They also said the next cohort of 650 machines would require about GBP 25 million to GBP 27 million of capex, but not materially all of that was needed to reach the GBP 100 million operating profit ambition.

Richard Harris framed the year as a positive evolution of strategy rather than a reset, saying the group has a clear right to win in casino-led and bingo-led gaming. He emphasized using estate segmentation, data, technology, and customer insight to maximize returns from existing assets while selectively deploying capital into higher-return opportunities. His tone was confident but pragmatic: he repeatedly acknowledged higher tax pressure, market change, and the need to optimize before spending more.

Cliff Baty highlighted the strong financial bridge: revenue growth contributed GBP 24.5 million, offset by a GBP 10.1 million RGD hit, GBP 8.1 million of mitigation savings, GBP 4.6 million of depreciation increase, and GBP 1.3 million of start-up cost in Portugal, leading to GBP 78.6 million operating profit. He pointed to GBP 25.5 million of net free cash flow, GBP 50.2 million of capex, and year-end net cash of GBP 56.8 million, noting the balance sheet was strengthened by a new 4-year GBP 120 million RCF on improved terms. He also said FY '27 capex should be around GBP 40 million and reiterated a progressive dividend policy with a payout ratio above 35%, while saying inorganic deals would need to meet strict financial and strategic criteria.

Analysts focused on how the route to GBP 100 million operating profit has changed, whether the 40% RGD increase is already causing market exits, and how much more machine rollout is needed. Management said the digital contribution to the target is now lower because of RGD, but they do not need a material number of extra machines beyond those already installed to reach GBP 100 million; the next 650 machines would be more about maximizing returns than achieving the target itself. They also said they have not yet seen material competitive exits from the higher tax environment, though smaller operators have left, and that most digital growth is coming from new customers rather than land-based cross-sell. On Portugal, they said it remains an investment phase, expect another loss-making year, and are aiming for positive cash generation in FY '28.