The Rank Group Plc (RNK.L) | Investment Case

1. Company Snapshot

1.a. Company Description

The Rank Group Plc, together with its subsidiaries, provides gaming services in Great Britain, Spain, Belgium, and India.It operates through Grosvenor Venues, Mecca Venues, Digital, and International Venues segments.The company offers a range of casino table games, including roulette, blackjack, baccarat, and poker; electronic roulette and slots machine games; and community games, such as bingo, as well as sports betting and food, drink, and live entertainment.

It also operates digital channels, including live casino; social and bingo clubs; and online digital card games.In addition, the company offers support services to interactive gaming; property services; and marketing services.Further, it processes credit transfers; operates parking for social and bingo clubs; and develops and maintains online gaming software.

The company was founded in 1937 and is based in Maidenhead, the United Kingdom.The Rank Group Plc is a subsidiary of Guoco Group Limited.

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1.b. Last Insights on RNK

The Rank Group Plc's recent performance has been driven by a surge in individual investor ownership, with 59% of shares held by this group, as per the latest data. This significant control by individual investors implies a high level of public engagement and potential for grassroots-driven growth. Furthermore, the company's recent earnings release has shown a strong uptick in revenue, with a notable increase in gaming and leisure activities. Additionally, the company's focus on shareholder value has been evident through its commitment to returning capital to investors, with a robust share buyback program in place.

1.c. Company Highlights

Last Price	90
Change Percentage	-1.85%
Open	91.7
Previous Close	91.7
Market Cap ( Millions)	422
Volume	591289
Year High	166.2
Year Low	75
M A 50	97.73
M A 200	122.2

FCF Yield	18.45%
Dividend Yield	3.28%
ROE	9.03%
Debt / Equity	104.68%
Net Debt / EBIDTA	334.94%
Price To Book	1.11
Price Earnings Ratio	12.28
Price To FCF	5.42
Price To sales	0.52
EV / EBITDA	7.67

2. Rank Group's Strong H1 2025 Results: A Bright Future Ahead

Rank Group's half-year results for 2025 showcased a robust commercial and financial performance, with revenue and profit growth across all businesses. Like-for-like net gaming revenue rose 6% to GBP 419.8 million, and underlying like-for-like operating profit increased 15% to GBP 40.6 million, with a 9.7% operating profit margin. The group's return on capital employed improved to 15.9%. The earnings per share (EPS) came in at -0.03928, missing analyst estimates of 0.031. Revenue growth was driven by a 6% increase in average weekly net gaming revenue in Grosvenor Casino, a 4% growth in Mecca Bingo's net gaming revenue, and an 8% rise in digital revenue.

Publication Date: 09:46

                                    📋 Highlights
                                    Revenue & Profit Growth::
                                                Like-for-like net gaming revenue rose 6% to GBP 419.8 million, with underlying operating profit up 15% to GBP 40.6 million (9.7% margin).
Gaming Machine Expansion::
                                                Grosvenor added 850 new machines (65% increase), boosting average weekly NGR to GBP 7.8 million (+6%) and driving 16% machine income growth.
Digital Momentum::
                                                Digital revenues grew 8% (Grosvenor +17%, Mecca +5%), with strong average revenue per user growth and a new licensed bingo launch in Portugal.
Profit Target Confidence::
                                                Group on track for GBP 100 million+ operating profit, supported by 500 bps margin improvement in Grosvenor and Mecca’s 40% bingo duty relief.

                                

Operational Highlights

The rollout of 850 additional gaming machines in Grosvenor casinos has been a significant contributor to the growth, with average weekly net gaming revenue increasing by 6% to GBP 7.8 million per week. Mecca Bingo's net gaming revenue grew 4%, and Enracha in Spain saw a 6% increase. Digital revenue grew 8%, driven by strong growth in average revenue per user, with Grosvenor digital revenue up 17% and Mecca Bingo up 5%.

Outlook and Guidance

The company has recommended an interim dividend per share of GBP 0.01 and is on track to achieve an operating profit of GBP 100 million and beyond. For the full year, employment costs are expected to increase by a similar percentage as the prior year. Capital expenditure was GBP 27.6 million, and the guidance for the full year has been adjusted to GBP 50-55 million. The company is confident in its medium-term opportunity, with plans to deliver average weekly NGR of GBP 9.5 million and 500 basis points margin improvement.

Valuation and Metrics

With a P/E Ratio of 12.61 and an EV/EBITDA of 7.78, the market seems to have priced in a reasonable growth trajectory for Rank Group. The Dividend Yield stands at 3.19%, indicating a relatively attractive income stream. The ROIC of 7.62% and ROE of 9.03% suggest a decent return on investment. As the company continues to invest in customer incentives and marketing, the pipeline of initiatives in place is expected to drive performance and help achieve the GBP 100 million operating profit target.