Shares in Rank (LON:RNK) rose after the gaming and entertainment group reported forecast-beating FY26 profits and flagged a ‘good start’ to FY27.
The Grosvenor Casinos and Mecca Bingo brands owner also reiterated its medium-term ambition to deliver underlying operating profits of at least £100 million.
Income-hungry investors welcomed a 35% hike in the total dividend to 3.5p. This underscored management’s confidence in Rank’s improving cash generation and growth prospects.
Rank generates growth across the board
For the year to June 2026, Rank delivered a 21% rise in underlying operating profits to £78.6 million. That was ahead of recently-upgraded guidance. Like-for-like net gaming revenue ticked up 6% to £834.1 million.
Encouragingly, all of Rank’s businesses were in growth for a fifth consecutive year. This reflected the return on capital investments and strong growth in the company’s gaming machine operations.
Growth across the casino, bingo and digital operations offset higher taxes, regulatory costs and inflationary pressures. However, statutory pre-tax profits did decline by 15% to £39.2 million as cost pressures impacted the bottom line.
‘Good start’ to FY27
Rank highlighted a good start to FY27, with net gaming revenue up 8% in the first six weeks of the new financial year. This was despite disruption to inbound Middle East visitors to London caused by the Iran conflict. Within this, digital revenues grew 10% and Grosvenor gaming machine revenues grew 15%.
CEO Richard Harris insisted: ‘There is material growth runway ahead, most obviously for our Grosvenor casino venues where gaming machines optimisation is an area of sharp focus and significant opportunity.’
Harris conceded: ‘Tax proposals from anti-gambling campaigners continue to cast clouds over a regulated industry that is proud to support jobs across the country, deliver great hospitality experiences to millions of customers and Rank paid over £225 million in taxes and duties last year.’
He also warned: ‘Tax increases for clubs like ours, with high levels of supervision and operating on tight margins, will swiftly lead to lower tax receipts as much-loved bingo halls and casinos will be forced to close, impacting customers in local communities.’
We are not massive fans of the gambling sector given the headwinds operators face from taxes, costs and regulatory pressures. Nevertheless, casino and bingo hall operator Rank is navigating the industry’s challenges rather well.
The company boasts market leading brands and a strong balance sheet and has plenty of headroom for growth on the digital side of the business. The accelerating trading momentum seen at the end of FY26 and into FY27 suggests there could be further upgrades to come.
Following the results, Peel Hunt reiterated its ‘buy’ rating and 175p price target for Rank. The broker argued Rank is ‘well positioned for medium-term profit growth along with increasing returns of capital for shareholders.’
