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The Rank Group has reported an 11% year-on-year rise in net gaming revenue (NGR) to £179.6m for the quarter ending 30 September 2023 (Q1 2024).

Venues revenue rose by 12% on a like-for-like basis to £127.8m.

Venues growth was primarily driven by performance at Grosvenor Casinos, where revenue spiked 13% to £84.2m. This was due to a 9% uptick in visits and a 4% upturn in spend per visit.

London NGR grew by 8%, while NGR from the rest of the UK grew by 16%. Average weekly NGR came in at £6.4m, up 10% on the same period of last year.

Rank’s Mecca bingo venues delivered NGR growth of 11%, driven by a 4% increase in customer visits and a 7% rise in spend per visit.

Meanwhile in Spain, the operator’s Enracha bingo business grew NGR by 9%.

Digital revenue climbed 7% to £51.8m for the period. The online performance saw 6% growth in the UK, as well as a 15% increase in Spanish online operations.

NGR for the group’s two main online brands in the UK – Grosvenor and Mecca – climbed by 14% and 9%, respectively.

Future trading

Looking ahead to future trading periods, Rank said the operating environment remains challenging with continuing high inflation and interest rates. This means the discretionary spend of consumers is still under some pressure.

Despite those headwinds, the group said it was on track to deliver full-year revenue and profit growth in line with expectations, which are still to be officially communicated.

CEO comments

“I am pleased to report that Rank has made a strong start to the year,” said Rank Group CEO John O’Reilly.

“After an encouraging second half of 2022/23, we have maintained the momentum through the first quarter of 2023/24 and have made good progress in driving revenue and profit growth across the group.

“Going forwards, we remain focused on delivering the key growth initiatives within our digital business and preparing our UK venues for the critical modernising reforms in the Government’s review of the gambling legislation.

“These reforms, which are planned to be implemented by next summer, will help Grosvenor and Mecca to better meet the needs of our existing and prospective customers,” he added.

Analyst reaction

London-based investment brokerage Peel Hunt upgraded Rank Group stock from Add to Buy and retained its target price of 100p following the firm’s quarterly trading update.

“Rank is highly operationally leveraged, and a solid recovery is starting to feed through to the bottom line,” said Peel Hunt analyst Ivor Jones.

“More casino gaming machines have potential to boost growth materially, probably from the autumn of 2025.

“Despite clear signs of recovery and upside potential from regulatory change, Rank’s share price has drifted off.

“We believe that this potential will become increasingly apparent as the year progresses and, seeing no reason to lower our target price, upgrade our recommendation,” he added.

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