Rank Group Plc · LSE:RNK
Rank — The Rank Group — H1 2024/25 Earnings Presentation
30 slides from Rank's earnings presentation, December 2024
Slide 1: Interim results for the six months ended 31 December 2024
The Rank Group Plc Interim results for the six months ended 31 December 2024
Slide 2: John O’Reilly, Chief Executive
John O’Reilly Chief Executive
Slide 3: Overview
Overview Continued strong momentum with growth in all businesses • Strong HY performance with LFL NGR up 13%, to £401.8m Underlying LFL operating profit • Underlying LFL operating profit of £32.9m, up 55% on H1 2023/24 £32.9m (+ 55%) (£21.2m) • Group underlying LFL operating margin of 8.2%, up from
Slide 4: Financial performance
Financial performance Richard Harris Chief Financial Officer
Slide 5: Strong revenue growth offsets the impact of higher employment costs
Strong revenue growth offsets the impact of higher employment costs LFL Operating profit (£m) / LFL Operating margin (%) 28.4 (14.7) 8.2% (1.5) (0.5) 32.9 6.0% 21.2 H1 H12023/24 23/24 Higher Higher Employment Employment Depreciation Depreciation Othercosts Other costs H1 24/25 H1 2024/25 revenue rev
Slide 6: Grosvenor venues
Grosvenor venues Moving to sustained growth LFL NGR (£m) H1 H1 Change 2024/25 2023/24 Table gaming 90.6 73.7 23% LFL weekly average NGR £m Gaming machines 51.0 48.1 6% 7.3 Electronic gaming 29.2 25.1 16% 6.4 6.3 6.0 5.8 5.9 Other (inc. Poker) 22.0 20.6 7% 5.1 Total LFL NGR 192.8 167.5 15% London 62.
Slide 7: Digital
Digital Accelerating growth and driving scale H1 H1 LFL NGR (£m) 2024/25 2023/24 Change Mecca 48.1 39.8 21% LFL weekly average NGR £m Grosvenor 41.0 33.5 22% 4.5 4.6 Other proprietary brands 11.6 10.9 6% 3.8 4.0 3.7 3.4 3.4 Non proprietary brands 6.0 8.0 (25)% Yo /Enracha 13.5 12.9 5% LFL NGR (£m) 1
Slide 8: Bingo
Bingo Cash maximisation H1 H1 Mecca Change 2024/25 2023/24 LFL visits ('000) 2,367.3 2,344.4 +1% • Rationalisation of the estate has created a more compelling customer offer LFL NGR (£m) 68.6 64.5 +6% • Targeted investments in gaming machines and external signage are Underlying LFL 0.3 - - operating
Slide 9: Free cash flow bridge
Free cash flow bridge £m Lease payments H1 H1 2024/25 2023/24* (18.9) Net finance Opening net (debt) cash pre IFRS 16 20.9 (5.9) 25.4 cost and Tax (2.2) Net free cash flow 4.3 23.5 Capex Business disposal 3.0 - Dividend paid (4.0) - Depreciation and Closing net cash pre IFRS 16 24.2 17.6 amortisatio
Slide 10: Capital allocation policy
Capital allocation policy 1 Maintain a strong balance sheet and appropriate financing structure 2 Disciplined capital investment in the customer proposition and to maximise the opportunity presented by land- based reforms 3 A progressive dividend, with a dividend payout ratio that grows to over 35%
Slide 11: Liquidity
Liquidity Extension of banking facilities ensures Committed facilities / £m appropriate financing structure 120 120 120 115 • Extended £100m of the current £120m bank facility for a 100 further 12 months 75 90 90 90 • Further extension option in December 2025 at the discretion of 90 75 the Banking G
Slide 12: Capital expenditure
Capital expenditure Disciplined approach to investment – focused on delivering returns H1 H1 • Working through historic maintenance backlog £m 2024/25 2023/24 Change 30% Grosvenor 16.4 7.0 +9.4 • Prioritised growth expenditure in both Maintenance Grosvenor and Mecca venues with clear hurdle Mecca 4.
Slide 13: Improving cash generation profile
Improving cash generation profile FY 2024/25 6 months – 2 years Beyond 2 years Investing for growth Balancing investment Growing shareholder and returns returns Operating Operating Operating profit Capex profit profit Capex Capex Cash flow neutral Modest cash generation Strong cash generation 13 The
Slide 14: Strategic update and outlook
Strategic update and outlook John O’Reilly Chief Executive
Slide 15: Four key areas of medium term focus
Four key areas of medium term focus To excite and to entertain our customers Grosvenor sustained growth Digital accelerated growth Bingo - cash maximisation Gambling Act Review Technology Safer People and data gambling and culture 15 The Rank Group Plc Interim results for the 6 months ended 31 Decem
Slide 16: Grosvenor sustained growth
Grosvenor sustained growth Strong organic growth with legislative reforms coming soon • Organic growth opportunity to grow weekly NGR from £7.3m to c. £8m • Table gaming investment: roulette wheels & gaming tables • Completely renewed electronic gaming terminal estate • The Vic (£15m) investment wil
Slide 17: Digital accelerated growth
Digital accelerated growth Benefits of proprietary platforms being seen with cross-channel brands powering growth • High quality, seamless and personalised cross-channel customer experiences is our overriding ambition • New proprietary apps for Mecca and Grosvenor • Mecca cross-channel single member
Slide 18: Cash maximisation in Bingo
Cash maximisation in Bingo Great value social entertainment • Higher liquidity, stronger prize boards and a more vibrant Mecca estate • Mainstage bingo game key to driving visits • Roll-out of c. 1,500 gaming machines in H2 • Growing confidence within Mecca with record levels of colleague engagement
Slide 19: Gambling Act Review
Gambling Act Review A once in a generation opportunity • Gambling Minister publicly supportive of casino industry's "relatively modest" reforms • Legislative process for casino reforms expected to complete in H2 with rollout of customer experience improvements beginning this summer • Gaming machine
Slide 20: Current trading and Outlook
Current trading and Outlook • All businesses experienced strong trading through the Christmas and New Year holiday period and revenue has been in line with our expectations through January • Plenty of opportunity to drive revenue growth in each of our businesses • Increased cost pressures with the s
Slide 21: Appendices
(xo Rank Group Appendices
Slide 22: Income statement
Income statement H1 2024/25 H1 2023/24 LFL underlying operating profit • Underlying net financing charge lower than prior 32.9 21.2 period due to lower loan amortisation costs and FX, closed clubs and re-opening - 0.4 lower drawings in the period. Underlying operating profit 32.9 21.6 • Separately d
Slide 23: Separately Disclosed Items
Separately Disclosed Items H1 2024/25 H1 2023/24 • Amortisation (£1.9m) relates to the historic acquisitions of Stride Amortisation of acquired intangible assets (1.9) (3.2) and YoBingo Closure of venues 2.3 (0.1) • Closure of venues £2.3m relates Property related provisions (0.2) (1.6) to the surre
Slide 24: Balance sheet
Balance sheet At 31 Dec At 30 Jun At 31 Dec At 30 Jun 2024 2024 2024 2024 Assets Liabilities Non-current assets Current liabilities Intangible assets 442.6 446.4 Trade and other payable (145.9) (149.0) Property, plant and equipment 123.9 112.5 Lease liabilities (32.4) (32.6) Right-of-use assets 57.9
Slide 25: Financial guidance
Financial guidance FY 25 FY 26 Employment costs remains the major headwind. Following the changes announced in the UK Budget we expect employment costs Employment costs expected to increase 6-7% to grow by c. 10% Energy costs are expected to be broadly flat on FY24. No change Interest costs are expe
Slide 26: Group datasheet
Group datasheet H1 H1 H1 H1 H1. 2024/25 2023/24 2023/24 2022/23* 2022/23* 2021/22* 2021/22* 2020/21* 2020/21* Net gaming revenue (£m) 401.8 734.7 362.6 681.9 338.9 643.5 333.7 329.6 177.6 - YOY growth 11% 8% 7% 6% 2% 95% 88% (48%) (55%) Operating profit (£m) 32.9 46.3 21.6 18.5 1.2 36.0 23.1 (86.1)
Slide 27: Grosvenor datasheet
Grosvenor datasheet H1 H1 H1 H1 H1 2024/25 2023/24 2023/24 2022/23 2022/23 2021/22* 2021/22 2020/21 2020/21 Casino licences: London 10 9 9 9 9 9 9 9 9 Rest of UK 60 62 62 62 62 62 63 62 62 Total 70 71 71 71 71 71 72 71 71 Non-trading licences 7 7 7 7 7 7 7 7 8 Net gaming revenue (£m) 192.8 331.3 167
Slide 28: Digital datasheet
Digital datasheet H1 H1 H1 H1 H1 2024/25 2023/24 2023/24 2022/23* 2022/23* 2021/22* 2021/22* 2020/21* 2020/21* NGR (£m) 120.2 226.0 108.4 202.9 100.8 182.8 92.1 177.4 86.5 Operating profit n/a n/a n/a 18.2 8.0 14.9 3.7 1.6 1.5 pre central costs allocation (£m) Operating margin n/a n/a n/a 9.0 7.9 8.
Slide 29: Mecca datasheet
Mecca datasheet H1 H1 H1 H1 H1 2024/25 2023/24 2023/24 2022/23 2022/23 2021/22 2021/22 2020/21 2020/21 Venues 51 52 55 56 64 71 72 72 76 Revenue (£m) 68.6 138.9 67.2 136.3 67.0 134.0 65.9 55.5 39.0 Operating (loss) profit pre n/a n/a n/a 2.8 (1.2) (0.8) (1.5) (18.9) (5.3) central costs allocation (£
Slide 30: Enracha datasheet
Enracha datasheet H1 H1 H1 H1 H1 2024/25 2023/24 2023/24 2022/23 2022/23 2021/22 2021/22 2020/21 2020/21 Revenue (£m) 20.2 38.5 19.5 36.4 17.7 30.1 14.1 17.5 9.0 Operating profit pre central costs allocation (£m) n/a n/a n/a 9.2 4.0 7.5 2.7 (0.2) (0.6) Operating margin pre central costs allocation (