Annual Report and Accounts 2024

The Rank Group Plc Annual Report 2024

Group performance highlights 2024

Contents

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Group underlying NGR*

£734.4m

Group underlying operating profit*

£46.5m

Net cash pre IFRS 16

£20.9m

Net (debt)

£(132.5)m

Underlying EPS

5.9p

Customer NPS

52

Reported NGR

£734.7m

Group operating profit

£29.4m

Net free cashflow

£26.6m

Dividend per share

0.85p

Basic earnings per share

2.7p

Employee NPS

39

1. Introduction
2. Investment case

Group Overview

1. Welcome from Chair and Chief Executive
2. Business model
3. Our brands
4. Global teams and delivery

1. Our culture
2. Market review

Strategic Report

1. Chief Executive's Statement

1. Strategy

1. Key performance indicators 2023/24
2. Interview Chief Operating Officer

1. Operating review - Grosvenor Casinos

1. Operating review - Mecca venues

1. Operating review - Enracha venues

1. Operating review - Digital

1. Section 172 statement

1. Stakeholder engagement

1. Sustainability
2. Double materiality assessment

1. Customers

1. Colleagues
2. Environment

1. Communities
2. Chief Financial Officer's review
3. Alternative Performance Measures

57 Improving our risk management approach

63 Going concern, viability and non-financial and sustainability information statement

Governance

1. Chair's introduction to governance

1. Governance at a glance
2. How we are governed

1. Our Board

1. Our Executive Committee

1. Our culture and workforce engagement
2. Nominations Committee Report

1. Audit Committee Report

85 ESG & Safer Gambling Committee Report

1. Finance and Disclosure Committee Report
2. Remuneration Committee Report

1. Remuneration at a glance
2. Remuneration Policy

1. Annual Report on Remuneration

1. Directors' Report

1. Directors' Responsibilities

Financial Statements

1. Independent auditor's report

1. Group income statement

1. Group statement of comprehensive (loss) income
2. Balance sheets

1. Statements of changes in equity
2. Statements of cash flow
3. Notes to the financial statements

1. Five-yearreview
2. Shareholder information

Gambling Act Review

Page 11

Cross-channel strategy

Page 19

Safer gambling

Page 40

Net zero pathway

Page 43

Workforce engagement

Page 75

To excite and to entertain our customers

Grosvenor, Luton

1 Cash maximisation in bingo

Our bingo operations in both the UK and Spain are expected to make a positive contribution to the Group's profit and cash flow going forwards.

Through the rationalisation of our Mecca

bingo estate, specifically the closing of

loss-making venues and investing in our strong and highly competitive venues, Mecca has returned to profitability. Whilst the rationalisation of the estate

has now largely completed, we believe Mecca can return to double-digitoperating profit in the medium term.

In Spain, our Enracha venues are well invested, flagship venues. We have scope to further improve this already very competitive and profitable Spanish business.

2 Grosvenor recovery and growth

Prior to the COVID-19 pandemic, Grosvenor was delivering average weekly NGR of £7.5m. With a combination of the impact of the pandemic on our customer base and a tightening of regulation, average weekly NGR fell to £5.9m in 2022/23.

Through improving our approach to risk management and enhanced customer service and experience, Grosvenor is focused on driving average weekly NGR to at least £7m and beyond in the medium term.

Securing the much needed land-based reforms in the UK Government's Gambling

Act Review will provide Grosvenor's

customers with a more relevant offer

and deliver further significant growth

opportunities.

3 Digital growth

The Group's digital brands have significant opportunity to grow, holding relatively small market share positions compared to its venues' brands.

Following the acquisition of the proprietary technology, the digital business has been working through a comprehensive programme of platform and product enhancements, all focused on delivering an engaging, personalised and increasingly

cross-channel customer experience.

Great progress has been made in 2023/24, and we believe there is opportunity to deliver 8 to 12% compounded annual revenue growth and margin improvement of over 600 basis points over the medium

term.

4 Gambling Act Review

The UK Government's review of gambling legislation and regulation will provide the

much needed and vitally important reforms for land-basedcasinos and bingo.

The proposed changes to land-based casinos and bingo present the Group with a once in a lifetime opportunity to modernise and broaden the venues experience.

For further detail regarding the White Paper's proposals refer to page 11.

5 Technology and data

Technology and data are key to the improvements we are making across all of our businesses. There are four key technology projects:

Single content management system Providing the ability to manage all of

the website content for our UK facing brands on a single system. This enables more appealing and relevant real-time promotional content and a smoother customer experience.

App development

Currently, too small a portion of our digital revenue is driven by our apps. Through improved functionality and personalisation we expect to increase our digital app revenues as we better meet the needs of our customers.

Group-wide central engagement platform

Improving the real-time data capabilities across our digital and venues businesses is critical to meeting our customer needs. The platform is helping us deliver a much- improved personalised customer offer in a timely manner.

Modernisation of our RIDE platform We need to keep investing in our

proprietary platform to enable the Group to deliver, at speed, product and service enhancements to our customers.

6 Safer gambling

Safer gambling is at the heart of building a sustainable business for the long term and is pivotal to our success.

We believe that providing excellent customer service, safe environments, and protecting personal data are important factors that attract customers to our brands and support sustainable long-term earnings growth.

7 People and culture

Delivering a high-quality service to our customers depends on our ability to provide a positive working environment for our colleagues.

Recruiting and retaining high quality

talent, providing personal development opportunities and consistently driving colleague engagement are all critical parts of the relationship we have with our teams.

Our investment case is centred on the Group delivering against its strategic objectives.

Further information regarding the Group's strategic progress can be found on Strategic Pillar pages 15 - 17.

Enhancing our customer proposition

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Dear Stakeholder,

We are pleased to share with you The Rank Group Plc's Annual Report for the year ending 30 June 2024; a year which saw us achieve good progress across our businesses, developing and delivering

a range of plans focused

on prioritising the customer experience to support future growth.

Our Strategic Report captures our operational, financial and sustainability performance across our land-basedvenues, digital businesses, operational hubs and central functions. The Group has delivered a 9% increase in like-for-like net gaming revenue ('NGR') and, alongside strong cost control, resulted in operating profit more than doubling in the year.

Whilst we operate a number of market- leading brands, customers expect a unified playing experience whether in one of our venues or using our mobile apps; our continuous focus on delivering a seamless customer journey cross-channelremains our priority. This year, our teams have been focused on enhancing the customer journey so we can personalise their experiences across our varied brands, making them more connected and rewarding. Customers will only continue to interact with our brands if we offer them the best experience, whether that be in venue or online. This report outlines many of the delivered projects aimed at keeping the experience exciting and entertaining for the 12.8m customers who visited us this year.

Our Governance Report includes an update on our Non-Executive team's oversight

of management strategy, including compliance with regulatory requirements, adherence to the UK Corporate Governance Code, effective risk management and representation of shareholder interests.

Key developments have addressed the Group's approach to culture, workforce and wider stakeholder engagement, as well as the Board's monitoring of the effectiveness of internal controls. The Governance Report also includes an update of the Group's Remuneration Policy.

A customer-centric,brand-led engagement approach

Delivering a more effective customer proposition and resilient business

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Opportunities

The Group is exposed to a number of advantageous dynamics that combine to present a range of organic growth drivers

Operating model

By bringing the Group brand operations through central technology platforms, Rank can better manage its interactions with customers, and provide a more intuitive and connected product experience whilst ensuring player safety

Regulatory changes, delivered through the Gambling Act Review, providing more appealing experiences in land-based casinos and bingo in the UK

Estate refurbishment and modernisation to attract customers and optimise our venues

Technology and data provides us with realtime player insights to improve customer interactions and optimise marketing initiatives

Resource efficiency and effectiveness, including Net Zero Plan realising long-term cost savings

Pipeline of exciting product development initiatives across engagement channels to broaden our customer base

Geographic expansion into existing and new territories

United Kingdom

Market-leading brands and high customer recognition

Talented teams focused on local markets

Appropriate safer gambling strategies to create sustainable customer relationships

Proprietary technology platform ownership

Progressive employee value proposition with strategically aligned compensation to attract and retain colleagues

UK land-based casino games

UK and Spanish land-based bingo games

UK and Spanish land-based slots and electronic games

Food and beverage in our UK and Spanish venues

Wider entertainment experiences in our UK and Spanish venues

UK and Spanish digital portfolio covering casino, bingo, slots and sports

Investors

Communities

Charitable funds raised

£323k

Suppliers

Supplier relationships

134

Environment

Absolute carbon emissions

22,112 tCO2e

Leveraging our brands to excite and to entertain

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The UK's largest multi-channel casino operator with 51 venues. The brand offers a range of casino table games, including roulette, blackjack, baccarat and poker as well as electronic roulette and gaming machines alongside bars, restaurants and broader entertainment experiences.

Mecca is Rank's community-gaming brand for the British market. A national portfolio of 52 venues offering bingo, gaming machines, great value food and drink and live entertainment.

Enracha is Rank's community-gaming business for the Spanish market. Nine venues offering a range of popular community games like bingo as well as electronic casino and slot games, sports betting, great value food and drink and live entertainment.

Our digital portfolio includes our established market leading brands, Mecca and Grosvenor for the UK market and Yo for the Spanish market. The Group also operates over 80 UK digital-onlybrands via our proprietary technology platform and third-partyplatforms.

The Rank Group Plc Annual Report 2024

Our global teams and delivery

To support the seamless delivery of our brands across our land-based and digital channels, the Group operates its technology development, delivery and operations teams in a number of strategic global locations.

UK Corporate

Venues leadership and support teams Venues product and customer support

Venues and technology support Digital customer support

Spain Corporate Venues leadership and support teams Venues product and customer support

Venues and technology support

Gibraltar Digital leadership and delivery

Digital product support

Rank's culture encourages colleagues to take ownership of their roles and promotes collaborative working to create supportive work environments.

Upholding our core values of Service, Teamwork, Ambition, Responsibility and Solutions ('STARS'), our colleagues are

empowered to play an active role in driving Rank's culture, influencing organisational

behaviours, decision-making processes and interpersonal dynamics, everything which impacts the Group's performance, strategic ambitions, sustainable growth and

profitability.

Our values

Service

Total colleagues

7,600

Venues colleagues

6,400

Digital colleagues

500

Technology colleagues

300

Corporate colleagues

400

Mauritius Technology and customer support Group operational support

South Africa Technology

development

We start with the customer. We do everything in our power to deliver special service every time.

Teamwork

We pull together across brands, channels and locations to perform at our very best.

Ambition

We challenge the way we do things and explore new ways to excite and entertain our customers, and outshine the competition.

Responsibility

We understand our responsibility to all of our communities. We act with the highest integrity and honesty in everything we do.

Solutions

We act positively to get to the heart of problems quickly and find ways to solve them.

MARKET REVIEW

Evolving customer and industry dynamics The drivers impacting the Group underpin the potential for an improving cash generation profile

10

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Macro trends

Venues

Grosvenor, Blackpool

Digital

The industry landscape in the UK and Spain

Regulatory pressures, changing consumer habits and the economic impact of inflation have all had an impact on the industry, with the potential for further market consolidation. We believe Rank remains well positioned to manage the risks arising from these changes and will seek to benefit from the opportunities they present.

Regulation

Regulation is central to our industry landscape, with the changing interpretation

of regulations by the UK Gambling

Commission putting pressure on operators

in the market. Our wealth of industry

experience means we have strong processes and proprietary technology solutions in place to support our business. We have a good working relationship with regulators and welcome the much-neededland-based reforms.

Customer behaviours Customer behaviours are constantly changing but venues continue to play a huge role in differentiating our offer in the market. Since the pandemic, we have seen a lasting impact on some of our customers,

particularly in older customer segments in our Mecca venues, but we still enjoy strong customer loyalty. We are using customer insights to understand how we can deliver exciting and distinctive experiences that are engaging, safe and represent value for money. We continue to develop new games and formats, build our digital capability and

scale, and evolve the customer offer at our venues.

Economic pressures

Economic pressures are a key factor for the industry with higher costs of operation (employment costs, utilities, supplies). We are able to manage our input costs due to our large scale, and to allocate resources across the estate to better meet customer demand.

Land-based casinos

In the UK there are currently 117 operating casinos. In total, 149 licences are in use, as some casino venues operate through more than one licence. There are an additional 28

licences held across UK operators which are

not currently in use.

The UK casino market has strict regulatory requirements which limit the number and movement of casino licences in the UK, thereby creating high barriers to entry.

The UK casino market has been constrained

by the number of gaming machines

permitted per licence, with the maximum number limited to 20.

Globally, there is growing customer demand for gaming machines and the UK Gambling Act Review provides a once-in-a-generation opportunity to extend the appeal of casinos and to modernise our electronic offering, enabling the UK land-basedcasino sector to better meet the needs and expectations of customers.

For further details regarding the Gambling Act Review see page 11.

UK land-based bingo

The UK bingo market is heavily consolidated with the top three operators holding 63% of the 248 operating bingo venues.

The bingo market has been in decline for a

number of years so there is a need to evolve

and create more accessible, modern and

lively venues with strong bingo prize boards,

a compelling gaming machine offer, good value food and drink and live entertainment.

The mix of gaming machines is currently constrained by outdated legislation which will be improved subject to the Government implementing the Gambling Act Review.

Spanish land-based bingo The Spanish bingo market is very fragmented with 323 bingo venues.

Bingo has declined in Spain in recent years against a backdrop of growth in slot arcades and sports betting.

With this decline in bingo, the stronger venues with more attractive prize boards

attract bigger audiences, which in turn

delivers higher prizes. The stronger

bingo venues have also broadened their

product range by including electronic

roulette, bingo and other slot games, sports betting, good value food and drink and live entertainment.

The UK's digital gambling market is fast moving, competitive and subject to strict regulation, but remains structurally attractive with clear headroom for growth over the coming years.

UK digital bingo

Customers are looking for a safe, secure and intuitive gaming experience, with more

chances to win and easy pay-outs when they

do. Customers want personalisation and more variety, from promotions that cater for a wider range of budgets, to the games and features available. The experience needs to be increasingly meeting the needs and expectations of the customer in real-time.

UK digital casinos

Customers want exciting and entertaining experiences, as well as great-looking sites that offer the latest games and strong promotions. They prefer sites that provide tools to help them control their spend and reward loyalty. They are looking for opportunities to have fun, at times the opportunity to win big, with rapid payment of winnings.

International digital

Similar to the UK market, the Spanish digital

market is very competitive and subject to

strict regulation. The online bingo market is the smallest sector, with only a few well known brands of which Yo Bingo is the largest. The online casino and sports betting markets continue to grow quickly with a wide range of competing brands providing opportunities for newer entrants to compete effectively and to grow market share.