Rank Group Predicts FY Profit Increase Despite New UK Tax Rate

Rank Group has forecast improved full year underlying like-for-like (LFL) operating profit of at least £68 million for its financial year, which concludes at the end of June, despite the initial introduction of increased tax rates in the UK.

Rank confirmed the forecast in its Q3 2025/26 trading update, which showed the group’s LFL net gaming revenue (NGR) was £205.4 million for the quarter, up 5% year-on-year.

Modest increases were seen across the different divisions of the group, including Grosvenor venues, which reported a 5% NGR upturn to £95 million, while the digital division grew NGR 4% to £60.9 million.

UK mitigation

Rank’s UK digital division grew 2% for the quarter, and the group is already implementing mitigation measures to cope with the impact of increased taxation. From April, remote gaming duty (RGD), paid on online casino bets, from 21% of gross gaming yield (GGY) to 40%. From April 2027, there will also be a rise in general betting duty (GBD), from 15% of GGY to 25%; bets on horseracing will be exempt from this.

Mitigation factors against this have been implemented by Rank since April 1. Rank said it has made significant savings in above-the-line marketing spend, supplier costs and headcount reductions. Performance marketing spend and customer incentives have been protected.

Richard Harris, Rank Group’s Interim Chief Executive, said:

"It was pleasing to see continued revenue growth across all businesses and strong profit conversion in Q3, despite a tough macroeconomic backdrop. The results demonstrate the resilience of the business, the strength of the customer proposition and the growth initiatives we have in place.”

Rank is expecting to deliver further year-on-year revenue growth in Q4, and its underlying operating profit forecast takes into account energy cost volatility, which is not expected to have a material impact on profitability on 2025/26 or 2026/27. For 2024/25, Rank’s underlying LFL operating profit was £63.7 million, up from £46.3 million.

Harris said: "Having implemented the actions required to mitigate much of the impact of higher RGD in our UK digital business, and with clear plans in place to drive sustainable revenue growth, the group is well placed to deliver the medium-term objective of generating at least £100m operating profit."

The picture going forward

With the new RGD rate only overlapping with Rank’s Q4, it was never as likely to make a significant impact within Rank’s current financial year. However, whether Rank is able to report improved profit in its 2026/27 financial year, the first full year in which the new RGD will be in place and with the new GBD rate added in for next year’s Q4, will be telling.

Ahead of the tax increases being announced by Chancellor Rachel Reeves in November, then Rank Chief Executive John O’Reilly was quoted as saying the group was already “paying its fair share” after paying local authorities £188 million in taxes the year prior. Following the announcement of the changes, O’Reilly said the operator’s annual tax burden would increase by £40 million.

When exiting the position in January, O’Reilly said:

“The second half of the year will bring further cost headwinds, principally in our UK digital business, which will be impacted by the UK government's huge increase in tax rates.

"We have already executed measures to mitigate some of this impact, whilst continuing to prioritise customer experience, and the group will respond with agility as a heavily disrupted landscape takes shape in the UK.”