UK gamblers and investors have found it difficult to profitably navigate the UK gaming sector as it moves online. Rank Group is the UK market leader in ‘bricks and mortar’ casinos and bingo clubs. A new management team and increasing online presence suggest that the company offers investors favourable odds.

Rank Group’s three divisions are Mecca Bingo, Grosvenor Casinos and the Spanish bingo operator Enracha. The UK brands are a familiar sight in the UK and offer a different gaming experience to high street bookmakers like William Hill.

The venues offer a social night out and appeal to a broader demographic than the male dominated bookies. It is an experience that cannot be replicated online and, in the case of bingo, is able to attract an older demographic and women.

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Source: Rank Group investor presentation

Rank Group appointed Ian Burke as CEO in May 2014 with Mr Burke previously having been the CEO of William Hill Online. Before that he was the CEO of Leisure & Gaming plc, which owned online and retail gaming businesses.

This backdrop should enable Rank to grow its online gaming business and shore up its ‘bricks and mortar operations’. However, with a range of competing leisure opportunities it is critical that Rank’s brands remain appealing.

Rank Group’s objective is to be “the UK’s leading multi-channel gaming operator” through a 5-pronged strategy. This includes building a digital capability and to invest in technology to improve the customer experience and drive efficiency.

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Rank Group profile: Casinos and Bingo venues

Grosvenor is the largest Casino operator in the UK with 58 of 154 Casino venues and the second largest player being Genting at 41 venues. Mecca is the second largest bingo operator with 90 venues versus Gala Bingo with 130 venues.

In the year to June 2015 and Grosvenor Casinos generated 57% of group revenue and 59% of operating profits before central costs. Mecca generated 39% of revenue and 38% of operating profit before central costs.

The Spanish business Enracha is only a small part of the group at 3.4% of last year’s revenue. The bulk of Rank’s revenue, at around 95%, therefore comes from the UK with only a small proportion generated in the Eurozone.

Rank Group year to June

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Source: Rank Group…

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