The Rank Group Plc

Good morning all. Thank you to every joining online and a warm welcome to everyone that's here with us today. It is of course my first set of results as Chief Executive and I'm grateful to our board, our major shareholder for their support and for this opportunity. Rank is a great business and I'm delighted to share with you the story of another year of strong performance. To set out in a bit more detail how I see the opportunities for the group and why I think we're really well positioned for future success. I'm also delighted to be joined for the first time by Cliff Basie, our interim CFO. I'm gonna start with the key highlights for the year before handing over to Cliff for the financial review. So once again, there was strong revenue and underlying profit growth in the year. It was great to see all businesses contributing to improvement and that's despite some headwinds. During the year, we took decisive action to mitigate the impact of higher RGD on our UK digital-facing business. And the performance in digital was therefore encouraging at plus 12% in Q4, particularly given the material reductions in above-the-line marketing. We started the new financial year in a similar fashion, so that's pleasing to. From August of 2025, we started to increase the number of gaming machines in Grosvenor, and as planned we increased machine numbers by 65% before Christmas with any modest in-year capital expenditure. The momentum is building with the initial step up in performance continuing to improve through the year and strengthening further in the early weeks of the new financial year. The trajectory is positive and provides a strong platform on which to build. but it requires further optimisation before we need to make any further capital investment. So the focus is on maximising the productivity of our machines and there are lots of actions underway in that regard that I'll come on to later. Over the last six months we've been through an estate segmentation exercise in each of our venue businesses and off the back of that we have taken some necessary but difficult decisions. and that included the closure of nine Mecca sites in the year. On the other hand, in Grosvenor we're trialling a smaller format casino proposition that could provide an attractive investment opportunity. It's about ensuring we have high quality, high returns venues estates for the future. We've also continued to evolve the strategy over the last few months and as a result we're clear about how we create value. We're also clear on where we can win in casino-led and bingo-led gaming, and importantly, about why we can win. More from me on that later. And for now, let me pass over to Cliff, who will take you through the financial performance.

Thanks, Richard, and good morning, everyone. Pleasure to be here presenting the four-year results. I'm going to talk briefly through the financial highlights, operating profit growth, and then cash flow, CapEx, and capital allocation. This slide illustrates some of the financial highlights from a strong year for the business. Like-for-like net gaming revenue was up 6% at $834 million, with growth across all our businesses. Good cost control meant that resulted in an operating profit of $78.6 million, up 21%, and that includes one quarter's impact of remote gaming duty in our UK-facing digital business. That strong result flows through to improvements in underlying EPS and return on capital employed. Given this performance, the group has proposed a final year dividend of 2.5p per share, giving a total full year dividend of 3.5p per share, a 35% increase over prior year. Just walking through the key items in the profit bridge, starting from last year's 64.8 million, revenue growth, which is revenue less direct cost was 24.5 million. As mentioned, we started paying 40% RGD from the 1st of April, which was a 10.1 million impact. However, the UK digital business took mitigating actions, which resulted in 8.1 million of savings from reduced above-the-line marketing, staff and supplier costs. Depreciation increased 4.6 million as a result of prior year's CapEx investment. Minimum wage rises and the knock-on impact across our UK estate meant underlying salary and wage costs increased. However, we were able to mitigate this through staff costs and other savings, giving an overall cost increase of 2.8 million. And finally, we launched Online Bingo in Portugal in March, which led to a net P&L cost of 1.3 million due to the initial startup costs and the marketing investment. Overall, this gives an operating profit of 78.6 million with an increase in operating margin from 8.1% to 9.4%. We did incur some exceptional costs during the year, and we've previously separately disclosed the Spanish fraud and the regulatory settlement items. Other significant costs represent the management actions we've taken to strengthen the business. As Richard mentioned, this includes the closure of eight Mecca clubs in early June, and one in the first half of the year. These clubs were either loss-making or not commercially viable, so we took the difficult decision to close. I'm pleased we've seen a positive transfer from customers and some of these clubs to other Mecca venues nearby where that has been geographically possible. These closures are part of the venue segmentation work we performed, as Richard again referenced, which will help drive future investment decisions across the estate. The restructuring costs relate to the staff reduction actions taken in response to the staff of the RGD, and whilst these decisions are always difficult, we will continue to look for efficiencies across the business so we can tightly manage the underlying cost base. Venture cash flow. Net free cash flow was 25.5 million. This reflects CapEx of 50.2 million, which was at the lower end of our FY26 estimates, together with lease payments of 48.3 million. Those lease payments have increased over prior year due mainly to the increased machine estate rollout. Interest and tax costs were 8.6 million, offset by a working capital inflow of 4.6 million. The table in the top right shows the year end cash position with the cash inflows of 25.5 million together with dividend payments of 13.8 million which left the group with a net cash balance of 56.8 million at the year end. Adjusting for the IFRS 16 leases of 204 million this gives an accounting net debt figure of 147.2 million. It's worth noting we also refinanced our debt facilities in June with a new four year 120 million RCF facility on improved commercial terms. This puts our balance sheet in a healthy position going forward. As previously mentioned, FY26 CapEx was 50.2 million, down from 58.5 in FY25. Looking at the split across the businesses, Grosvenor included general maintenance and upkeep spend, as well as refurbishments at Brighton and Bolton, introduction of sports betting areas at Reading and Leicester, together with the works required for the additional machine rollout across the estate. In Mecca, spend included our new 1825 social lounge at Stockton, a significant investment in the modernisation of Bingo, which is opening very shortly and was actually highlighted in the opening video. Other spend includes upgrades to our gaming machine areas in Thanet, Romford, Acox Green, Gateshead and Swansea, as well as external signage at 11 venues. Digital capex was 10.8 million, and comprises mostly the capitalised internal headcount of our IT development teams. The reduction in spend from FY25 reflects a lowering from the more elevated CAPEX levels of recent years when we were addressing significant maintenance backlog as well as investing in the venues of state, especially the BIC renovation. Going forward, we will take a disciplined approach to CAPEX, spending what was required to maintain a high-quality estate and only investing in high-returning development projects. This approach also feels prudent given the recent change to RGD and the current discussions around the industry. We would estimate FY27 capex will be around 40 million with the bulk of the reduction being in the Grosvenor business. These reduced spend levels will significantly improve the group's underlying cash generation. While mentioning FY27 I will just point out that in the appendix we do have slides which give forecasts for our interest and taxation forecasts for next year. The bottom of the slide illustrates the strong growth we've seen in return on capital employed over recent years, from 4% three years ago to over 18% now. Whilst the full year of RGD will have an impact in FY27, we'd expect to continue to see strong returns in the future. And given the improvements in underlying cash flow, as mentioned, I thought it would be worth quickly reiterating the Group's capital allocation policy Maintain balance sheet strengths, discipline capital investment, pay a progressive dividend that grows to over 35% payout ratio, worth noting our FY26 dividend of 3.5p per share represents a 33% ratio. We will consider inorganic growth opportunities, but only where they help us achieve our strategic aims and meet strict financial criteria. Otherwise, we will return surplus cash to shareholders. Thank you very much. I'll hand back to Richard.

Thank you, Cliff. You did a much better job of that than your predecessor used to. In all seriousness, moving across to my new role as Group CEO has been an appropriate time to review the lessons learned over the last few years, including what's worked well and what needs to improve. The great thing, from my perspective, is we believe there are lots of things that we're doing right. And that's coming through in customer response, the colleague engagement scores, and of course in the financial performance. It's therefore about fine tuning how we execute our growth plan from a position of strength. I describe it as a positive evolution of strategy in how we create value. The group's purpose to excite and to entertain our customers remains unchanged. and I'll talk in a moment about how that purpose is implemented across all of our businesses. We believe we have a clear right to win in casino-led and bingo-led gaming. We've got deep expertise in our casino and bingo businesses. We do it better than the competition. There are areas of core competence and we'll create strategic value by doubling down in those areas. There are clear growth drivers in casino venues, in digital, and in our bingo venues and we're well placed to capitalise on the existing and growing customer preference for gaming machines and in a broader sense electronic play. Finally, the group adds value in a number of ways through the development of talent and strategic capabilities in data and analytics supporting the plans to provide more personalised experiences where the potential is vast. and increasingly in the application of technology to help serve customer needs. I'll talk you through some of the key parts of that plan today. So starting with purpose. We apply the group's purpose to excite and to entertain through a common customer experience vision for all of our businesses. Importantly, the aim is to offer more localised, more segmented and more personalised experiences. But in order to do that, we need every customer to be known, valued, safe and most importantly entertained. That's regardless of whether the customer plays in venue or online, in casino or bingo, in the UK, Spain or Portugal. So the vision for the customer experience is consistent and we implement that well in some places today but we've got a great opportunity to do it much better across the group in future. Moving into casino and bingo-led gaming. To reiterate, we believe we have a genuine competitive strength, expertise and significant early potential in these areas. In Grosvenor Casinos, with a market leader in land-based with around 40% market share, a position that's grown in recent times. The venue segmentation work gives us a clear framework for a commercial strategy and for investment across the estate including the trial of a new small format high productivity electronic led casino. Revenues in Grosvenor are resilient, improving and there are clear growth drivers. There are high barriers to entry through the licensing model And our casino heritage, that genuine casino authenticity, is a key point of differentiation online. People come to us for live casino offering, which is particularly important with RGD at that higher rate. Moving to bingo, but simply, bingo is in the DNA of the bank group. We love bingo. I love bingo. We're proud of it and we're passionate about it. It's great value. community-based entertainment. We've got a strong Enracha estate of nine well-located venues in Spain and have remodeled the shape of the Mecca estate to focus on the higher quality, higher return venues that generate strong liquidity, which is critical to the bingo game. Liquidity is genuinely king. It drives the price boards that customers pay for and the price they pay. and the same applies online. It's exceptionally hard to replicate the liquidity gain in the unlicensed market and we're well positioned online, particularly given the changing nature of the industry with a highly loyal customer base. So we're clear where we can win, but also why we can win, which is on the bottom half of the slide. We've got well loved brands in attractive markets a compelling customer proposition that is delivered by highly skilled and highly engaged colleagues. We've got clear growth drivers, well understood by everyone across the group, and a significant opportunity to grow through investment in the cross channel proposition. We're reviewing the implementation of that strategy through two parallel components. On the one hand, we're focused on delivering the 100 million plus operating profit ambition that you're all familiar with. And that's the deliver part of the chart. But we're also thinking about how we build a business for longer term value creation. And that's the deploy part of the strategy. One doesn't lead to another, they run in parallel, and we need them both to fully realise their ambitions. In deliver, it's about maximising the value of existing assets, We've got a laser focus on performance, using data and insights to drive growth, and utilising technology to improve customer propositions. That will result in revenue growth, but also higher margins, higher returns, and improved cash generation. In Deploy, it's about selectively deploying capital to build scale in the areas we know we can win, and where we're confident of secure and strong returns. I've already said that that's casino-led and bingo-led gaming. The smaller format electronic-led casinos are a good example of where we'll invest, as are our investments in social gaming lounges in both Mecca and in Rapture. We'll also look to grow our international revenue streams to provide greater diversification. Both in Rapture and Yo, two bingo-led businesses in Spain have operating margins above 25%. are two really productive businesses, but they account for less than 10% of group revenues. We want international to be a bigger proportion of the group in future, and Portugal is where we're focusing our attention to start with. It was great to launch our Bingo product there towards the end of the year. Just to reiterate, deliver and deploy are in parallel rather than sequential, and we need both to fully realise our ambitions. So getting into the drivers of growth in each of the businesses. We talked about the playbook for success in Grosvenor in the capital market today in October 2025. The key components of that are shown here. We've got high quality segmented estate and in each of those segments we have a clear commercial plan, a clear investment plan and a model of the returns that we expect. We've improved the quality of our club environment significantly over the last few years. There's still some work to do, but the estate is increasingly better shape. And we'll continue to invest in that estate going forward. A targeted approach that utilises that venue segmentation. But it also recognises we've delivered higher returns where we've focused on more targeted schemes that have the most direct impact on the customer. In hospitality businesses, people are key and in Grosvenor we've got over 4,000 highly skilled colleagues. The From Like to Love cultural change programme that we introduced a few years ago has had a material impact. We've got some of the best engagement scores in the hospitality sector, which given the 24-7 nature of our operation is a fantastic result. We offer unrivalled products and service. First class table gaming, The best and most innovative electronic gaming in the UK A much improved slots proposition with breadth of choice for the customer We can now offer sports betting and already have sports betting terminals in 24 casinos We're learning plenty there as sports broadens the proposition of our venues We've got a tailored F&B offer and we're the market leader in poker in the UK On which note, we held our annual Goliath poker event in Coventry Casino a couple of weeks ago. Cliff and I both went along for some of it. That was to watch rather than play, unfortunately. And it was a fantastic success, with 15,000 customers competing for a prize pool of 2.2 million. It's the biggest poker event of its kind outside of Vegas, and we're very proud of it. Most importantly, customers love it too. Finally, we continue to make progress with a cross-channel proposition, which is a point of difference in the market and can be a catalyst for further growth through retention and deeper customer relationships. There's a big opportunity in that regard. Moving into growth and performance for the year, where we've made continued progress again. Revenues are up 5%, with gaming machines the fastest growing product vertical. Table gaming performance was flat, a tale of two halves. Revenue was up 2% in the first half, but down in H2 due to the Middle East conflict and the consequential reduced travel from that region. As I mentioned earlier, we plan to try the smaller format casino this year using some of our dormant licences. Gaming machines were an important driver of growth in FY26. And as you can see from the chart, slots performance improved as the year progressed. And that improvement has continued into the new financial year. We've grown machine numbers by 850, or around 65%. And after the initial step up in revenues, we're very focused on optimising the performance of the machine estate before making further capital investments. Our experience from adding machines into venues in the past tells us it takes around two to three years to get to maturity. We've learnt that customers like the increased breadth of choice in the machine estate, but there are probably four or five machine suppliers that we'll work most closely with in the next few years in order to maximise performance. Service definitely matters for our slots customers. Knowing their drink of choice, their favourite game and helping them with offers and so on are an important part of the slots experience. We're investing in training, a mystery customer programme with a specific focus on slots areas. We're also investing in a new loyalty and rewards programme direct to the machines in the first half of the new year. It's clear that data and insights has to drive decision making and performance improvement. We're going to increase machine allocations to venues when the utilisation rates demand it and where the capital returns are strong. Growth will come from a combination of increasing the customer base and increasing share of wallets from existing customers that may also play elsewhere. We offer a really attractive slots proposition in our venues now and we expect to move from 2 million slots revenue per week from prior to land base reforms to over 3 million per week in the next two to three years. On to building scale and digital. I think it's fair to say the UK digital landscape is experiencing a seismic shift with the increase in RGD to 40%. With that in mind, ensuring you have a clear framework for acquiring, entertaining, entertaining customers is key. And for us, that's join, play, stay. Join is about acquiring customers as efficiently as possible. If we do that well, marketing expenses as a percentage of revenue will decline as our acquisition programmes become more effective. Play is about giving customers the best possible proposition, the most fun, in order to deepen engagement. And to that end, we've protected free bets, incentives and continued to focus on improving customer journeys improving the customer proposition in all of our digital channels. If we do this well, customer player day should materially increase. And stay is obviously about retention, building loyalty and improving customer lifetime value. That's the commercial model that we've implemented that gives us the best possible chance of success in a higher tax world. So in that context, digital performance is pleasing. Revenues grew by 12% in the final quarter, the first quarter with higher RGD, and by 8% for the full year. We took decisive action to mitigate the impact of higher taxes, reducing above the line marketing significantly, more than most operators, because we have the advantage of well-known brands. We did dial up performance marketing modestly, and that's supported performance and is delivering strong returns. We renegotiated supplier contracts and also reduced headcount in the UK digital business. They were the necessary actions to ensure we had a viable business going forward. But as I mentioned, we have continued to invest in the customer proposition and that's also key to having a vibrant digital business in the UK going forward. Moving to performance in Spain where we grew by 7% in the year. Much improved where we finished the last previous financial year and the start of FY26 when the business was in slight decline. YoBingo performance was pleasing and YoSports growth was particularly strong. We've taken some of the community aspects we have in Bingo and are applying them to the sports site which gives us a point of differentiation against the much bigger operators. broadly maintaining margins in digital given the tax impact in Q4 was pleasing. But digital profitability will inevitably reset in the year ahead. Moving to bingo. The plan remains to maximise medium-term cash generation in our bingo venues. This slide illustrates the model. We've got strong brands in both Mecca and in Rapture. A vibrant bingo game is key. that's how you attract customers it's their primary reason for visiting and those customers generally speaking are very loyal the community aspect is also important there's a deep loyalty to our brands and a strong association to colleagues and other customers from a financial perspective gaming machines and electronic tablets are the productive assets to help drive overall product profitability And good quality data, which continues to improve through the loyalty card in Enrapture and through the Mecca app, is important to driving growth. In the year, both Mecca and Enrapture delivered solid performance. NGR growth in both was driven by a combination of strong bingo proposition. Remember, that's the primary reason for visit. That's why people come. Plus, strong gaming machine growth on top. We've made targeted investments in each business, particularly in the gaming machine areas, but also in social bingo lounges. The first of those, Bingo Boom, opened in Seville in April, and the investment in the 1825 lounge in Mecca Stockton that you saw in the video completed only last week. Off the back of the venue segmentation, we did close nine Mecca venues, and that leaves us with a higher quality Mecca estate that we're happy to invest in. The Enratra estate remains well invested and in very strong shape. Colleague engagement and customer MPS is also strong across both businesses. I've mentioned already that slots and electronic gaming are the economic growth engine for all of our venues businesses. Slots accounts for around 44% of group revenues. electronic terminals account for around 16% of grown revenues and tablet-based play in Mecca now accounts for around 80% of bingo revenues The important point is that customers like playing electronically even if they're in physical venues It's part of the broader trend that you see across hospitality businesses with customers increasingly interacting with physical locations through digital devices It's convenient, it's interactive, and it's what customers demand. We continue to improve the proposition in these areas in order to capitalise on the growth opportunity and shift in how customers are behaving in hospitality venues like ours. Slots and electronic gaming are also our most productive assets. We utilise space efficiently and generate strong returns. part of our increased focus with deepening relationships with suppliers to ensure we continue to develop the proposition and lead the way on innovation in our sectors. In that context, it would be remiss of me not to mention Machine Gaming Duty. It's currently charged at 20% of revenue generated on gaming machines in both casinos and bingo halls. And as you've heard, gaming machines are an important component of our venue profitability. Any increase in MGD puts pressure on the viability of venues. You can see on the slide the impact of wage inflation and higher taxation on the number of MECA venues and MECA colleagues over time. Unfortunately, any increase in MGD leads to fewer venues, lower employment and reduced tax receipts within 12 months. We've started to make these arguments publicly and we made them last year as well. We'll continue to showcase our clubs that support jobs, provide customers with enjoyable experiences that means they come back week in, week out and generate significant tax and duty receipts. We're very proud of what we offer in towns and cities across the country is that genuine community assets. Moving on to current trading, I'm pleased to say that the strong momentum has continued into the first six weeks of the new financial year. Revenues are up 8% with gaming machines in Grosvenor having grown 15% and digital revenues have grown by 10%. As you've heard, digital profitability was inevitably reset in 26-27 and that's despite the mitigating actions we've already taken. but we are well placed to deliver market expectations for the new financial year. Finally, I also expect that momentum to translate into further strategic progress. The strategy is focused on those areas where we can win, casino-led and bingo-led gaming. An underlying performance momentum is good across the group. There are clear growth drivers in each of our businesses and plenty of runway ahead of us. We've got a strong balance sheet, as Cliff mentioned, and that allows us to continue to invest in order to capitalise on these growth opportunities. We're on track to deliver at least 100 million of operating profit in the medium term, and across the group, there is a clear focus on creating long-term, sustainable shareholder value. Right, thank you for listening. There's now an opportunity for questions. We will start with questions from the room before moving online. We've got a keen audience member here. And before you ask your question, please state your name and where you work.

Thank you. Good morning. Ivor Jones from Peel Hunt. Richard, can you talk about how the route to 100 million might have changed over the course of the last year, if it has changed? Obviously, you talked about a reduction in capex relative to what we might have been expecting.

I think in the last 12 months it's probably changed in two ways. The first was obviously when you've got a resetting of digital profitability off the back of higher RGD. That inevitably means that the digital component of our 100 million is lower. I think it's fair to say that there was probably an expectation we'd be able to go well beyond that 100 million so still feel confident we can get there. I think from a Grosvenor perspective we've got capacity for another 650 machines. We've put 850 in already, another 650 go. I would think of that as the kind of full capacity for the business. We're going to invest in, so the extra 650 machines requires about 25 to 27 million pounds worth of capex. So we only want to push the button on that additional capex when we're confident we've got the best returns that we possibly can out of the existing machine stake. and then when we're going to add them in to the estate, we're going to get the return from that investment. So will we add more machines in the year ahead? Absolutely. But do I think it's about maximising the performance from the existing machine estate at first? Yes. The final bit, Mecca is probably going to be off the back of the abolition of Bingo GT. Mecca plays a slightly larger part in that 100 million as well.

Just to be clear, are you saying that the 100 million requires the next cohort of, the full next cohort of machines?

Yes. So I don't think the material number of additional machines is required for us to hit 100 million operating profit now.

Beyond the ones you've already installed?

Not materially.

Okay, thank you. You talked about the small casino format. What is it? What does it cost?

So a small format casino is a result of the venue segmentation work that we've done over the course of the last six months or so. We've done that in each of our businesses. In Grosvenor, I think it's kind of clear when you segment the venues we've got some very strong flagship venues where we're going to have 80 gaming machines full proposition across table gaming electronic roulette slot machines poker great F&B all of that but there is a component of our existing estate which just lends itself to a smaller footprint higher productivity offer so less prominent table gaming prominent slots prominent electronic roulettes and a complementary F&B offer potentially with some sports terminals as well and we're trialling that in one of our existing venues at the moment and we think we can take that model and apply that to potentially use some of our additional dormant licences in new locations around the country we're going to learn the lessons from the venue that we've got in place already and then we'll look to trial in a few more locations over the course of the next year or so cost-wise. I estimate it around a million pounds per site. It's a relatively modest investment, smaller footprint than what you might be used to in terms of some of our larger casinos. Utilizes electronic gaming predominantly, lower staff intensities, operating margins. I would hope we can get them up to around 20%.

A million pounds sounds more like a pub than a casino. Is that because you get to think about landlord contribution or a lot of the physical assets will be leased when you're talking about the million?

Yes, so definitely a smaller format. So we're not talking about anything that's gone more than perhaps six or eight thousand square feet. And again, the machine proposition, typically we have those on either leases or revenue share. We're not, this is not gold-plated stuff. I think a million pounds is reasonable. Might be a bit higher, might be a bit lower, but on average, feels reasonable.

And last one for the moment. We talked about the impact of increased RGD of 46 million, but the impact in the first quarter was 10. Is that because, or why is that? Something to do with seasonality I haven't thought about.

Yes, directly, yes. Well we only pay RGD actually on the sort of gaming side so and you proportionally pay on GGR so we are sort of working NGI items so if you do the maths based on where we're going to be you have to sort of take out the sports book gross up for the level of free bets and as Richard mentioned we haven't really cut down on the free bets because we have cut down slightly but we're still obviously we're engaging with customers so you get to 46 on that basis. But then why 10 and a quarter? That same basis basically because you've taken it based on GTR, the effect. This year. Well, sorry, there's an increase of 10 and a quarter to 35 is because we've actually got some revenue growth planned into that number. Thank you.

Hi, good morning. It's Roberta from Investec. First question for me. We're now four and a half months into the RGD increase, doubling basically. Did you see already any changes in the competitive environment, anybody getting out of the market, something that could give us hope that for the more established operators the impact is going to be somehow mitigated in terms of revenue in the future? That would be my first question if I can then add.

Yeah. where taxes go up around the world it's kind of relatively consistent what the kind of consequences are in different markets so taxes go up there tends to be quite significant reductions in above the line marketing as I mentioned earlier we've reduced our marketing above the line very significantly but we've probably done it less than other operators so some of the sportsbook operators partly because sports betting doesn't go up until next year partly because of the World Cup maintained levels of investment I would say and also there's some mid-tier operators out there that have remained particularly strong in terms of their levels of investment I think over time that's likely to still decline but so far we haven't really seen that on a material basis we've seen some smaller operators leave the market but I think we knew about them before the end of March really. I wouldn't say we've seen any further operators exit the market nor would I expect to really over the course of the first three or four months. But inevitably over time I think there is going to be consolidation in that market. Do I think we've benefited from players leaving the market so far in our sub-step? Not really.

Second question, you've talked about potential inorganic investment opportunities, of course, subject to the capital allocation in general. And then you also mentioned you expect over time to have more contribution from outside of the UK. Do you have, can you give us any idea of what you're looking for and what kind of hurdle rates and what geographies in case? or is it too early?

It's too early I mean I think with the health of the balance sheet that we have what's happened with RGD and the positioning of the business I think the logic of increased diversification outside the UK you know has obviously merit so we are keeping our eyes open we are based in a very very successful profitable business in Spain launching in Portugal so looking obviously to develop in those areas but we wouldn't want to be specific or even sort of constrain us necessarily in there but just to reiterate that if we do do anything it will have to hit some quite high financial hurdles and it will have to be part of our strategic basis and plan as we discussed.

Preference for organic? because there's obviously more execution risk with inorganic. I think any good business keeps its eye on opportunities that are in the market. We're a market leader in casino in the UK. We've got strong positions in bingo. It's logical that as part of the strategy you just kind of keep your eye on what's going on in the market and see if there's any opportunities that fit that strategic agenda.

Morning, Greg Johnson, Shore Capital. Just a couple of questions I was following on. In terms of digital, the sort of double-digit growth you're achieving, revenue growth in the UK post the RGD increase, it's probably surprised many with the strength there. Anything you should be sort of thinking about in terms of that slowing down in terms of kind of, I suppose, offshore operators taking share because it just feels a particularly strong performance and with that in mind obviously it was a strong profit performance in digital in the year What was Q4 like year on year just thinking about the first point of a post RGD increase? Secondly on CAPEX do you think the 40 million is now the sort of run rate for the business pre any sort of a further deployment that you've talked about in terms of the deliver and deploy and finally with the closures at MECA are we now there with sort of 40 odd sites as the at the optimal level.

Thank you. If I pass the CapEx question over to you Cliff and perhaps you want to talk about digital profitability in Q4 and I'll start with some of the other bits. So Mecca, I think that the current tax environment around 40 venues is about right. I'll be happy to invest in any of those 40 venues which is where we want to get to. As Cliff mentioned, the venues we've closed it's a difficult decision, right? Because you only get the close of any once. So you have to be absolutely certain that you're doing the right thing. But in those cases, over the next five years, I didn't see a path, or we didn't see a path to positive cash generation over the course of that next five-year time period. In most cases, they had quite significant property liabilities or lease events or something that made it quite difficult to see cash generation being particularly strong in that five-year time period. So it's a tough decision to make. don't take it lightly, but it was the right thing to do for Mecca. It's the right thing to do for the medium term. And yeah, about around 40 on current tax regime is about right. On digital performance, I don't think we're the only one performing particularly well in RQ4. And some of our competitors have reported results recently in the UK gaming space that we're doing relatively well in that context, but we're not the only ones that are showing good levels of growth. What's it down to? I think it's hard to say that the above-the-line marketing spend has had a material, you know, the reductions in above-the-line marketing spend will have had any material impact yet. I think that's likely to play out over longer periods of time. So we are conscious of that. We're monitoring that. We've got lots of customer research that we do to kind of make sure that we're not tying too many hands behind our back in that regard. So I'm pleased with performance in Q4. Do I necessarily say that it's going to give me a huge confidence we can do double digit growth for the next few years? Well, I'm confident internally, but we just have to kind of monitor how the market performance manifests itself. In terms of the black market piece, again, the data on it in a short period of time is relatively limited, so I can't say for definite. Intuitively, it feels like over time. the unlicensed market will inevitably increase because the customer proposition they can offer is just better. If you're not paying tax, haven't got safer gambling schemes, you can offer a better proposition to the customer.

Yeah, just finishing up on digital. I mean, it was obviously great to have 10 million additional RGD costs coming through there. We had done the mitigations and I think importantly, as Richard mentioned, we decided to sort of invest in marketing as well so that slightly so we did well in the period so actually yeah profitability was probably ahead of where we expected because of the stronger top line but we took the opportunity to invest in performance marketing as we've continued sort of to do so I'm not going to give a figure the main thing to think about really is for next year mentioned 35 million of additional RGD and we think our mitigations together with roughly while we're planning on the marketing levels would lead to about a 15 million decrease in profitability. So we can mitigate about 20 million of that 35 million for next year. Coming back to CapEx, yeah, it's not a sort of one-off lens in terms of the review of CapEx and what we want to spend. I mean, we have a strong balance sheet, so if opportunities come up, organic opportunities, et cetera, we're gonna assess them on their own merits. But yes, we would look to keep this view and lens on the business, so 40 million is not an unreasonable, 40 million or thereabouts is not an unreasonable sort of going forwards, obviously, and give you more precise guidance as we move through, but that would be correct.

Just wrapping up on that, so we should think of the 40 million capex within the context of the 100 million profit ambition. Correct.

Correct, yeah.

Brilliant, and that brings us to questions online. We've got four questions, three from Richard Stuber at Deutsche Bank and two from David Brohan at Goodbody. The first three from Richard Stuber. The first one reads, have tourists from the Middle East and Far East returned to more normalised levels since the start of the war in Iran? If not, how much of this has been a drag on FY26 financials? The second question, digital continues to be very strong, up 10% in current trading. How much of the recent growth is from converting land-based customers and how much is from newly acquired customers? Can you split revenue by activities and ARPU? The third question, Portugal was 1.8 million startup headwind. How long will it take you to break even and what are your medium-term profit expectations?

Great. So Middle East, definitely an impact on performance in the second half of the last financial year, FY26. So as I mentioned in the presentation, table gaming was up 2% in the first half and it was flat for the full year. So you can kind of probably work out the benefit from that, the impact from that. I'd say on a weekly basis in Q4, probably hampered us by around 150 to 200,000 pounds a week. The longer the kind of conflict goes on though, I think the more likely customers are to return to more typical plans. at the start of that fourth quarter there were flight paths that were closed for part of it some flights weren't running etc so that has got a direct impact on how customers behave as things kind of tend back to a bit more normality I think customers just want to get back to their normal ways of operating so I'm kind of optimistic with early signs of how that's the Middle East performance has been over the course of the summer trading period I think you can see that in the growth in numbers you can see that in our plus eight revenue growth for the six weeks I think we probably benefit from some other parts of Europe being particularly hot so I think we all think London's been hot but I think other parts of Europe are being particularly hot and some of those Middle Eastern customers are coming to escape the heat when they come to Europe so I think the summer period we can look forward with a relatively decent outlook. On Portugal if I take Portugal and I'll come back to you on the ARPUs and digital cliff so Portugal yeah I think as Cliff mentioned 1.3 million loss in the last financial year, I'd expect to be loss making again in the year that we're in, with a view to then being positive cash generation in FY28. Key thing is that we're building liquidity. So we're the only online bingo operator. So bingo is understood by Portuguese customers, but we're establishing liquidity from scratch. and as I mentioned earlier liquidity is king. You need to get to a level of liquidity that allows you to offer an attractive price board at attractive prices. That's the critical bit and we're in the investment phase to try and get to that point.

Yeah I think the question on digital was a little bit on the 10% growth and where that's coming from. Is it from sort of cross-sell from our land-based clubs or is it obviously new customers? I think Predominantly, it is new customers. We have the advantage of our land-based clubs, which really helps the brand, especially with the sort of decision to pair back on above the line. So having such established brands as Mecca and Grosvenor is a real plus for us to be able to sort of do that. We need to work out exactly what we do in the future around sort of above the lines. so we do get the benefit of that so clearly we do get some customers coming in and especially with some of the technology developments we're putting in to be able to communicate with customers digitally who are in venue that gives us a real competitive advantage but no most of this growth is from customers new customers coming through us through the performance marketing investments that we've been talking about but we do plan to aggressively as I said with the technology make sure that we leverage our estate as best we can especially with 40% RGD it would be remiss of us not to do that in terms of ARPUs I won't give out exact ARPUs what I will say is the pleased with the size and scale of the player base that's certainly been you can't get these growth in revenues without having a solid player base and a very good level of activity on the site so we're happy with that

Thank you very much. And the final online question comes from David Bruhan. It reads, what is your view on the decision this week to scrap the AIM to Permit policy? And what are your initial perspectives on the new government's views on the gambling industry?

Crikey, where to start? Let's start with AIM to Permit. That's a really safer territory. AIM to Permit didn't impact our casinos and bingo halls. So if we want to move a casino license, if we want to relocate a casino, if we want to utilize an existing casino license to open a new venue, we always have to go through a planning permission process. So that doesn't change off the back of the proposals around aim to permit. And we're not really in a position where we're looking to open new bingo halls. So for existing licenses, existing venues, it doesn't have any impact. if we want to move a license in Grosvenor then there's already well established processes there so not a material impact from our perspective it predominantly impacts on AGCs and betting shops more than it would do for us. Kind of broader sentiment around gambling I think we're proud of what we do. We think our venues are at the heart of the towns and cities across the country in which we operate. We think they're community assets. They provide a high level of gambling supervision. We try and look after our customers really, really well. That's the game that we're in. And we'll continue to offer them the best entertainment, the best fun that we possibly can. There's not much I can do about the kind of external factors. But I think what you should understand from our perspective is that we're trying to provide the best proposition, the best enjoyment in the most safe environments. And we'll continue to do that. Also go to that saying, I think that whatever the external factors, which we've kind of got used to over the last few years, they come and hit businesses now. We've just got to get used to operating in that environment. You're not going to change that. So from our perspective, we are very focused on managing through difficult external environments. I've got Thank you very much.

Did you call them social gaming lounges in Mecca and in Ratcha and what are they? I remember Rank used to talk about electronic gaming lounges.

Social gaming lounges, so the traditional main bingo hall, because you're playing bingo live and somebody's calling the number everyone likes it to be relatively quiet so they can hear the number being called make sure they're on track for their card. A social bingo lounge has got a much more energetic upbeat environment I suppose it can be noisy people are talking what this typically Sky Sports on in the background so this is a place where you can carry on playing bingo but in a much more social way talk to your friends talk to your family all that kind of stuff whereas the main halls typically in most sessions tends to be eyes down, concentrate. They take it really seriously. We take it seriously too, but they take it super seriously. So this is just a, again, part of a broader hospitality trend, I would say. We want to offer customers different options within our venues.

And would a site still have a quiet bit and a double glazed bit for shouting?

It would not have to be shouted, but having fun.

Sports betting, is that going to be important or is that just interesting at the periphery of casinos?

I don't think it's going to be important anytime soon in terms of the materiality to our business performance but do I think it's kind of an important part of broadening the appeal of casinos to a broader audience? Yes. We've trialled a couple of venues where we've got dedicated sports lounges over the counter betting plus sports betting terminals and it's an interesting proposition particularly around big sporting events it gets a different audience into our casino in a way that also protects the integrity of table gaming. Because if you're playing table gaming and you've got people shouting at football at the same time, it doesn't necessarily lend itself to a great gaming experience. If you've got a separate lounge, separate dedicated area, that can be complementary to what we offer from the table gaming and electronic gaming.

Any sign it drives football for other activities in the casinos?

Generally good overlap with poker. So poker players tend to be sports bettors. So there's definitely a correlation there and an opportunity for some revenue uplift but like I said it's not going to be material.

And last one, can you just talk about why Rank runs with a net cash balance? Have I misremembered something about the amount of cash required for working capital? Why isn't this a levered business?

yeah I'm going to take that I mean well it's a policy but we do you're right we do have a requirement for working capital so you can see in our interest costs it's not all IFRS non-cash interest we have a facility an RCA facility and at certain times in the year we will need to dip into that because of the basically the volume of floats etc that's held across all our clubs but that's to reduce signals that we're generating more cash so you know as I say with the cash strong cash reduction from this year we will be well above that excess in terms of cash.

So should the group have net debt and a net debt ratio target?

I think that's up for us in terms of our views on balance sheets and comes back to sort of the capital allocation view but we will look at what we feel is most appropriate. Thank you.

Conscious of time because there's lots going on this morning. Thank you everybody. I think we're all done with questions online so we'll bring it to a close. Thank you for taking the time today. We'll finish there and wish you well. Thanks very much.