Rank : Annual Report and Accounts 2023

Contents

Overview

1 2023 highlights

6 Our business at a glance

Strategic report 12 Chair's letter

1. Chief Executive's review

1. Our business model

1. Our external environment

1. Our strategy

1. How we create long term value

1. Our key performance indicators

1. Our approach to ESG

1. CFO's review

1. Alternative Performance Measures

1. Risk management

1. Compliance statements

Governance report

1. Chair's introduction to governance

1. Governance at a glance
2. 2018 Code Compliance Statement
3. How we are governed

1. Our Board

1. A year in review

1. Our culture and workforce engagement
2. Senior management
3. Nominations Committee Report

1. Audit Committee Report

1. ESG & Safer Gambling Committee Report

1. Finance Committee Report

1. Remuneration Committee Report

1. Remuneration at a glance

1. Remuneration Policy

1. Annual Report on Remuneration

1. Directors' Report

1. Directors' Responsibilities

Financial statements

1. Independent auditor's report

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

1. Statements of changes in equity

1. Statements of cash flow
2. Notes to the financial statements

1. Five-yearreview
2. Shareholder information

Business highlights

• Like-for-like('LFL') underlying operating profit for the full year was £20.3m, in line with the upgraded guidance provided in April 2023, but down on the prior year of £42.5m.
• H2 profit performance was stronger than H1, with LFL underlying operating profit of £16.1m, compared with just £4.2m in H1.
• LFL underlying venues NGR grew 6% on the prior year, with good momentum continuing into Q1 2023/24.
• Underlying digital NGR grew 10% year-on-year with LFL underlying operating profit growing 7% to £18.8m.
• Despite revenue growth, underlying venues operating profit of £40.9m was down 27%, or £14.8m, on the prior year, reflecting significant cost increases, notably employment up £15.9m and energy up £5.4m.
• 70% of the Group's energy costs for
  2023/24 are fixed and we anticipate total energy costs for 2023/24 to be circa £20m, down from £28.6m in 2022/23.

• Group increased investment in colleague pay during the year, raising average pay by 10%, focused on lower salaried colleagues. 2023/24 employment costs are expected to will be circa 7% higher than 2022/23.
• Refinancing concluded with £100m
  of committed revolving credit facilities to November 2024, reducing to £75m through to February 2025.
• Our balance sheet strength enables continued investment in both the digital and venues businesses which positions the Group well for future growth, including from the UK Government's review of gambling legislation which will deliver important reforms for land-based bingo and casino venues.
• Good progress being made in the Group's ESG strategy with a net zero plan now in place and further improvements seen in the protection of our customers, the engagement of our colleagues and the role we play within local communities.

This report is complemented by our sustainability report.

For more information, see Our commitment to sustainability rank.com/en/sustainability.html

Catch up with our latest news and learn more about us on our corporate website: rank.com

Overview

Strategic report

Governance report

• LFL underlying operating profit of £20.3m declined 52% from £42.5m in 2021/22 predominantly due to underlying cost inflation.
• Statutory Group operating loss of £109.8m includes £118.9m of impairment charges, due to lower than expected performance in the year, and £7.7m
  of closure costs relating to 16 venues which were closed in the year.
• Net debt pre IFRS 16 at 30 June 2023 was £3.9m.
• Grosvenor venues LFL NGR grew 4% in the year. An NGR decline of 5% in H1 was followed by a growth of 15% in H2, as the business continued to improve the quality of its safer gambling measures and invest in its people, products and facilities.
• Grosvenor venues customer visits grew 7% on the prior year with customers continuing to return to casinos following the lockdowns of 2020 and 2021.
• Mecca venues LFL NGR grew 7%, with customer visit volumes up 4%, continuing the slow recovery from the impact of the pandemic, particularly on the older cohort of bingo customers who have been slowest to return.
• Mecca estate now more profitable and sustainable following the closure of
  15 Mecca clubs in the year, taking the Mecca estate to 56 venues.
• Enracha venues delivered very strong LFL NGR growth of 19%, on customer visit volumes up 16% against the prior year.

1 The Rank Group Plc

• Digital NGR grew 10% in the year following the successful completion of the migration of the Rank brands onto the proprietary technology platform and the subsequent transfer of development resource to the delivery of enhancements to customer journeys, services and products.
• Successful completion of Gambling Commission assessments in Mecca and Grosvenor, and a Gibraltar Commissioner assessment in the UK digital business. In respect of the Grosvenor assessment, the Gambling Commission has provided an early indication that it has seen a satisfactory outcome, and we are awaiting the formal written outcome.
• A strong transformation plan for each of the Group's businesses provides a three-year programme of headline growth initiatives centred on maximising the opportunities afforded by the UK Government's planned legislative reforms for land-based gambling and growing our Digital business both within the UK and internationally.
• Jon Martin appointed Chief Operating
  Officer in the year, taking responsibility for the development and delivery of the Group's cross-channelcustomer experience; Andrew Peat appointed UK Digital Managing Director, joining H1 2023/24.
• Following the year end, Mark Harper has joined the Group as Grosvenor Managing Director from 14 August 2023 and Keith Laslop has been appointed Non-Executive Director with effect from 1 September 2023.

Financial statements

Mecca Dagenham

Venue and digital improvements

We are investing in our in-venue offers and facilities, and driving better personalisation online

by introducing innovative technology such as artificial intelligence.

Innovative cross-channel app strategy

We are developing apps for each brand that meet customer needs for both online and in-venue experiences, creating a seamless customer experience.

Continuous and personalised customer experience across any device and venue

With unified membership across our online channels and venues we can offer real time communication and more personalised content, as well as easier cross selling and improved onboarding to our services. We are also live streaming from our casinos to online audiences and providing an enhanced digital live gaming experience.

Find out more on pages 32 to 33.