Rank Group PLC (LSE:RNK), the owner of Mecca Bingo and the Grosvenor casino brand, remained flat in trading on Thursday after it maintained steady growth in all its divisions, with the group on track to deliver its full-year guidance.
Net gaming revenue came in at around £179 million for the quarter, representing an annual increase of 11%, with Grosvenor Casino sales accounting for around £84 million of overall figures, a trading update revealed.
Both its bingo brands Mecca, based in the UK, and Spanish-facing Enracha experienced solid growth, with net gaming revenues rising by 11% and 9% respectively.
Analysts at Shore Capital are keeping their forecasts unchanged, estimating £44 million in operating profits for the full year, with the unwinding of higher energy costs set to provide a tailwind, despite 80% of it being hedged.
No change to the cost outlook was hinted at during Rank’s statement, but the UK investment firm’s experts are confident the business can achieve operating profits of £100 million in the foreseeable future.
Expecting to receive as much as a £20 million boost proposed gambling reforms, many of which aim to boost the bingo industry, Rank could reach as high as 200p a share in the opinion of Shore Capital Group (LSE:SGR).
Analysts at Peel Hunt Ltd (AIM:PEEL) also chimed in on the matter, and while their target price of 100p is slightly more conservative, it believes a “solid recovery is starting to feed through to the bottom line.”
Upgrading the stock from ‘add’ to ‘buy’, Peel Hunt pointed out how the planned introduction of more casino gaming machines could boost growth materially in the next two years.
Shares in Rank are down a little over 2% in 2023 and on Thursday the stock opened at around 77p.