Rank Group PLC (LSE:RNK)'s results were comfortably above market estimates, cash positive and with the dividend reinstated, with the momentum continuing into the current year, notes Shore Cap.
Ahead of today’s update, Shore Cap had forecasted operating profit to increase to £53m (EPS: 7p), with the momentum at the start of the current financial year supporting these forecasts. Doubling the second half's outturn results in £50 million annualised operating profit.
At 69p per share, Rank is valued on FY25F multiples of approximately 10x PER and 5x EBITDA.
Digital momentum is strengthening, the land-based revenue and profit base continues to recover, and proposed gambling reform, when enacted, could bring a step-change in performance and long-term opportunity.
Rank today called for changes to credit restrictions to allow more high-net-worth international gamblers.
“We have previously set out how these measures combined could increase operating profit back towards £100m. Buy,” said ShoreCap.
Shares rose 6p to 76p on Thursday.