Edison Investment Research - Rank Group PLC (RNK) Rank Group - Recovery potential and operational gearing

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Edison Investment Research

Kate Heseltine

Rank Group - Recovery potential and operational gearing

Rank Group has faced numerous external challenges since 2020: the ravages of the COVID-19 pandemic and tighter regulatory requirements, in particular the negative effects of required affordability restrictions, have been followed by the recent cost of living crisis and higher inflation. These external challenges have masked the group’s underlying transformation, which is extending and improving the product offer, while making the organisation more efficient to drive future growth and innovations. With revenues at key assets well below pre COVID-19 levels, Rank Group has the potential to demonstrate rapid revenue and profit growth on a normalisation of demand and costs pressures, before the potential for easing regulation is considered. Based on consensus EV/sales, Rank Group’s valuation is at a significant discount to its own historical multiples.

28/02/2023 1 EN

Underlying

Rank Group PLC

Rank Group is a gaming operator. Co. has four segments: Grosvenor Casinos, which is a casino operator that provides a range of casino table games, including roulette, blackjack, baccarat and poker as well as electric casino and slot machine games; Mecca, which is a bingo operator that provides a selection of games from bingo to a range of slot games, and the venues also have food and drinks, and live entertainment; Luda, which is a community-based gaming brand; and Enracha, which is Co.'s community-based gaming business for the Spanish market that provides community games like bingo as well as electronic casino and slot machine games, sports betting, food and drink and live entertainment.

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GB00B1L5QH97 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Kate Heseltine

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Rank Group - Recovery potential and operational gearing

Rank Group: 1 director

RANK GROUP sees an upgrade to Slightly Positive due to a better fundamental star rating

Sylvania Platinum - Annual guidance maintained, despite strike

1Spatial - Investing in the transformational SaaS opportunity

Datatec - FY24 underlying EPS more than doubles y-o-y

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