The Rank Group PLC

Annual Report 2023

To excite

and to entertain

Overview

2023 highlights

Our business at a glance

Strategic report

Chair’s letter

Chief Executive’s review

Our business model

Our external environment

Our strategy

How we create long term value

Our key performance indicators

Our approach to ESG

CFO’s review

Alternative Performance Measures

Risk management

Compliance statements

Governance report

Chair’s introduction to governance

Governance at a glance

2018 Code Compliance Statement

How we are governed

Our Board

100 A year in review

102

Our culture and workforce engagement

103 Senior management

104 Nominations Committee Report

109 Audit Committee Report

117

ESG & Safer Gambling

Committee Report

121 Finance Committee Report

123 Remuneration Committee Report

126 Remuneration at a glance

128 Remuneration Policy

136 Annual Report on Remuneration

148 Directors’ Report

152 Directors’ Responsibilities

Financial statements

154 Independent auditor’s report

164 Group income statement

165

Group statement of comprehensive

(loss) income

166 Balance sheets

168 Statements of changes in equity

170

Statements of cash ﬂow

171

Notes to the ﬁnancial statements

218 Five-year review

219 Shareholder information

Who we are

Over the course of more than three-

quarters of a century, the Group has

entertained many millions of customers

in Britain and around the world.

The Group’s story is one of iconic

brands and talented people.

Our purpose

To deliver exciting and entertaining

experiences in safe, sustainable and

rewarding environments. We will achieve

this through reﬂecting the changing

needs and expectations of our customers,

communities and colleagues.

To excite and to entertain.

Contents

Business highlights

Financial and operational highlights

–

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.

–

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-channel customer 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.

–

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.

–

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.

Catch up with our latest news

and learn more about us on our

corporate website: rank.com

This report is

complemented by

our sustainability

report.

For more information, see Our

commitment to sustainability

rank.com/en/sustainability.html

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

2023 highlights

Mecca Dagenham

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.

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.

Find out more on

pages 32 to 33.

The Rank Group Plc

Annual Report 2023

Enhancing

a seamless customer experience

Grosvenor Bayswater

Improving

our processes,

proposition,

facilities and sports

viewing areas

We have solid investment plans

for Grosvenor that address

what we need to improve to

continue leading the sector.

New processes will allow

us to fully focus on what our

customers need, while we

develop and refurbish the

estate, improve our non-

gaming lounges and introduce

new games and facilities at

our venues.

Find out more on

pages 36 to 37.

Through our investments in

Grosvenor, we are targeting

45% market share by 2027,

compared to our current

36% share and our pre-

COVID-19 position of 40%.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Investing

in our Grosvenor offer

Better customer

experiences through

our RIDE platform

Using our RIDE technology

platform, we focus on

delivering customer journey

improvements from online

to our venues and vice versa,

as well as launching exciting

new games and game variants.

Significant

development

capability for

new products

Our RIDE platform has

unlocked cost synergies

relating to technology services,

cloud hosting, marketing and

player protection tools. It has

also given us the capability

to build on a signiﬁcant

development roadmap that

will enable us to launch or

enhance a range of products

– including the online

streaming of live immersive

events at our Mecca venues.

Find out more on

pages 34 to 35.

The Rank Group Plc

Annual Report 2023

Expanding

our digital products

Ensuring the

wellbeing and

safety of our

colleagues

and customers

We have received a GamCare

Gold Level 2 accreditation for

our Mecca venues and UK

digital business. The

accreditation for Grosvenor

venues is underway. We have

delivered role appropriate

enhanced safer gambling

training to more than 1,200

colleagues, helping them to

develop the skills they need

to have more meaningful

safer gambling interactions

with, and build more

sustainable relationships

with our customers.

Find out more on

pages 40-41.

Improving

affordability

journeys

We continue to develop

and roll out additional safety

mechanisms to help customers

ensure they play within their

means, while improving

affordability journeys to reduce

unnecessary friction in the

onboarding process.

Providing safer

environments

We are making further

investments into our safer

gambling tools and measures,

and enhancing our monitoring

and player protection

capabilities, all while

delivering an excellent

customer experience.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Ensuring

the fun stays fun

Our purpose

To excite

and to entertain

To deliver exciting and entertaining experiences in safe,

sustainable and rewarding environments.

We will achieve our

purpose through

reflecting the changing

needs and expectations

of our customers,

communities and

colleagues.

Strategic objectives

about our strategy

on pages 30 to 41.

Read more about

our ESG strategy

on pages 52 to 71.

Modernise our core

Remain relevant to our existing customers.

Rank’s complementary strengths

Strong brand strength.

Strategic pillars: 1, 2 and 3.

Proven transformation delivery.

Strategic pillars: 1, 2, 3, 4 and 5.

Extend our reach

Deliver distinctive experiences building

off our unique venues portfolio to attract

new customers.

Rank’s complementary strengths

Highly trusted by our customers

and partners.

Strategic pillars: 1, 2, 3, 4 and 5.

Proven cross-channel capability.

Strategic pillars: 1.

Expand our footprint

Diversify our Group revenues, increasing

the proportion of revenues that are digital

and/or international in nature.

Rank’s complementary strengths

In-house proprietary technology platforms

for both the UK and Spanish markets.

Strategic pillars: 1 and 2.

Experience of complex regulator

environments.

Strategic pillars: 2, 3 and 5.

Our strategy

Pillar 1:

Provide a seamless and

tailored experience for customers

across venues and online.

Pillar 2:

Drive digital growth

technology and live play

credentials.

Pillar 3:

Continuously evolve our

venues estate with engaging

propositions that appeal to both

existing and new customers.

Pillar 4:

Be passionate about

the development and wellbeing

of our colleagues and the

contribution we make to our

communities.

Pillar 5:

Build sustainable

relationships with our customers

by providing them with safe

environments in which to play.

Embedding sustainability

Our sustainability objectives are fully

embedded in the Group’s strategy.

Pillar 4 and pillar 5 are dedicated to our

sustainability focus areas of customer,

colleagues, communities and the

environment.

The Rank Group Plc

Annual Report 2023

Our business at a glance

Our enablers

Rank in numbers

116

casino and bingo venues in Europe

3.1

active customers

120

digital brands in addition to

three household, heritage brands

in the UK and Spain

7,300

employees in eight countries

native games and nine

native apps

proprietary gaming platforms –

giving control over content

and speed to market

Rank has a long history in gambling and entertainment. Its unique

land-based portfolio, along with our digital growth channels means we

have the core capabilities to expand within the UK and internationally.

Key facts

Technology and data

Our proprietary technology and data

management is helping us drive growth

and meet customer needs.

–

Accurate, real time customer data

–

Scalable operations and platforms

–

Automation to improve efﬁciency

–

Unique products, customer

experience and content

–

Speed to market

–

Control over tech development

People and culture

We support the development of our

colleagues to help them provide great

customer experiences.

–

Strong leadership culture

–

An international growth mindset

–

Brilliant attention to detail

–

Engaging workplaces where

colleagues can do great work

–

Strong internal pipeline of talent

–

Agility and readiness for continuous

improvement and change

–

Market-leading rewards, beneﬁts

and incentives

Efficiency and

effectiveness

We continuously evolve our

organisation, processes and technology

to deliver a more efﬁcient organisation.

–

Organisational ﬂexibility

–

Strategic unity and prioritisation

–

Customer centricity

–

Automation and process

improvement

–

Strong delivery

of risk management

Sustainability

We are committed to supporting

our customers, our people, our

communities and the environment.

–

Best-in-class approach

to safer gambling

–

A fair, safe and inspiring

working environment

–

Engaged workforce focused

on the customer

–

Contribute positively

to our communities

–

Minimise our

environmental impact

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Mecca

Mecca is Rank’s community-gaming brand

for the British market. A national portfolio

of 56 venues offering bingo, slot machine

games, great value food and drink, and

live entertainment.

Key advantages:

–

High brand equity

–

Good market share position

–

A loyal, repeat customer base

Key areas of focus:

–

Reshaping of the estate to improve

its proﬁtability

–

Continue to support the brand online

–

Investment in product and environment

Grosvenor Casinos

The UK’s largest multi-channel casino

operator with 51 venues. The brand offers

a range of casino table games, including

roulette, blackjack, baccarat and poker

as well as electronic roulette and slot

machine games.

Key advantages:

–

Market leader in UK casinos

–

Proﬁtable estate

–

Cash generative

Key areas of focus:

–

Grow position as market leader

–

Improve management of customer risk

–

Crystallise the signiﬁcant cross-channel

opportunity

–

Improve the customer proposition and

attract new customers through improved

product and offers facilitated by the

Gambling Act review

Enracha

Enracha is Rank’s community-gaming

business for the Spanish market.

Nine venues offering a range of

popular community games like bingo

as well as electronic casino and slot

games, great value food and drink,

and live entertainment.

Key advantages:

–

Flagship venues and well-

invested estate

–

Strong machine offering

–

Cash generative

Key areas of focus:

–

Continue to invest to retain

strong customer appeal

–

Review opportunities to expand

footprint in Spain

Our venues

Mecca Luton

Grosvenor Gloucester Road

Don Pelayo

Our aim

To provide a seamless, continuous,

and personalised experience

across any device or venue our

customers wish to visit.

The Rank Group Plc

Annual Report 2023

Our business at a glance

Continued

Mecca

Mecca’s complementary digital channel

offering a range of popular games like

bingo, a wide range of slot games and

table games.

Grosvenor

Grosvenor’s complementary digital

channel offering many popular games,

including its successful live casino,

in addition to a sports betting offer.

The Group also operates the market-

leading digital bingo brand, YoBingo,

to the Spanish market alongside its

digital casino offer, YoCasino.

In addition to its established brands,

the Group also operates multiple digital

brands using a combination of

proprietary and non-proprietary online

bingo, casino and slot gaming.

Key advantages:

–

Proprietary platform and strong

product capabilities

–

Leading bingo brands

–

Strong digital marketing capabilities

–

Proven cross-channel credentials

Key areas of focus:

–

Deepen the brand experience

and cross-channel offering

–

Extend proprietary product

development

–

Build out the scalability

of the RIDE platform

Split of LFL NGR – UK

Venues

£440.4m

Digital

£172.7m

Split of LFL NGR – International

Venues

£36.4m

Digital

£30.2m

Our markets

Our digital brands

Building a unique

blend of experiences,

branded venues

and digital channels

in the UK and Spain.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

The Rank Group Plc

Annual Report 2023

Strategic Report

In this section:

We describe why we are

conﬁdent that the improvements

we are continuing to make

to the customer proposition

and the investments in our

venues, alongside the gradually

reducing impact of the

pandemic, positions us well

for the year ahead.

We also look at how we have

strengthened our balance

sheet and our understanding

of what our customers want

from the business.

Chair’s letter

Chief Executive’s review

Our business model

Our external environment

Our strategy

How we create long-term value

Our key performance indicators

Our approach to ESG

CFO’s review

Alternative Performance Measures

Risk management

Compliance statements

Strategic report

Governance report

Financial statements

Overview

The Rank Group Plc

Annual Report 2023

We have delivered

a solid performance

in the year, despite

the challenges

faced by both our

customers and the

Group from the

current inﬂationary

environment.

Dear shareholders

Introduction

After a slow start in the ﬁrst half of

the year, Rank has achieved a robust

performance in the second half.

The leadership team’s resolute focus

and disciplined execution have been

instrumental in achieving Rank’s signiﬁcant

milestones. These milestones stand as

crucial factors that have contributed to

the enhanced performance seen across

the year and will support the generation

of sustainable long term value for both

shareholders and stakeholders.

The Group is off to a solid start in the

new ﬁnancial year, bolstered by a strong

balance sheet, enhanced by securing

new bank debt facilities. We are pleased

to share that all our business units are

performing well, further solidifying our

conﬁdence in the path ahead.

Our ﬁnancial strength positions us

favourably to capitalise on opportunities

and navigate challenges effectively.

Furthermore, the improving performance

of all our business units underscores the

efﬁcacy of our strategies and the

dedication of our teams.

Business updates

Underlying Group LFL

Net Gaming Revenue (‘NGR’)

up on prior year.

Underlying NGR for our

digital business driven by the

performance of our Grosvenor,

and Mecca brands.

Underlying NGR for our

venues businesses.

Strategy

The Group’s strategy is built upon ﬁve

fundamental pillars which are outlined

on pages 30 to 41, these are geared

towards enhancing the overall customer

experience while maintaining a strong

commitment to sustainability.

During the year, the Group developed

its strategy further by overlaying three

key objectives.

–

To modernise Rank’s core operations

whilst remaining relevant to it’s

existing customers.

–

To extend the reach of the Group’s

products and services by delivering

distinctive experiences building off

Rank’s unique venues portfolio.

–

To expand the Group’s footprint to

diversify revenues thus increasing the

proportion of revenues that are digital

and/or international in nature.

Performance

Underlying Group LFL NGR was up 7%

on the prior year.

Our venues continued to recover in the

year, with underlying LFL venues NGR

up 6% on the prior year. During the year

we completed a number of casino

refurbishments following the success

of the refurbishment undertaken at our

Glasgow Merchant City casino which was

completed at the start of the year.

Alex Thursby

Chair

The Rank Group Plc

Annual Report 2023

Chair’s letter

This milestone not only streamlines

our operations but also empowers us to

leverage the full potential of our advanced

platform, enabling us to innovate and

deliver even greater value to our customers.

Regulation and safer gambling

The Board and I are steadfast in our

commitment to sound regulatory practices,

whilst ensuring the safe and responsible

delivery of the Group’s products and

services to our customers.

In addition, open and transparent dialogue

between the Board and regulators is of

utmost importance and will continue to

be a key priority for the Board and the

executive team.

Dividend

Taking account of the continued

challenging trading environment and the

strong pipeline of investment opportunities

to drive revenue and proﬁt growth, the

Board has not proposed a full year dividend

but expects to recommence dividend

payments as soon as circumstances permit.

Environmental management

On the environmental front, we have taken

a signiﬁcant step towards sustainability

by establishing a net zero target.

This commitment is supported by a

comprehensive set of initiatives designed

to reduce our carbon footprint and promote

eco-friendly practices throughout our

As we look ahead, the coming year holds

signiﬁcant importance in the development

of our UK venues’ proposition, particularly

within our Grosvenor venues. The UK

Government’s white paper on gambling

reform has presented us with an

opportunity to implement changes that

will shape the future of our offerings.

We are excited about the evolution of our

venues’ proposition and the potential to

attract new customers through enhanced

products and a more appealing in-venue

experience.

Our Digital business delivered strong

growth in the year, with underlying LFL

NGR up 10%. During the year, our UK

digital business achieved a signiﬁcant

milestone in its strategic roadmap by

successfully completing the migration of

its last brand onto the Group’s proprietary

RIDE platform. This achievement marks

a pivotal moment in our digital

transformation journey.

With the completion of the tech migrations,

our UK digital business can now shift its

focus to enhancing the customer

experience. We are excited to channel our

efforts into developing better products,

services, and customer journeys, ensuring

that our valued customers enjoy a seamless

and engaging online experience.

operations. Our colleagues are integral to

this endeavour, and we are implementing

a robust engagement programme to foster

a culture of sustainability and responsibility

across the organisation.

Board changes

Having completed over six years on

the Board, Steven Esom, Non-Executive

Director and Chair of the Remuneration

Committee, stepped down from the Board

on 31 December 2022.

On behalf of Rank and the Board, I would

like to thank Steven for his valuable

contribution as a Director on the Board and

as Chair of the Remuneration Committee

for the past six years. Steven’s wealth of

experience in consumer-focused industries,

coupled with his long-standing strategic

and shareholder experience, has had a

strong inﬂuence on the Board and helped

lay the foundations for Rank’s future

growth. His experience has also been

crucial in broadening the scope of

our Remuneration policies.

Lucinda Charles-Jones succeeded

Steven Esom as Chair of the Remuneration

Committee and was appointed as the

designated Non-Executive Director for

workforce engagement from 1 January 2023.

On 16 August, Keith Laslop was appointed to

the Board as a Non-Executive Director and a

member of the Audit Committee, with effect

from 1 September 2023. Keith was Chief

Financial Ofﬁcer of Gamesys Group Plc

and brings extensive ﬁnancial and digital

gaming experience which will enhance

the effectiveness and skillset of our Board

and will support our growth strategy.

Colleagues

Our colleagues are pivotal to the Group’s

achievements, and in a competitive

landscape where exceptional individuals

are highly sought after, it’s crucial for us to

retain our valuable team members and also

draw new talent to support the execution of

our growth strategy. With this objective in

mind, we made a signiﬁcant commitment

to invest in our colleagues through

improved beneﬁt and reward packages.

So as we come to the close of another year,

I wanted to take a moment to express the

Board’s gratitude and appreciation for the

7,300 Rank colleagues.

Alex Thursby

Chair

16 August 2023

Strategic pillar 4

Learn more on

pages 38 to 39.

Improving the

engagement of

colleagues

Our colleagues are integral

to our success and we support

them every step of the way, not

just in their career progression

but also through our

engagement initiatives.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

We are investing

in our venues,

technology and

digital capabilities

to ensure that we can

offer the exciting new

and improved live

gaming experiences

our customers want.

John O’Reilly

Chief Executive

Mecca Luton

Improved customer

experiences

The performance of Mecca

Luton which reopened in

March 2022 continued to

improve during the year,

delivering many learnings

in terms of its attractiveness

to a broader customer base.

As a consequence, investments

have been made in the year

at nine Mecca venues.

During H1 2022/23, the Group undertook

a review of the Group’s central costs and

concluded it is appropriate that a proportion

of these costs should be allocated to each

of its operating business units.

Consequently, we have presented

operating proﬁt pre and post the central

cost reallocation and, to aid comparisons,

2021/22 operating proﬁt for each business

unit has been restated accordingly.

The year to 30 June 2023 saw the

continued recovery of our venues

businesses following the very heavy impact

of pandemic lockdowns and the subsequent

sharp rise in inﬂation, interest rates and

energy costs. In the UK, both Grosvenor

and Mecca venues saw accelerated revenue

recovery in the second half of the year with

proﬁt conversion improving as energy costs

began to fall. In Spain, Enracha continued

its strong recovery and saw its annual

revenues back above pre-pandemic levels.

Our digital business maintained double

digit revenue growth and is making an

increasing contribution to the Group’s

overall proﬁtability.

At a Group level, underlying like-for-like

(‘LFL’) NGR of £679.7m was up 7% against

the prior year. All businesses within the

Group were in LFL revenue growth in the

year with Grosvenor venues at +4%, Mecca

venues at +7%, Enracha venues at +19% and

Digital at +10%. With continued recovery

in the venues businesses, revenue in the

second half of the year grew 13% on the prior

year compared with the 2% year-on-year

growth posted in the ﬁrst half.

The trading update issued in December

2022 reﬂected lower than expected

performance in the ﬁrst half of the year and

rebased future performance expectations.

This was the main driver of the £118.9m

of impairment charges for the current year

and relates to a number of our Grosvenor,

Mecca and Enracha venues.

Despite the improving revenue position,

underlying LFL operating proﬁt of £20.3m

was down 52% against the prior year

(£42.5m), reﬂecting the signiﬁcant

increases in energy and employment costs

and the absence of Government furlough

payments and other pandemic related

support which continued to support the

Group in 2021/22.

Energy costs are expected to be circa £20m

for 2023/24, down from £28.6m in 2022/23.

Business performance

The Rank Group Plc

Annual Report 2023

Chief Executive’s review

“

Our digital business is

performing strongly, and

we have a strong pipeline

of customer-facing

developments in both our

UK and Spanish-facing

brands to drive revenue

and profit growth.”

NGR

2022/23

£m

2021/22

£m

Change

Grosvenor venues

306.3

293.9

Mecca venues

134.1

124.8

Enracha venues

36.4

30.7

19%

Digital

202.9

183.8

10%

Underlying LFL

679.7

633.2

Impact of venues closures and FX

2.2

10.8

Underlying

681.9

644.0

Operating profit

2022/23

£m

2021/22

£m

Change

Grosvenor venues

27.7

45.4

(39)%

Mecca venues

4.0

2.0

100%

Enracha venues

9.2

8.3

11%

Digital

18.8

17.5

Central costs

(39.4)

(30.7)

28%

Underlying LFL

20.3

42.5

(52)%

Presentation post reallocation of central costs:

Grosvenor venues

16.3

36.5

(55)%

Mecca venues

(5.8)

(4.9)

(18)%

Enracha venues

9.1

8.2

11%

Digital

13.8

13.4

Central costs

(13.1)

(10.7)

22%

Underlying LFL

20.3

42.5

(52)%

Impact of venues closures and FX

(1.2)

(4.0)

Underlying

19.1

38.5

(50)%

Results are presented on a like-for-like (‘LFL’) basis which removes the impact of club closures, foreign

exchange movements and discontinued operations.

A full analysis of these adjustments can be found in the Alternative Performance Measures (‘APM’) section.

Business updates

Underlying LFL Net Gaming Revenue

(‘NGR’) was up 7% compared to the

prior year.

Ended the year with average weekly NGR

of £12.9m in Q4, up 13% on the prior year.

20.3

Underlying LFL operating proﬁt of

£20.3m, down 52% reﬂecting signiﬁcant

cost increases.

17.4

Total capex spent on venues

refurbishments and new gaming product.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

The largely ﬁxed or semi-ﬁxed cost base of

the Grosvenor business delivers signiﬁcant

operating leverage as revenues grow. With

revenues slow to recover to pre-pandemic

levels, inﬂationary pressure on employment

and other costs resulted in LFL underlying

operating proﬁt post-central cost recharges

of £16.3m in the year (down from £36.5m

in 2021/22). The key cost pressures on the

business have been seen in salaries and

wages +£12.2m, energy +£3.8m, and

property maintenance +£2.3m.

The Grosvenor team has continued to

focus on driving operating cost efﬁciencies

in the year including the further rollout

of a table operating system to ensure table

gaming is operating as efﬁciently as possible,

LED lighting and other energy saving

initiatives, reductions in trading hours in

selected venues and a rationalisation of the

food and beverage offering to reduce

wastage and improve operating margins.

The increase in salary and wage costs in

the Grosvenor business reﬂects the labour

market pressures since reopening

following lockdown in May 2021. The

absence of European croupiers coming

to the UK as a result of Brexit has added

to the broader job market pressures within

the hospitality sector. The investment the

business has made in colleague salaries

and wages has signiﬁcantly eased these

employment pressures and supported

the ongoing improvement in colleague

engagement and eNPS scores across

the Grosvenor estate. The Grosvenor

management team has also been further

strengthened with the addition of two

further Regional Operations Managers

in the year and the build out of a new high

value customer team to better support

the needs of higher staking customers

particularly within the very competitive

London market.

Grosvenor venues

Grosvenor venues’ underlying LFL NGR

was up 4% compared to the prior year.

Recovery from the combined impact of

lockdowns during the pandemic and

tightened affordability restrictions has

been slower than expected. NGR declined

5% in the ﬁrst half against the prior year

but grew 15% against H2 2021/22.

Average weekly NGR grew from £5.8m

in Q1 to £6.0m in Q2 and Q3 before falling

back to £5.8m in our traditionally softer Q4.

The respective year-on-year movements

were (5)%, (5)%, +15% and +16%.

Grosvenor’s London casino estate continues

to perform below the levels seen prior to the

pandemic. The rise of working from home

following the pandemic has impacted

visitor volumes in London but the most

material effect remains the slow return of

customers from the Middle East and from

East and South-East Asia. With fewer

international customers arriving in London,

competition amongst London’s casinos

is more intense than ever. Revenue in the

London estate was ﬂat on the prior year.

The Grosvenor Russell Square casino was

permanently closed in the year reducing

the overall Grosvenor estate to 51 casinos,

representing 43% of the UK market’s

118 casinos.

Rest of the UK performance has been

recovering more quickly. NGR was up 6%

against the prior year on visits up 7%.

Key financial performance indicators

2022/23

£m

2021/22

£m

Change

LFL

NGR

306.3

293.9

London

99.3

98.9

Rest of the UK

207.0

195.0

Total NGR

306.3

296.6

Underlying

LFL

operating proﬁt pre-central

cost reallocation

27.7

45.4

(39)%

Underlying

LFL

operating proﬁt post-central

cost reallocation

16.3

36.5

(55)%

Total (loss)/proﬁt

(35.4)

51.7

–

Results are presented on a like-for-like (‘LFL’) basis which removes the impact of club openings, closures,

acquired businesses, foreign exchange movements and discontinued operations.

2. Before the impact of separately disclosed items.

Grosvenor Gloucester Road

The Rank Group Plc

Annual Report 2023

Chief Executive’s review

Continued

Successful

product launch

The ﬁrst UK casino side bet

progressive with jackpots

launched in the year.

The Group has continued to invest in the

Grosvenor business both to improve the

quality of the customer proposition and

to prepare the estate for the impact of the

UK Government’s review of gambling

legislation for land-based casinos which,

following the publication of the white

paper in April 2023, is now expected

to be implemented during 2024/25.

£7.1m has been invested in property

refurbishments during 2022/23. Merchant

City, Glasgow, is a high footfall venue in

a very good location which has historically

performed strongly but had needed

updating. The venue has had a complete

overhaul with the introduction of new

brand standards which help to underline

the entertainment and excitement of the

Grosvenor customer proposition.

Grosvenor Merchant City now has a bar,

sports viewing area, restaurant and gaming

machines on the ground ﬂoor with a modern

and vibrant gaming and poker ﬂoor below.

It has been an important development in

broadening the appeal of casinos and the

brand identity and brand guidelines have

been gradually rolling out across the wider

Grosvenor estate.

In the London estate, Grosvenor Gloucester

Road has undergone a full refurbishment

to better meet the needs of its Kensington

customer base. The development includes

a wholly refurbished gaming ﬂoor and

a new restaurant and bar area. Grosvenor

Bayswater (formerly the Golden

Horseshoe) also now enjoys the beneﬁt

of a new restaurant and bar area which

is proving very popular with its customers.

All development projects continue to be

designed for the implementation of up

to 80 gaming machines once the policy

decisions in the Government’s review

of gambling legislation are enacted.

£6.0m has been invested in new electronic

gaming terminals, gaming machines,

tables and wheels during the year.

New gaming machines are being trialled

for future implementation. Total capital

investment in the Grosvenor estate in

the year was £19.5m.

A new electronic roulette game has

also been rolled out across the Grosvenor

estate. Called Going for Gold, the game

is the ﬁrst to offer UK casino customers

a side bet progressive with jackpots that

run to hundreds of thousands of pounds.

Another new initiative has been the roll

out of a new local marketing tool and

framework that enables casinos to identify,

review and contact cohorts of contactable

customers using SMS messaging; email

capability will very soon be added to

the functionality.

The Grosvenor business completed

a Gambling Commission compliance

assessment during 2022/23. There were

several changes to policies and to

practices to better protect our customers

that were identiﬁed during the assessment

process. Having implemented a new risk

model in the prior year, this has now been

rolled out on an app for colleagues to use

to assess customer risk, determine the

nature of the required customer

interaction and to record and evaluate

the outcomes. This provides a tighter

framework for managing customer risk

to ensure customers are playing within

their means. It also enables earlier and,

consequently, more positive interaction

with our customers.

During the year, Grosvenor recognised

an impairment charge of £53.3m relating

to 23 venues due to lower than expected

trading performance, and an impairment

reversal of £6.6m relating to another

seven venues.

“

Having implemented

a new risk model in the

prior year this has now

been rolled out on an app

for colleagues to use to

assess customer risk,

determine the nature

of the required customer

interaction and record

the outcomes.”

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

9% and food and beverage sales grew 6%.

Gaming machine NGR grew by just 2%

in the year, but with stronger momentum

in the second half of the year which saw

NGR grow by 7%. Much work is ongoing

across the Mecca estate to improve the

quality of the machine offering and we are

hopeful that the announced change in the

Government’s white paper to the makeup

of machines in bingo venues which

currently restricts Category B3 machines

to just 20% of the gaming machine offering,

will enable Mecca to better meet the needs

of today’s consumers.

With LFL NGR growing £9.3m in the year,

Mecca’s LFL underlying operating loss

post-central cost was £5.8m, down from

£4.9m in 2021/22. The key cost increases

in the year were energy +£1.3m and

property maintenance +£1.5m, offset by

reductions in duty and employment costs.

The performance of Mecca Luton which

reopened in March 2022, continued to

improve during the year, delivering many

learnings in terms of its attractiveness

to a broader customer base. Consequently,

investments have been made in the year

at nine Mecca venues, primarily focusing

on updating their external appearance

and improving the quality of the gaming

machine offering. Playsafe, a system

which supports the provision of real time

information for our colleagues on

individual customer machine play has been

successfully rolled out across the estate.

Total capital investment in the Mecca estate

in 2022/23 was £12.5m.

During the year Mecca recognised

an impairment charge of £61.5m relating

to 70 venues, including some which were

closed in the year, due to the lower than

previously expected performance.

Mecca Venues

2022/23 has been something of

a turnaround year for Mecca venues

following the severe downturn the

land-based bingo sector suffered as a result

of the pandemic lockdowns. The bingo

industry emerged from the pandemic

with a smaller customer base and with the

consequent lower revenues resulting in

weaker prize boards. Stronger bingo venues

in terms of prize fund liquidity have been

able to sustain strong businesses and have

attracted custom from weaker venues.

Across the sector, post-pandemic, there

has been too many bingo venues.

Mecca venues emerged from lockdown

with an estate of generally strong bingo

venues. Nevertheless, the downturn

in customer numbers and revenues

necessarily led to some closures. Bingo

venues are social amenities which play

a very important role within their local

communities and therefore the decision to

close a venue is not taken lightly. However,

having given the lower liquidity Mecca

venues every opportunity to recover and

to return to proﬁtability, 15 venues were

permanently closed during 2022/23. This

has reduced the Mecca estate to 56 venues.

These 56 stronger venues have improved

their appeal to customers with LFL NGR

for the Mecca estate growing 7% against

the prior year.

With a strengthened leadership team in

place, Mecca venues ended the year with

strong momentum. In the ﬁrst half of the

ﬁnancial year NGR grew 4% on the prior

year on customer visit volumes also

growing by 4%. H2 2022/23 LFL NGR

grew 11% on visitor volumes up 4%, with

strong H2 performances from bingo and

machine gaming. The business continues

to see the return of customers following

the pandemic despite reopening two years

prior. However, the business continues

to attract high volumes of new customers

with circa 4% of customers every week

being new to Mecca. Over 50% of new

customers to Mecca are aged under 35.

Mecca’s customer net promoter score

(‘NPS’) further improved, rising from +61

last year to +78 in 2022/23. The increasing

momentum in the business also reﬂects in

our colleague eNPS scores which further

increased from +4 in 2021/22 to +25

in 2022/23.

Main stage bingo NGR grew 24% on the

prior year, driven by the success of strong

prize boards and the addition of a new

bingo variant. Interval bingo NGR grew

Key financial performance indicators

2022/23

£m

2021/22

£m

Change

LFL

NGR

134.1

124.8

Total NGR

136.3

134.0

Underlying

LFL

operating proﬁt pre-central

costs reallocation

4.0

2.0

100%

Underlying

LFL

operating (loss) post-central

cost reallocation

(5.8)

(4.9)

(18)%

Total (loss)/proﬁt

(74.1)

26.7

–

Results are presented on a like-for-like (‘LFL’) basis which removes the impact of club openings, closures,

acquired businesses, foreign exchange movements and discontinued operations.

2. Before the impact of separately disclosed items.

The Rank Group Plc

Annual Report 2023

Chief Executive’s review

Continued

Capital investment in the year of £1.2m was

focused on completing the rollout of TiTo

(the ticket in ticket out customer payment

and withdrawal mechanism for gaming

machines), a trial of a loyalty programme

in selected venues, the rollout of a new

food and beverage electronic point of sale

(‘EPOS’) system, machine jackpot display

screens and the continued upgrade of the

gaming machine estate.

During the year Enracha venues recognised

an impairment charge of £4.1m relating to

two venues whose performance was lower

than anticipated.

Enracha venues

The Enracha estate of nine bingo, machine

gaming and sports betting venues in Spain

performed strongly with underlying LFL

NGR growing 19% over the prior year. LFL

NGR of £36.4m was the result of continued

strong growth in gaming machine NGR

(AWPs, electronic roulette and B3/B4 bingo

machines) which were up 25%, with main

stage bingo NGR up 10% on the prior year.

This improving NGR position for bingo

reﬂects the strength of bingo liquidity

and prize boards across the Enracha

venues estate.

Customer visits grew 16% in the year.

Enracha delivered a LFL underlying

operating proﬁt post allocation of central

costs of £9.1m, up 11% on the £8.2m

operating proﬁt in 2021/22. The key areas

of cost increase were seen in employment

costs which were up £3.0m and energy

costs which were up £0.4m on the prior

year. The reallocation of central costs only

marginally impacted LFL underlying proﬁt

at £9.1m.

Key financial performance indicators

2022/23

£m

2021/22

£m

Change

LFL

NGR

36.4

30.7

19%

Total NGR

36.4

30.1

21%

Underlying

LFL

operating proﬁt pre-central

cost reallocation

9.2

8.3

11%

Underlying

LFL

operating proﬁt post-central

cost reallocation

9.1

8.2

11%

Total proﬁt

4.9

15.0

(67)%

Results are presented on a like-for-like (‘LFL’) basis which removes the impact of club openings, closures,

acquired businesses, foreign exchange movements and discontinued operations.

2. Before the impact of separately disclosed items.

A recovered

Enracha business

Enracha venues delivered 19%

year-on-year NGR growth.

Don Pelayo

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Digital

The digital business has performed

strongly in the year with LFL NGR growth

of 10% to £202.9m and underlying LFL

operating proﬁt pre-allocation of central

costs growing 7% to £18.8m. After the

reallocation of £5.0m of costs previously

assigned as central costs, but now

appropriately charged to the digital

business, the full year underlying

operating proﬁt was £13.8m.

LFL NGR, excluding Enracha/Yo, was up

10% on the prior year at £178.8m. Now fully

operating on the RIDE proprietary platform,

the Mecca and Grosvenor brands continued

to improve their performance with Mecca

growing NGR 9% and Grosvenor growing

14% year-on-year. Our other UK facing

brands saw NGR grow 8% in the year.

With the successful conclusion of the

project to ready the RIDE platform for

the migration of the Mecca and Grosvenor

online sites, the digital team is now focused

on further improving the products, services

and user journeys for our customers. Much

greater personalisation has been added

to the Mecca and Grosvenor sites during

the year so that the customer increasingly

receives an offering which more suitably

meets their preferences. New live gaming

tables have been added both from

Grosvenor venues and from a new live

dealer studio opened during the year. Safer

gambling player journeys continue to be

improved to reduce friction for customers

and a new markers of harm model has

been successfully introduced to further

help identify at risk play in real time.

The development effort in the software

engineering hub in Cape Town is centred

on the next phase of delivering a seamless

cross-channel experience to customers

including a uniﬁed customer membership

system, a single content management

system operating across all the digital

brands and further modernising the RIDE

platform to speed up the development time

and to increase both capacity and

reliability. Artiﬁcial Intelligence (‘AI’) is

being added to customer journeys and in

particular to customer support to improve

our responsiveness to customers. The

development of a single cross-channel

central engagement platform has also now

been successfully completed and is being

rolled out across key data driven processes

such as real time predictive models,

cross-channel single customer view and

real time business performance reporting.

Key financial performance indicators

2022/23

£m

2021/22

£m

Change

LFL

NGR

202.9

183.8

10%

Mecca

72.6

66.9

Grosvenor

57.0

49.8

14%

Enracha/Yo

24.1

21.5

12%

Other including Stride legacy brands

49.2

45.6

Total NGR

202.9

183.3

10%

Mecca

72.6

66.9

Grosvenor

57.0

49.8

14%

Enracha/Yo

24.1

21.0

15%

Other brands including Stride legacy brands

49.2

45.6

Underlying² LFL

operating proﬁt pre-central cost

reallocation

18.8

17.5

Underlying

LFL¹ operating proﬁt

post-central cost reallocation

13.8

13.4

Total proﬁt/(loss)

4.7

(1.2)

–

Results are presented on a like-for-like (‘LFL’) basis which removes the impact of club openings, closures,

acquired businesses, foreign exchange movements and discontinued operations.

2. Before the impact of separately disclosed items.

The business continues to build out

its operations hub in Mauritius which

provides a high-quality capability across

a number of key back ofﬁce, marketing

and customer management functions.

In Spain, the Yo and Enracha brands grew

LFL NGR by 12% in the year. YoSports was

successfully launched prior to the FIFA

World Cup and the site has received a good

response from customers. The ability to

accelerate growth in the Spanish market is

constrained by the marketing restrictions

introduced by the Government in 2021.

However, the launch of YoSports has

supported customer acquisition and

revenue growth in the year and further

initiatives, including platform and site

enhancements and product developments

are in the pipeline to also further the

YoBingo, YoCasino and Enracha brands.

The application to the Portuguese

regulator for a licence to launch YoBingo

is ongoing, the timescale largely the result

of no other bingo brand having yet been

licensed in Portugal.

Passion Gaming, the online Indian rummy

business in which Rank holds a 51% share,

grew LFL NGR by 33% in the year following

the easing of regulatory restrictions in

certain states.

Current trading and outlook

The new ﬁnancial year has started

strongly across all of the businesses with

overall underlying Group LFL NGR ahead

by 16% compared with the prior year.

Grosvenor venues NGR has grown 17%

in the ﬁrst six weeks with visits up 13%.

Grosvenor venues trading performance

outside London is strong with NGR up 25%

and visits up 15%, but the performance in

London is softer with NGR up only 5% on

the same period last year.

Mecca venues had a very strong start

to the year with NGR up 17%. Similarly,

Enracha venues NGR is ahead of the prior

year by 12%.

Digital NGR is up 13% in the opening

six weeks, continuing to beneﬁt from

new product and service enhancements

and greater levels of personalisation for

our customers.

Despite the generally challenging trading

conditions, with inﬂation still running

high and the increase in interest rates

impacting consumer discretionary

expenditure, we expect to see good levels

of revenue increase year-on-year and to

grow our proﬁtability in 2023/24.

Group liquidity

The Group ended the year with total cash

and available facilities of £101.4m.

In May 2023, the Group made its

scheduled term loan repayment of £34.5m

in line with the agreed loan amortisation

proﬁle reducing its term loan to £44.4m.

The Rank Group Plc

Annual Report 2023

Chief Executive’s review

Continued

In August 2023, the Group secured a

ﬁnancing package which totalled £100m

of revolving credit facilities. £25m is

committed until November 2024 and

the remaining £75m is committed until

February 2025. The Group has subsequently

repaid the remaining term loan of £44.4m.

The Group will look to replace the £100m

of RCF with a longer-term ﬁnancing

package in 2023/24 when it anticipates

securing better ﬁnancing terms, driven

by additional consecutive months of

improved trading.

The Group expects to meet all future

ﬁnancial covenants under its current

lending facilities.

Sustainability update

We are continuing to mature our approach

to ESG and have strengthened governance

of sustainability initiatives and

performance through the formation of new

working groups, comprising of individuals

across the business and supported by

external consultants.

In recognition of the importance of ESG on

our long-term business success, we have

also introduced eight key performance

indicators (KPIs) across our four focus areas

– Customers, Colleagues, Environment

and Communities. Four of these KPIs

are linked to executive compensation and

further embed the importance of ESG into

our core objectives and culture.

Refer to pages 52 to 71 for further detail on

the sustainability KPIs and progress made

in the year.

Regulatory update

The UK Government’s white paper,

published on 27 April, set out public

policy for reforms to land-based and online

gambling regulation and legislation. The

reforms to land-based casinos and bingo

are critical to ensuring that we can meet

the needs of today’s consumers.

The Government plans to enable casinos

to offer up to 80 gaming machines on a 5:1

machine to live gaming table ratio, subject

to the size of the venue and the available

non-gaming space. Casinos will also be

able to offer sports betting facilities and

enable electronic payments, rather than

just cash, on gaming machines. These

modest but essential reforms, which will

be delivered through secondary legislation,

will enable the UK’s casinos to better meet

the expectations of customers.

The white paper also supports enabling

credit to be offered to High Net Worth

international customers visiting the UK.

The extension of table games such as

blackjack on electronic terminals to enable

customers to play at lower staking levels

has been left as an open issue requiring

further review. Both of these reforms would

require primary legislation, something

which is unlikely to happen in the

foreseeable future.

In bingo, the Government has supported

reform to the current restriction that

requires no more than 20% of the gaming

machines to be category B3 (£2 maximum

stake and £500 maximum prize), with the

balance required to be category C and D

machines which are increasingly

unpopular with customers. Category B3

machines account for over 70% of machine

revenues in Mecca. Rather than removing

the rule, the Government has established

a new 50% rule, requiring half of the

available machines to be category C or D.

This reform, whilst not going quite as far

as we would wish, will enable us to go

a considerable way in modernising the

machine offering for Mecca’s customers.

The bingo reforms also include allowing

customers to make electronic, rather than

simply cash, payments.

The Government has outlined that it

expects these critical land-based reforms

to be implemented through secondary

legislation (positive statutory instruments)

by the summer of 2024.

In the digital sector, the Government

plans to consult on a maximum staking

limit for online slot games which would

subsequently be delivered through

secondary legislation. The other reforms

to online gaming, including changes to

game design, an opt in requirement for

cross-sell and ﬁnancial risk assessments

(to provide a frictionless check on a

customer’s means), will be delivered by

changes to regulations (Licence Conditions

and Codes of Practice (LCCP)) following

consultations conducted by the Gambling

Commission. The Commission anticipates

that the full programme of reforms to

LCCP will take three years to deliver.

We do not expect these regulatory reforms

to have a material impact to our UK-facing

digital business which is already positioned

to ensure we provide very high levels of

protection to our customers.

Management changes

From 1 June 2023, Jon Martin took on

a newly created role of Chief Operating

Ofﬁcer for the Group. Jon was previously

managing director for our UK digital

business, a role he has held since 2020.

Jon will continue to have accountability

for the strategy and performance of the UK

digital business, as well as taking overall

responsibility for the development and

delivery of Rank’s cross-channel customer

offer for the Mecca and Grosvenor brands.

Andrew Peat will join the Group later in

2023 as managing director of the Group’s

UK digital business.

In August, Mark Harper joined as

Grosvenor’s new Managing Director.

Mark joins us from Pears Partnership

Capital, part of the William Pears Group,

where he was the Operating Partner,

managing the leisure and hospitality

investment portfolio, a role he has been in

since 2021. Mark has broad experience in

the leisure industry and the 24/7 economy,

with ten years at Allied Domecq Leisure

across many of their divisions and more

recently in leadership roles at several

leading holiday park Groups.

John O’Reilly

Chief Executive

16 August 2023

Jon Martin

“

From 1 June 2023,

Jon Martin took on a

newly created role of

Chief Operating Officer

for the Group.”

about sustainability

on pages 52 to 71.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Our business model

What we do

How we do it

We have been entertaining Britain since

1937, from our origins in motion pictures to

today’s gaming-based entertainment brands.

Our purpose is to work together to create

environments that reﬂect the changing

needs and expectations of our customers

and our colleagues, delivering stimulating

and entertaining experiences every time.

To excite and to entertain. This is how

we do it.

We are the only Group that offers

customers both venue and digital bingo

and casino experiences.

Venues

–

Largest venues casino operator in Great

Britain (51 venues).

–

Second-largest venues bingo operator

in Great Britain (56 venues).

–

Growing venues bingo presence in Spain

(9 venues).

–

Our venues businesses operate in mature

and well-established gambling markets.

–

Mecca and Enracha are bingo-led brands

which offer community-based gaming.

–

Grosvenor is a casino-led brand

principally focused on table and

machine gaming.

–

Our venues businesses operate through

a mainly leasehold estate.

–

Our venues are membership-based

and free to join.

–

A food and beverage offer is available

across all our venues.

–

Revenue is generated in our venues

when a customer bets against the house

(games of chance). Underlying proﬁt

is generated once the cost of customer

incentives, sales and other operating

costs are deducted.

Digital

–

A diverse portfolio of over 120 digital

brands covering casino, bingo, slots

and sports betting.

–

Our Mecca and Grosvenor online

offers complement our established

venues brands.

–

All digital customers play with our

online brands through a brand wallet.

–

Revenue is generated online when

a customer bets against the house

(games of chance). Underlying proﬁt

is generated once the cost of customer

incentives, sales and other operating

costs are deducted.

Evolving our

position as an

entertainment

brand

Customer insights/engagement

We use customer insights drawn from

customer research and data science

to better understand what our current

and potential customers want, enabling

us to provide relevant, exciting and

entertaining experiences.

Strong brand positioning

We have a portfolio of brands, including

our three well-established cross-channel

brands, Grosvenor, Mecca and Enracha,

which work alongside our 120 digital-only,

proprietary and non-proprietary brands.

Player protection

Using a three lines of defence model,

our front-line colleagues work with our

compliance team and our internal audit

team to ensure that we always take the

appropriate actions to protect our

customers and keep them safe.

Innovation and technology

We invest in proven technology and

exciting innovations that are designed

to support our strategic priorities and

will help us to offer seamless and instant

customer journeys across both our digital

and venue brands.

Inspiring people

As the face of our brands at our venues,

our people are our greatest asset. To

ensure every team member becomes an

expert at delivering brilliant, customer-

focused experiences, we provide regular

training and a dedicated support network.

Our shared STARS values are at the core

of all that we do and are vital in ensuring

we achieve our purpose and exceed our

strategic goals.

We work hard to maintain an inclusive

and sustainable culture, supported by

a comprehensive employee engagement

programme and a well-established

equality, inclusion and diversity strategy.

Supported by robust governance

Rank’s Board and Executives provide a broad mix of skills,

knowledge and experience to meet the Group’s needs,

ensuring it delivers on its strategy.

The Rank Group Plc

Annual Report 2023

Our customers

3,100

We create value for our 3,100k customers by

providing them with market-leading gaming

experiences through our venues, online,

or across both channels.

Our people

7,300

passionate and committed employees.

Our suppliers

1,500

Over 1,500 suppliers, who through meaningful

engagement and collaboration are key in

helping us deliver our strategic aims.

Our communities

283,000

charitable donations made to Carers Trust.

Governments

180.4

generated for tax authorities and

local governments.

Our shareholders

Through our disciplined approach to strategic

delivery and unwavering commitment to safe

and fairer gambling, we are focused on creating

sustainable value for our shareholders.

Stakeholder

value created

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Operating in a highly regulated

market, our focus is on providing

a distinctive gambling experience

that entertains and ensures that

we deliver value to all our

stakeholders.

Regulatory pressures, changing consumer

habits following COVID-19, and the

economic impact of inﬂation have all

had an impact on the industry, with the

potential for further market consolidation.

We believe Rank remains well positioned

to manage the risks arising from these

changes and will seek to beneﬁt from

the opportunities they present.

Changing industry

landscape in the

UK and Spain

is central to our industry landscape, with

the changing interpretation of regulations

by the UK Gambling Commission and

the lack of deﬁnitive guidance putting

pressure on operators in the market.

Our wealth of industry experience means

we have better processes and proprietary

technology solutions in place to support

our business. We have a good working

relationship with the regulators and

welcome the publication of the

Government’s White Paper which sets

out upcoming public policy changes

(read more on pages 28 to 29).

Regulation of the

UK gambling sector

but venues continue to play a huge role

in differentiating our offer in the market.

Since the pandemic, we have seen a

lasting impact on some of our customers,

particularly in older customer segments in

our Mecca venues, but we still enjoy strong

customer loyalty and beneﬁt from our

experience of operating in a competitive

environment. We are using customer

insights to understand how we can

deliver exciting and distinctive

experiences that are engaging, safe and

represent value for money. We continue

to develop new games and formats, build

our digital capability and scale, and

evolve the customer offer at our venues.

Gambling customer

habits are changing

with rising costs of operation (supplies,

utilities, wages) and declining customer

conﬁdence among less afﬂuent customer

segments. Smaller operators are

struggling to adapt, while we are able to

manage our input costs due to our large

scale, and to reallocate resources across

the estate to match supply with demand.

Economic pressures

are a key factor for

the industry

Macro trends

The Rank Group Plc

Annual Report 2023

Our external environment

–

The average Mecca customer age is 44,

while our most frequent customers are

females between 60 and 70 years old.

–

13% of customers are higher

frequency visitors, while 87% are

recreational players.

–

87% of customers only play at venues,

while 13% of our visitors also participate

across digital channels.

Grosvenor venues

The UK’s leading casino chain, Grosvenor

also offers customers great meals, live acts

and non-stop sporting action on larger-

than-life big screens.

A combination of enhanced Safer Gambling

protocols and the post COVID-19 fall in

visitors have resulted in a reduction in the

proﬁtability of the casino sector.

8% of the UK adult population were regular

casino visitors in 2019, but a quarter of

these have lapsed since the pandemic,

with the market yet to fully recover.

The Gambling Act Review represents a

once in a generation opportunity to extend

the appeal of casinos and to modernise our

electronic offering. See pages 28 to 29

for more.

–

The average Grosvenor customer age

is 35. Customers that visit the most are

between 26 and 40 years and those who

spend the most are over 41.

–

A further 6% of adults would consider

visiting a casino if they felt that it would be

a fun, enjoyable, friendly and welcoming

experience while retaining the thrill and

excitement of playing in a casino.

–

The male to female split for Grosvenor’s

customers is 4:1.

Enracha venues

Through Enracha, our Spanish land-based

venues brand, we provide a predominantly

bingo-based gaming experience.

Pub gaming machines and bingo have

declined in Spain in recent years, with

the rise of slot arcades and growth in

sports betting.

On top of this, COVID-19 had a severe

impact on visits to bingo venues while

boosting online gambling channels

to record highs.

Since regulatory restrictions reduced

the size of available prizes customers

now prioritise customer service and

are looking for comfortable and modern

electronic gaming areas, offering games

with customised jackpots and loyalty

card functionality.

–

Enracha’s biggest customer group is in

the 18 to 25 age category – they make up

22% of our total customers, while only

generating 9% of our total visits.

–

People aged over 65 represent just 13% of

our customers, but generate 28% of visits.

–

The most loyal and frequent Enracha

customers are males over 65 years old,

with an average of 1.2 visits per month.

Our markets

Venues

Mecca venues

Highly trusted and community focused,

Mecca is our land-based brand known

for its friendly welcome and the

opportunity to win big.

With the bingo market in decline for a

number of years there is a need to evolve

and create more accessible, modern and

lively venues with exciting food and

beverage offers.

Since the pandemic we have seen a

recovery, but we do not expect the market

to reach pre-pandemic levels for at least

ﬁve years.

The sector has been further impacted by

rising cost pressures. It has become more

polarised, with strong venues doing well,

and others becoming unviable, which will

lead to further consolidation in the market.

Grosvenor Gloucester Road

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

5,010

5,299

5,808

6,674

6,261

6,895

7,343

7,802

8,260

8,626

Digital

UK interactive/digital

The UK’s digital gambling market is fast

moving, competitive and subject to strict

regulation, but is still structurally attractive

in size with clear headroom for us to grow

our brands.

UK digital bingo market

Customers are looking for a safe, secure

and intuitive gaming experience, with

more chances to win and easy pay-outs

when they do. They want a reliable app and

more variety, from promotions that cater

for a wider range of budgets, to the games

and features available.

The experience needs to be more

interactive, offer free-to-play mechanics

that allows money to go further, and come

with safer gambling tools throughout the

customer journey.

–

Signiﬁcant growth opportunity:

20% of the UK population have played

online bingo in the last 12 months.

–

Similar age demographic to venues:

the average online Mecca player is 43

years old, only slightly younger than

that for Mecca venues at 44 years.

UK digital casino market

Customers want exciting and entertaining

experiences, as well as great looking sites

that offer the latest games and strong

promotions. They prefer sites that provide

tools to help them control their spend and

reward loyalty.

They are looking for opportunities to

win big, with swift and seamless payment

of winnings.

–

Opportunities for growth, speciﬁcally

around slots and poker:

20% of the

UK population played online casino

in the last 12 months.

–

Younger age demographic to venues:

the average online Grosvenor casino

player is 40 years old, older than that

for Grosvenor venues at 35 years.

The digital and cross-channel

opportunity for Rank

The UK continues to be a large and

attractive digital gambling market – and

with around 3% market share, there is clear

headroom for us to grow. In Grosvenor and

Mecca, we have leading casino and bingo

brands, as well as proprietary technology

and strong digital marketing capabilities.

With our 116 venues, we are uniquely

placed to provide a cross-channel

experience for both bingo and casino

customers. Cross-channel customers tend

to have higher level of engagement and

loyalty than single channel customers.

And with only 6% of our in-person

customers playing with us both in venue

and online there is signiﬁcant opportunity

to grow our cross-channel customer base.

We will also look to diversify the products

we offer – through sports betting, live

casino and new bingo games. And building

on our existing international operations,

we will explore opportunities for growth

beyond the UK. Over the next 18 months we

will work on the core platform, technology,

data and product developments we need

to unlock these opportunities, including

building the potential to integrate

international digital businesses through

partnerships and/or acquisitions.

Our markets continued

UK Digital Market – Revenue (£m)

+4%

The Rank Group Plc

Annual Report 2023

Our external environment

Continued

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Q&A with

John O’Reilly on

the White Paper

Q. What are the key positive public

policies for Rank that have been

included in the White Paper?

When the Gambling Act Review was ﬁrst

published in late 2020 it sought to ensure

“that there is an equitable approach to the

regulation of the online and land-based

industries”. Reforms for land-based

gambling present the most signiﬁcant

upside for the Group and we are pleased

that, to a large extent, the White Paper

addresses the key issues and opportunities.

We sought modest, but critical,

modernisations for both our casinos and

bingo venues. For casinos, the increase

to the number of gaming machines that

are permitted in 1968 Act casinos is clearly

positive. The commitment to a sliding

scale for gaming machine numbers, based

on the size of venue, ought to ensure that

the vast majority of our venues will beneﬁt

from a greater variety of gaming machines

which will better meet the needs of the

customer. We welcome the policies which

will permit sports betting to be available

in all of our casinos; changes to the

provision of credit for international High

Net Worth customers in our casinos; the

review of electronic payment methods in

land-based venues; and, in bingo, changes

to the ‘80/20’ rule relating to the balance

between Category B3 and Category C

and D machines.

Q. What are the net impacts of the

tightening of regulation for the UK

digital business?

We do not believe that the policy

relating to ﬁnancial risk assessments for

players will have a material impact on the

Group, owing to the work we have already

undertaken to ensure that our customers

are playing at safe levels. Importantly, this

regulatory development will create a level

playing ﬁeld, at least amongst UK licensed

online operators. The Government intends

consulting on a maximum stake for online

slot games and is considering options

ranging from £2 per spin to £15. This

will have a commercial impact on digital

revenues but we would hope that the

threat of driving online customers onto

unlicensed sites will ensure a sensible

outcome for UK consumers.

We are committed to operating in

compliance with all relevant legislation,

regulations and licensing requirements.

The Gambling Act Review

Having launched its review of gambling

legislation in December 2020, the UK

Government published a White Paper

in April 2023, setting out the public

policy changes that will impact the

regulation of the UK gambling sector.

The review has focused heavily on online

regulation but has also assessed the

appropriateness of land-based gambling

regulation, relative to online regulations.

In line with our commitment to offering

industry-leading player protection and

a high-quality experience to all our

customers, we support the Government’s

objective of striking the right balance

between consumer freedoms and choice,

and protection from harm.

2024 –

Expected delivery of

secondary legislation

relating to casino and

bingo modernisation

Later 2023/early 2024 –

UK Government responds

to DCMS and GC gambling

consultations

April 2023 –

publication of

White Paper.

2019 –

All UK political parties

commit to a review of

gambling legislation

in their 2019 General

Election manifestos

July 2023 –

ﬁrst DCMS ad

GC consultations

are launched

December 2020 –

UK Government

publishes White Paper

Call for Evidence.

We work closely with our

regulators in all jurisdictions

to uphold and drive forward

the standards expected of our

industry in an ever-evolving

regulatory landscape.

The Rank Group Plc

Annual Report 2023

Our regulatory environment

Q. What will the impact of a

statutory Levy be on the Group?

We are pleased to see that the

Government recognises the need to take

into account “the differing association of

different sectors with harm and/or their

differing ﬁxed costs.” Land-based casinos

and bingo clubs have signiﬁcant ﬁxed

costs which will mean that any increase

to the current 0.1% of GGY rate that we

are forced to pay will disproportionately

impact them, relative to digital operations.

Through the BGC, we have proposed a

sliding scale for casinos which will see

levy payments increase to 0.4% of GGY

over a four-year period. We would hope

that the current 0.1% of GGY contribution

from land-based bingo will be maintained,

reﬂecting the limited risk of problem

gambling and the importance of these

social facilities within local communities

across the UK.

Q. How many more B1 machines

do you expect to see across

the Grosvenor estate as a result

of the public policy on gaming

machine numbers?

We currently have 1,365 B1 machines

across the Group and expect that, once

fully implemented, we will have 2,614

machines in our venues, representing a

doubling of B1 gaming machine numbers.

Q. What will be the impact of

the public policy relating to the

reallocation of unused 2005 Act

casino licences?

The Government intends to introduce

a process to ensure that the unused 2005

Act casino licences can be reallocated to

other local authority areas if an authority

awarded a 2005 licence opportunity no

longer wishes to use it. Many of the nine

unused 2005 Act casinos are in permitted

areas which would simply not be viable to

support a casino. There are relatively few

areas within the UK which could support

a new casino development but there are

opportunities, and we will be keen to

review them once the process for their

potential reallocation is understood.

Q. Does the policy relating to

providing credit for international

High Net Worth (‘HNW’) customers

in casinos make any difference

to Rank?

Yes. We cater to international high net

worth customers in a number of venues,

primarily in London, who are captured by

this potential legislative change. Today the

international customer visiting the UK

typically provides a cheque to cover their

intended play at the start of their visit. The

casino holds the cheque and the customer

settles through the banking system when

they return home, or the casino processes

the cheque. Elsewhere around the world,

casinos provide a credit facility, but

this is not permitted under the 2005 Act.

Banks are phasing out cheques, and fewer

customers are carrying cheque books, both

of which are having the impact of making

the UK less competitive as a destination

for international casino customers. We are

pleased that the White Paper recognises

the important need for UK casinos to be

able to provide a short-term credit facility

to High Net Worth international customers.

This policy change does, however, require

the use of parliamentary time for primary

legislation to amend the 2005 Act and that

makes it more challenging for Government

to implement.

Q. To what extent can the public

policies which impact Rank be

delivered by secondary legislation

or via changes to Licence

Conditions and Codes of Practice

(‘LCCP’), rather than the need for

primary legislation?

We purposefully pursued a series of

modernisations which could, in the main,

be delivered via secondary legislation.

The bulk of land-based modernisations

in the White Paper, namely changes

to the numbers of gaming machines in

our casinos, permitting sports betting in

casinos and amending the 80:20 rule to a

new 50:50 rule in our bingo clubs can all

be delivered by secondary legislation. Many

of the policies in the digital space which

amount to a tightening of regulation will

be made through changes to regulations

in LCCP following Gambling Commission

consultation, although the policy pertaining

to maximum limits for online slots will

require secondary legislation.

Q. What are the risks in the

White Paper?

The critical issue now will be the timing

of implementation of the various public

policies. There will be some that are likely

to involve increased costs (establishment

of an Ombudsman, statutory Levy for

research, education and treatment,

potentially higher licensing fees), but we

believe the overall package of measures

will be net positive for the Group. It will

therefore be important that the positive

policies are implemented as swiftly as

possible in order to offset extra costs.

John O’Reilly

Chief Executive

“

The critical issue now

will be the timing of

implementation of the

various public policies.”

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Our strategy is focused on

generating long-term sustainable

shareholder value. We have made

considerable progress which

ensures signiﬁcant opportunity

in the next phase of the plan.

To ensure we deliver on our purpose,

we have set out clear aspirational plans

that form our strategic intent. For now,

we are investing for growth to at least

return Grosvenor to its 2019 proﬁtability

levels, and to right size our Mecca estate.

By improving talent and capability in

critical areas and implementing our new

RIDE platform, we will lay the foundations

for international expansion, as well as

improve our digital proposition.

In the medium term we will balance

investment and returns as we implement

the outcomes of the Gambling Act Review,

test international expansion concepts,

and increase the digital percentage of

our revenues. In the longer term, we will

seek to maximise returns by driving our

international revenues and progressively

building shareholder returns.

Our strategic intent

The Rank Group Plc

Annual Report 2023

Our strategy

Details on

associated risks

can be found on

pages 82 to 87.

Strategic

pillar 1

Strategic

pillar 2

Strategic

pillar 3

Provide a seamless

and tailored experience

for customers across

venues and online.

Drive digital growth

technology and live play

credentials.

Continuously evolve

our venues estate with

engaging propositions

that appeal to both existing

and new customers.

How this is measured

–

Percentage of venues customers

that play with us online

–

Percentage of digital NGR from

cross-channel customers

How this is measured

–

Digital NGR

–

Digital customer numbers

How this is measured

–

Venues customer numbers

–

Venues strategic investment

–

Venues Net Promoter Score

Associated risks

Strategic

pillar 4

Strategic

pillar 5

Be passionate about the

development and well-

being of our colleagues and

the contribution we make

to our communities.

Build sustainable

relationships with our

customers by providing

them with safe

environments in which

to play.

How this is measured

–

Employee Net Promoter Score

–

% females in senior management

–

Emission intensity ratio

–

Total charitable funds raised

How this is measured

–

Safer gambling eNPS score

–

Customer feedback score

on safer gambling

–

% UK digital customers using

safer gambling tools

Associated risks

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Strategic

pillar 1

Provide a seamless

and tailored experience

for customers across

venues and online

In the markets in which we operate,

Rank is one of the few gaming companies

in a position to provide customers with

a genuine one-brand gaming experience

across both venues and online. Our key

assets are our 116 venues, our membership-

based models, our customer relationships

and the high levels of engagement that our

team members enjoy with our customers.

What we said

What we did

Further develop the app strategy

for each brand ensuring customer

needs are met for both online

and in-venue experiences,

removing the need for customers

to move across multiple mono

channel apps.

–

We have created our app strategy focused on delivering a deeper brand

experience. We have initiated a programme of work to consolidate and improve

our mobile apps over the next 12-18 months.

Launch live streaming from a

further four Grosvenor casinos to

our online audiences and deliver

improvements to the digital live

roulette experience.

–

We have launched our live streaming product ‘Live and Direct’ into our Glasgow,

Shefﬁeld and Nottingham casinos. We have also launched variants of the games

taking our live streaming from venue portfolio from one to ten games.

Introduce artificial intelligence

to better drive personalisation for

our Grosvenor sports and gaming

customers showing offers, bets

and homepages tailored to

their behaviour.

–

We have introduced our ‘Graphyte’ personalisation engine which allows us to identify

customer traits and preferences and create and test insight-based campaigns across

marketing channels to optimise the customer experience.

Continue to deliver compelling

Mecca offers focused on

driving new customer acquisition

and retention.

–

Three key offers were launched in the year – ‘Mecca Perks’, a stamp card for venues

visits with digital rewards; ‘Mecca Bestie’, where customers win additional prizes

if their ‘bestie’ wins and the popular ‘Everyone’s a winner’ campaign.

–

We continue to develop further advanced cross-channel rewards programme

for our Mecca customer base.

Launch unified Mecca membership

across online and in venues that

will bring real time communication,

personalised content, cross sell

and improved onboarding.

–

We have launched our Mecca single sign-up journey which automatically creates

a venues membership for new and existing meccabingo.com customers, enabling

channel agnostic communication, content and tailored experiences.

Introduce a new Mecca loyalty card

embedded into our apps and single

membership journey aligned to our

single app strategy.

–

Mecca Perks, a brand led loyalty scheme with digital and in venue rewards, launched

in the year. Further development of our single membership and apps will unlock

enhanced Mecca loyalty and reward functionality.

The Rank Group Plc

Annual Report 2023

Our strategy

Continued

Focus for 2023/24:

–

Introduce via our proprietary technology

platform single uniﬁed membership for

Mecca online and venue customers.

–

Delivery of single apps for each brand

ensuring customer needs are met for

both online and in-venue experiences.

–

Delivering further venues content

online, allowing customers to virtually

tour our venues and bringing the

venues atmosphere online through

dynamic content.

–

Further development of our

personalisation capabilities, delivering

the right content, at the right time to

the customer.

–

Continue to deliver our cross-

channel live casino offering through

shared jackpots, game variants and

customer experiences.

–

Deliver gamiﬁcation and personalisation

of rewards through retention and

product recommendations relevant

to the customer and reward players

for engaging at a brand level.

–

Relaunch our improved joint liquidity

bingo game ‘Fortune’, enabling

seamless play in venue or online

with community jackpots.

KPIs

Percentage of venues customers

that play with us online

Grosvenor venues (0ppts)

Mecca venues (0ppts)

Enracha Venues (0ppts)

Percentage of digital NGR from

cross-channel customers

32%

Grosvenor venues (-2ppts)

20%

Mecca venues (-3ppts)

Enracha Venues (+1ppts)

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Strategic

pillar 2

Drive digital growth

technology and live play

credentials.

We have built strong positions in venues-

based gaming which we are seeking to

replicate across our digital channels. In

2022/23, our digital operations generated

30% of Group revenue. Across the UK as a

whole, digital channels represented around

65% of the gambling market (excluding the

National Lottery) pre-pandemic, presenting

a signiﬁcant growth opportunity.

What we said

What we did

Migrate grosvenorcasinos.com

onto our RIDE platform.

–

We migrated Grosvenorcasinos.com to our RIDE proprietary platform in September

2022, completing our Group-wide migrations onto the Stride platform enabling us to

deliver a host of innovative customer-oriented improvements. Following the migration

we rebranded Grosvenorcasinos.com with a modern and vibrant look and feel which

is to be extended across our Sports and Poker offers.

Enhance Grosvenor’s Daily

Retention Game offering our

customers greater variety and

range of prizes.

–

We have launched a full suite of Daily Retention Games across all Rank brands,

offering a variety of mechanics and prizes including bespoke variants such as

Beat the Timer, Everyone’s a Winner, Winfall, Scratch and Win and Loose Woman.

Launch the streaming online of live

immersive events in our Mecca

venues to help drive cross-channel

acquisition.

–

We enhanced our Mecca TV proposition with celebrity presenters hosting

main event bingo games on Friday nights and streaming in venue events

such as Bonkers and Players Bingo.

Deliver the significant development

roadmap which follows the

migration of Grosvenor onto the

RIDE platform.

–

The Grosvenor migration to our RIDE proprietary platform unlocked cost synergies

relating to technology services, cloud hosting, marketing and player protection tools.

–

With the migrations completed, our in-house resource was able to switch focus on

delivering customer journey improvements such as greater personalisation, improved

customer journeys, launch of improved games and game variants (Live and Direct,

Loose Women Bingo), and delivering improvements to our safer gambling monitoring.

Launch a new Spanish sports

betting site YoSport.

–

YoSport was successfully launched in September 2022 and to provide sports betting

to the Spanish market.

Launch new apps for YoCasino

and YoSport in Spain.

–

Both android apps were launched in Q4 2022/23 and further work is underway

to enable promotion in Google Play.

Roll-out a cross-channel strategy

for Enracha.

–

A soft launch to selected customers will be launched towards the end of 2023/24.

Launch YoBingo in Portugal

to replicate the successful

YoBingo model.

–

Good progress is being made in the homologation of our YoBingo.pt site by SRIJ,

Portugal’s regulator and we hope to be now launching this new service in the

coming months.

Upgrade the proprietary

Yo technology platform.

–

The ﬁrst phase of this development, a new bingo module, will be launched

in Q2 2023/24.

The Rank Group Plc

Annual Report 2023

Our strategy

Continued

KPIs

Digital NGR

£172.7m

UK (+10%)

£30.2m

International (+16%)

Digital customer numbers

1,153k

UK (+14%)

48k

International (+2%)

Focus for 2023/24:

–

Continue to build out our core RIDE

platform scalability and enhance

its resilience to support our

growth ambitions.

–

Enhance our sportsbook capabilities

through onsite content and bonusing

improvements so we become the

sportsbook of choice for our customers.

–

Scale marketing investment through

key channels to drive brand awareness

and customer consideration.

–

Further investment into our Safer

Gambling tools and measures.

–

Enhance our monitoring and player

protection capabilities whilst delivering

excellent customer experience.

–

Launch a daily live online bingo

experience at YoBingo.es.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Strategic

pillar 3

Continuously evolve

our venues estate with

engaging propositions

that appeal to both existing

and new customers.

Our casino and bingo venues provide

entertainment for millions of customers

each year and generate the majority

of the Group’s revenue and proﬁts.

By continuously evolving our venues

(in terms of product, environment and

service) and by creating new concepts, we

are constantly enhancing the experiences

that we offer our customers, whether they

be existing or new.

What we said

What we did

Launch of new rewards and

incentives programme for our

Grosvenor venues.

–

During the year we altered our marketing approach, by focusing on fewer larger

national campaigns, marketing activities to more local and personalised promotions

and rewards, ensuring they are more relevant for each casino’s customer base.

Continue the development and

refurbishment of the Grosvenor

estate with 12 venues listed for

refurbishment in 2022/23.

–

Three major refurbishments were completed in the year at our Merchant City casino

in Glasgow and at the Gloucester and Bayswater casinos in London, in addition to two

smaller refurbishments at our Southampton and Brighton casinos. We also upgraded

the ‘back of house’ team member areas in ﬁve of our Grosvenor casinos, with further

to be completed in 2023/24 and upgraded air conditioning across 15 of our casinos,

including delivering signiﬁcant improvements in energy efﬁciency.

Launch of a new electronic roulette

jackpot game, Going for Gold,

across our Grosvenor estate.

–

Going for Gold was successfully rolled out across 900 terminals in the Grosvenor

estate and is proving to be very popular with our casino customers.

Focus on improving the slots

performance of our Mecca venues

through a better product mix and

presentation in venue.

–

Through the introduction of new machine suppliers, we have been able to broaden

the range of slot machines available to our Mecca customers. We have also optimised

the slot area layouts in a number of venues and commenced a programme of

refurbishments of the slots areas in a number of our Mecca venues.

Investigate opportunities to share

space in our Mecca venues through

complementary partnerships and

collaborations with third parties.

–

To date, we have been unable to secure a suitable party which complements

and enhances the experience for our Mecca customers. Further opportunities

are under review.

Continue the Enracha venues

investment programme in our

Andalucía and Sabadell venues.

–

We are currently at the planning approval stage to refurb our venues in Seville

and Sabadell. We hope to complete both projects in 2023/24.

Consider prospective opportunities

to continue growing in the Spanish

market through targeted

acquisitions.

–

We have reviewed a number of prospective acquisition targets in the year but

valuations are high and the Group’s priority has been to ensure we retain a strong

balance sheet position during this period of high costs of debt ﬁnancing.

Deploy player tracking and new

jackpots in each Enracha venue

to improve customer experience.

–

Player tracking is live in seven venues. New jackpot displays are live in four venues.

Full deployment of our Enracha

venues loyalty card into all

permitted venues.

–

Live across the estate with the last permitted venue in the Enracha venues estate

deploying the loyalty card system in September 2023.

The Rank Group Plc

Annual Report 2023

Our strategy

Continued

Focus for 2023/24:

–

Continue to build on our strong Mecca

slots performance by refurbishing

an additional 20 slots areas in our

key venues.

–

Continuing with our external

redevelopment programme, with 16

Mecca venues to be upgraded by the

end of 2023/24.

–

Improving the visibility of our venues

online with more informative and

up to date venues related information.

–

Refurbish the external of 12 of our

Grosvenor venues in order to improve

kerb appeal and help drive consideration

from non-casino customers.

–

Complete major refurbishments at our

Leicester and Portsmouth casino and

begin a scheme at our ﬂagship casino,

The Victoria in London.

–

Complete the detailed planning for the

implementation of the land-based bingo

and casino reforms contained within

the UK Government’s white paper.

–

Complete refurbishments in Enracha’s

Seville and Sabadell venues.

KPIs

Venues customer numbers

1,044k

Grosvenor venues (-1%)

637k

Mecca venues (0%)

270k

Enracha venues (+34%)

Venues strategic investment

£13.1m

Grosvenor venues (+11%)

£3.7m

Mecca venues (0%)

£0.6m

Enracha venues (+50%)

Venues Net Promoter Score

+57

Grosvenor venues (0)

+78

Mecca venues (+17)

+36

Enracha venues (-9)

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Strategic

pillar 4

Be passionate about the

development and well-

being of our colleagues and

the contribution we make

to our communities.

What we said

What we did

Launch refreshed three-year

ED&I strategy across the Group

focused on ensuring the Group

is recognised as an employer of

choice by attracting, developing

and retaining a truly diverse

pool of talent.

–

During the year, a simpliﬁed ED&I strategy was agreed. Further detail is available

in the sustainability section.

–

The Group also appointed a new Head of Learning, Engagement and Inclusion.

One of their key areas of focus is the development and implementation of the Group’s

ED&I strategy. Further progress is expected in 2023/24.

Expand the reach of the

Group’s ED&I colleague network

groups and launch the Group’s

first neurodiverse colleague

network group.

–

Numerous network group events were held during the year, maintaining the Group’s

focus on ED&I.

–

Further development of new network Group’s is planned for 2023/24.

Launch and embed the newly

developed Group-wide EVP

Work. Win. Grow.

–

During the year, key projects such as a full review of the Group’s people policies,

an overhaul and relaunch of the Group’s careers website and the implementation

of a new payroll system were delivered under the Work.Win.Grow. programme.

Continue the development of the

Group’s net zero plan and look to

set intermediate targets to lower

the Group’s carbon emissions and

use of other natural resources.

–

The Group has set an intermediate target of net zero for its global Scope 1, 2 and

selected Scope 3 emissions by 2035 supported by a robust action plan.

–

Rank aims to be net zero globally across all scopes by 2050.

We continue to build a high-performing

culture through the engagement and

development of colleagues who want to

put exciting and entertaining customers

at the heart of what they do. We strive for

a culture of ownership and transparency

that empowers our teams to achieve goals

they did not think possible and to be the

very best that they can be. We are also

acutely aware of the role our venues,

support ofﬁces and colleagues play in

the communities in which we operate and

together as a collective organisation we

strive to add value wherever possible.

The Rank Group Plc

Annual Report 2023

Our strategy

Continued

Focus for 2023/24:

–

Improve the delivery and content

of colleague development courses

and training across the Group.

–

Implementation of an improved

communication and engagement

strategy.

–

Ensure Group policies are modern and

global to better reﬂect the current and

future business needs.

–

Delivery of the further energy efﬁciency

programmes in line with the Group’s

net zero plan.

–

Roll out of a Group-wide engagement

programme centred on the Group’s

environmental ambitions.

KPIs

Employee Net Promoter Score

+14

(+12)

% females in senior management

35%

(+8ppts)

Emission intensity ratio

36.6

tCO

e per £m NGR

(-12%)

Total charitable funds raised

£0.3m

(0%)

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Strategic

pillar 5

Build sustainable

relationships with our

customers by providing

them with safe

environments in which

to play.

What we said

What we did

Continue to refine and improve

the holistic player protection

model in our Grosvenor venues.

–

Signiﬁcant investment was made in the year in improving our player protection model,

with over 10,000 training modules delivered to Grosvenor colleagues.

Improve the tools available to

Grosvenor venues colleagues

to make decision-making more

efficient and effective.

–

A new risk app was launched that allows our colleagues easier access to information

for faster decision-making and customer interaction.

Review and improve our digital

customer onboarding journeys

to remove unnecessary friction

caused by ‘know your customer’

and player protection processes.

–

Signiﬁcant further improvements have been delivered to improve customer

‘safer gambling’ journeys and improve customer response rates to requests

for affordability information.

Completion of role appropriate

enhanced safer gambling training

supported by GamCare to over 1,100

colleagues. The training is aimed

at developing the necessary skills

required to have more meaningful

safer gambling interactions with

our customers.

–

We have made further progress in the year, with 743 additional team members

completing the enhanced safer gambling training.

Continue to develop our markers of

harm model as part of a continuous

improvement and evaluation of

player protection risk models.

–

During the year, we developed automated marketing and bonusing suppression

technology delivered through our proprietary Hawkeye monitoring platform.

–

This new functionality allows us to suspend bonus offers and promotional marketing

where a customer is showing indication of potential harmful behaviour.

Work towards achieving GamCare

safer gambling accreditation

across our UK operations.

–

During the year, Rank was awarded Gamcare Level 2 accreditation for Mecca venues

and the UK digital business. The review of Grosvenor venues is ongoing.

Millions of customers regularly enjoy

the fun and excitement of gambling,

but we recognise that a small percentage

of customers can be at risk of problem

gambling and a smaller number of people

can suffer harm through excessive

gambling. We recognise the importance

of continuous innovation to reﬁne our

approach to making gambling as safe

as possible thus ensuring we create and

maintain sustainable relationships with

all our customers.

The Rank Group Plc

Annual Report 2023

Our strategy

Continued

KPIs

Safer gambling eNPS score

+53

(+2ppts)

Customer feedback score

on safer gambling

82%

Grosvenor venues

83%

Mecca venues

73%

UK digital

Scores were not recorded prior to 2022/23.

Enracha venues and our Spanish digital

business will start to seek customer

feedback in 2023/24.

% UK digital customers using

safer gambling tools

43%

(+7ppts)

In our Grosvenor and Mecca venues,

safer gambling tools are available on

gaming machines, however we are unable

to track usage of these tools amongst our

customer base.

Focus for 2023/24:

–

Deliver changes outlined in the

Gambling Act review for the UK digital

business, speciﬁcally around

affordability, slots staking, game design

and marketing preferences.

–

Enrol in the GamProtect scheme,

introducing safer controls across

UK gambling operators.

–

Continue to progress Gamcare

accreditation for our Grosvenor venues.

Grosvenor Bayswater

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Act 2006. This was particularly relevant

in relation to its discussions and decision-

making on, (i) maintaining oversight of

the implementation of the Group’s strategy,

(ii) management of costs and liquidity,

and (iii) capital investments key to the

longer-term success of the Group,

each as described on pages 100 to 101.

The Board, with support of the Executive,

performed its duties by ensuring matters

reserved and discussed included:

–

review and consideration of the Group’s

strategy, particularly in view of the

uncertain trading conditions and

inﬂationary cost pressures. Please see

pages 14 to 21 for more information.

–

the focus and continued development to

embed ESG across the business, placing

ESG at the forefront of business led

decision-making. Please see pages 52

to 71, and 43 to 44 for more information.

–

assessing capital expenditure

opportunities presented by the business

against all stakeholder interest. Please

see pages 43 to 44 for more information.

–

review regularly the Group’s risk

management processes and controls

and ensured the key risk areas for the

business were considered, taking into

account the macroeconomic conditions.

Please see pages 80 to 87 and 109 to 116

for more information.

–

consideration of stakeholder interests

and engagements carried out through

the year, which included impact

of the wider economic conditions.

Please see pages 14 to 21 and 43 to 44

for more information.

–

kept informed of the regulatory

landscape impacting the Group,

particularly relevant in respect of

legislative changes announced by the

UK Government’s White Paper and as the

process moves to consultation. Please

see pages 28 to 29 for more information.

–

kept informed of colleague sentiment

and culture through our Designated

Non-Executive Director for workforce

engagement. See more on page 102.

Section 172 factors

S172 factor

Relevant disclosure

The likely consequences of

any decision in the long term.

Company purpose (see inside cover

and pages 96)

Our business model (pages 22 to 23)

Our strategy (pages 30 to 41)

Engagement with regulators and

legislators (page 48)

The interests of the Company’s

employees.

Colleagues (pages 55 to 56)

Inclusion and diversity (page 56)

Colleague engagement (page 46)

Non-ﬁnancial reporting (page 89)

The need to foster the Company’s

relationships with suppliers,

customers and others.

Customer engagement (page 46)

Supplier engagement (page 49)

Engagement with regulators and

legislators (page 48)

Responsible payment practices (page 49)

Anti-bribery and corruption (page 52)

Modern slavery (page 49)

The impact of the Company’s

operations on the community

and the environment.

Community engagement (page 47)

Approach to ESG & Safer Gambling

(pages 52 to 71)

TCFD disclosures (page 61-70)

Rank Cares (pages 47 and 71)

The desirability of the Company

maintaining a reputation for high

standards of business conduct.

Brands (pages 8 to 9)

Culture and values (pages 38 to 39,

55 to 56, and 102 to 103)

Engagement with regulators and

legislators (page 48)

Whistleblowing (page 52)

Internal ﬁnancial controls (page 112)

The need to act fairly between

members of the Company.

Shareholder engagement (page 49)

Annual General Meeting (page 93)

Rights attached to shares (page 150)

Voting rights (page 150)

Section 172 statement

In accordance with Section 172(1)

Companies Act 2006, the Company’s

Directors must act in a way that they

consider, in good faith, would be most likely

to promote the success of the Company for

the beneﬁt of its members as a whole, and

in doing so have regard (amongst other

matters) to the range of factors set out in

section 172(1)(a) to (f) of the Companies Act,

including the interests of stakeholders.

Many of the Board’s principal decisions

were taken in direct response to the

continued uncertain trading conditions,

along with the turbulent impact of

inﬂationary pressures and the cost

of energy during the year. In taking

such decisions it carefully considered

stakeholders, the information it received

through colleague and customer

engagement, and how each such decision

would impact on the success of the Group,

with due regard to the other matters set out

in section 172(1)(a) to (f) of the Companies

The Rank Group Plc

Annual Report 2023

How we create long-term value

Principal decision:

Mecca estate management

Context

During the year, the Board and

management were focused on enhancing

the sustainability and proﬁtability of the

Group following a slower than expected

start to the ﬁnancial year and the impact

of inﬂationary cost pressures. One such

area of focus was the long-term shape and

sustainability of the Mecca venues estate.

The land-based bingo sector suffered

a severe downturn as a result of the

pandemic lockdowns and the industry

emerged with a smaller customer base and

consequently weaker prize boards, which

in turn impacts the ability to attract new

customers. Across the sector, there have

been too many bingo venues relative

to the customer demand and this was

impacting on the sustainability of the

Mecca venues business.

Decision-making process

Bingo venues are social amenities which

play a very important role within their

local communities and the decision to

close is not taken lightly.

Following the appointment of Andy Crump

as the Mecca Managing Director in May

2022, a full review of the Mecca venues

estate was undertaken to determine which

venues had a viable business model for the

long term. The review included a detailed

assessment of the growth levers available

in local markets to create long-term value

and ensure that the customer proposition

remained relevant into the future. Other

factors in the analysis included historical

proﬁtability and expected future

proﬁtability, remaining lease term, the

condition of the venue and associated

costs required to maintain and improve

the presentation of the venue to customers,

ability to retain existing staff and recruit

new team members to improve

performance, existing levels of customer

satisfaction and feedback from customers

on what they would like to see improved

in the venue.

In September 2022, Andy presented his

detailed plans to the Board and these were

subsequently revisited in March as part

of the strategy day. His plans included

proposals to close a number of venues

across the Mecca estate.

The Board challenged the Mecca

managing director and wider management

team to ensure that it had considered all

key stakeholders that would be impacted

by the decision to close the venues.

In particular, the role Bingo venues play

as social amenities in their local area was

of particular focus, along with the impact

on existing employees. The Board were

pleased to see that as a result of strong

collaboration across the business and

that there was a well-executed plan for

rationalisation, including the redeployment

of colleagues wherever possible, and

equally there was planned investment

in the remaining Mecca clubs to ensure

they had as bright a future as possible.

The Board recognised that the 15 venues

proposed for closure during the year had

been given every opportunity to recover

and return to proﬁtability and that on

balance, closure was the only appropriate

course of action to ensure the long-term

viability of the business.

The Board, and through its delegated

authority to the Finance Committee,

reviewed and approved club closures

and investment expenditure for

operational clubs.

Key stakeholder considerations

The following key stakeholders were

considered and formed part of the

decision-making:

Our colleagues

– the Board and

management were sensitive to colleagues

as clubs closed, ensuring an appropriate

consultation process was followed.

Management aimed to retain and redeploy

existing colleagues wherever possible,

including in the Grosvenor venues estate

if possible.

Our customers

– visit numbers and

customer feedback was a key component in

the decision-making process. The business

has a targeted local plan to retain existing

customers and attract new visitors,

however, this was not sufﬁcient to deliver

the required improvement in proﬁtability.

A targeted marketing campaign was put

in place to transfer as many existing

customers as possible to nearby clubs and

the digital offering was also highlighted for

those customers that might alternatively

choose to play with Mecca online.

Our communities

– the Board was

mindful of the potential impact of the

closures on the local communities.

Regulators and legislators

–

management were very focused on

maintaining compliance and promoting

safer gambling within our venues.

Shareholders & Investors

– the Board

were focused on creating long-term

shareholder value and ensuring a

sustainable and proﬁtable Mecca estate

is a key part of this.

Suppliers

– we worked collaboratively

with suppliers to ensure they understood

the impact of our estate rationalisation,

giving appropriate notice to ensure their

resources could be redeployed post the

closure of a venue.

Key ESG considerations

Colleagues

– maintained clear

communication and engagement during

the consultation and closure processes.

Responded to colleague feedback received,

particularly mindful of strategic changes

within clubs and which landed either

positively or negatively.

Customers

– engaged through surveys to

receive feedback and inform content and

messaging, including impact of closures.

Ongoing research which included

changing motivations and cost of living

crisis impact.

Environment

– working with landlords,

management of club exit strategy and

delivering against energy efﬁciency plans.

Suppliers

– negotiations with landlords

as part of club exits and where possible

re-negotiations on improved lease terms

to avoid closure.

Actions and outcomes

The Board and through its delegated

authority to the Finance Committee

approved:

–

each of the club closures, factoring

all stakeholder considerations.

–

key Group contracts in the year which

impact the Mecca estate, including

that of waste management and facilities

estate management. Contracts that

beneﬁted Mecca also included food and

beverage and technology investment.

–

continued to keep oversight of the

Mecca health and safety audits.

–

broader investment in improving

the appeal of our Mecca venues.

Impact of these actions on the

long-term success of the Company

As a result of the actions taken in the year,

the Mecca business is better equipped

to focus its costs, people and investments

into its clubs across the estate and focus

on key investment decisions that will

beneﬁt all its stakeholders. This will

improve the customer proposition, increase

the beneﬁt within its wider community and

incentivise our colleagues, adding to the

long-term success of the Group.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Principal decision:

Contract for Facilities

Management Services

Context

Since 2021, Rank has outsourced its

facilities management services for the UK

venues estate to an external third party.

This allows our venues management teams

to focus on exciting and entertaining their

customers and ensures all activities are

provided by a single professional provider.

After a thorough review of Rank’s facility

management requirements and the

performance of the incumbent supplier,

the management team proposed to

transition the facilities management

contract for the UK venues estate

to a new supplier.

A broad internal team were consulted as

part of the project to ensure the process

was well managed, delivered to plan and

all stakeholder views were considered.

Decision-making process

The decision to transition the facilities

management contract to a new supplier

was based on a broad range of factors:

–

Feedback from local management teams

identiﬁed that there were opportunities

for improvement in the way our venues

estate assets were managed.

–

Energy prices had seen signiﬁcant

increases in a relatively short space

of time and management felt there was

more we could do to improve the energy

efﬁciency of our venues.

–

There was some feedback from

customers and colleagues that certain

venues were not being maintained to an

appropriate standard and that this was

impacting on the customer experience.

A number of factors were considered when

determining whether to remain with the

incumbent supplier or switch to an

alternative. They include:

–

Total cost of the services being

provided, including any transition costs

of moving to an alternative. Overall, the

aim was to secure best value for money,

including quality of service, rather than

lowest possible cost.

–

Capability of workﬂow management

systems to allow our venues

management teams to see the status

of all facilities management activities

in one place.

–

The asset management and energy

monitoring capability of the various

potential suppliers to ensure we manage

the company’s assets effectively over

the long term.

–

The requirement to ensure our venues

remain compliant with legislation and

regulation (e.g., health and safety)

at all times.

–

The relevant experience and track

record of the alternative suppliers

–

If we were to change suppliers, the need

to do so as part of an orderly transition

so the continuity of service and

customer proposition in our venues

was not affected.

When reviewing the proposal to move to an

alternative supplier, the Board challenged

the management team on a number of

factors including, but not limited to,

(i) the welfare of colleagues and customers,

(ii) the cost and quality of service that was

being provided, (iii) the environmental

opportunity that can be realised if our

venues estate was more energy efﬁcient,

and (iv) the requirement for venues to

be compliant at all times.

Key stakeholder considerations

The following key stakeholders were

considered and formed part of the

decision making:

Customers

– colleague feedback was

critical to determining where we could

improve the provision of facilities

management services. Providing local

management teams access to systems that

enable them to review job status, authorise

access to venues and ensure work was

completed on time was a key consideration

in the decision-making process.

Our people

– the need to keep our customers

safe whilst in our venues and keeping

venues operational and pleasant locations

for customers to spend their leisure time.

Communities

– mindful of each venue’s

impact on the local environment.

Regulators and legislators

– ensuring

our venues estate remains compliant with

all legislation and regulations.

Shareholders & Investors

– execution

of strategic aims in the long-term by

improved condition of UK venues and

increase visibility of environmental impact

of our venues, with a view to reducing this

over time.

Suppliers

– ensure we work in sustainable

partnership with the new suppliers so that

venues get the best possible value for

money. Ensure there is an orderly transition

from the incumbent supplier and they have

sufﬁcient notice to redeploy resources.

Key ESG considerations

Leveraging the asset management and

energy monitoring technology that can

support reduction of energy consumption

over time, without impacting on the

customer proposition.

Actions and outcomes

The Board approved the new facilities

management service provider and the

relationship formally commenced in the

second half of the ﬁnancial year with the

following improvements:

–

40 venues have now rolled out 600

Prism energy monitoring devices

–

improved visibility of job status

and progress.

–

identiﬁcation of long-term cost saving

opportunities as assets are better

maintained.

–

identiﬁcation of energy efﬁciency

opportunities through the replacement

of aged appliances and equipment

–

developed colleague training on new

environmental technologies with roll out

in 2023/24.

–

40 venues now equipped to support

reporting on energy consumption with

the remaining venues to be rolled out

during 2023/24 and 2024/25.

Impact of these actions on the

long-term success of the Company

A fundamental step that enables the Group

to improve asset management and energy

efﬁciency across the UK venues estate.

The new contract supports the Group’s

pathway to net zero by 2050.

“

A fundamental step

that enables the Group

to improve asset

management and energy

efficiency across the UK

venues estate.”

The Rank Group Plc

Annual Report 2023

How we create long-term value

Continued

While the majority of engagement

with stakeholders takes place within the

business divisions and is led by divisional

management, the Board engages directly

with certain stakeholders. The Directors

are also kept regularly appraised of all

stakeholders’ views through divisional

reports to the Board, so that Directors are

able to have regard to such views in their

decision-making, as illustrated by

reference to various stakeholders’ interests

in our Section 172(1) statement on page 42

and the case studies on pages 43 and 44.

We also engaged with key stakeholders

in conducting the materiality assessment

that shaped and informed our ESG

strategy (For more information, see the

Sustainability Report 2023, www.rank.com

for more information).

Understanding and balancing the

respective needs and expectations of our

stakeholders over the past year has been

as important as ever and we remain

committed to doing so.

Stakeholder engagement

Our long-term success must take

account of what is important to our

key stakeholders. By our proactive

engagement, this will help us to

identify and focus on the issues that

matter most, and allow us to factor in

our stakeholders’ views into effective

decision-making.

Active stakeholder engagement

is a key part of how we effectively

manage risks and unlock

opportunities.

Strategic report

Governance report

Financial statements

Overview

The Rank Group Plc

Annual Report 2023

2022/2023 highlights

–

Sought local insights through intercept

interviews following our rebranded and

refurbished Grosvenor Merchant City

casino in Glasgow.

–

Simpliﬁed the delivery of customer

views and experiences to our Venues

teams, this ensured they were well

equipped with a holistic understanding

of our customer’s views to improve the

customer venue experience.

–

Participated in a leisure industry

study to measure the impact of the

‘cost of living’ pressures.

–

Conducted customer research to

determine motivations behind change

in customer behaviours.

–

Sought customer views through surveys

on our food and beverage offerings,

including price sensitivities.

–

Utilised our programmes to monitor

our cross-channel offers and journey

for venues to digital players.

2022/2023 highlights

–

Regular communication Group-wide by

way of our Get Connected programme,

which continued to evolve during

the year.

–

A review of communications and

engagement platform has also taken

place and new technology will be

implemented in 2023/24.

–

Social media forums for Grosvenor

and Mecca colleagues to express views

and share news.

–

Monthly Town Hall meetings with

Q&A sessions available to colleagues

in all jurisdictions to attend, and which

included a regular rotation of updates

from each of our businesses, of

regulatory news, along with people

& culture initiatives.

–

Employee Voice meetings attended

by elected representatives from the

business, the Chief Executive and

Chief People Ofﬁcer.

–

Talking STARS and Leading STARS

forums held and attended by the

designated Non-Executive Director.

–

Conducted a full Employee Opinion

Survey in October 2022 and a ‘pulse

survey’ in May 2023 and implemented

action plans following a review of

results. Follow up sessions were held

to improve visibility of changes coming

out of the action plans.

–

Undertook a qualitative deep dive

amongst our digital customers to

determine Rank’s position amongst

our competitors.

–

Carried out a small quantative study

which sought to provide insights into

the range of our customer proﬁle,

to better understand what they are

looking for in the Rank experience.

–

STARS values awards continued to

recognise individuals and/or teams for

demonstrating Rank’s values in their

work, nominated by their peers.

–

Continued to focus on our six ED&I

colleague network groups: Wellbeing;

Women; Racial Equality and Diversity;

LGBT+; Families; and general ED&I

(incorporating religious celebrations).

–

Introduced a range of activities and

initiatives to make sure that our

workplace is an enjoyable and

supportive place to work, such as

massages, yoga classes, providing

breakfasts and lunches and arranging

other social events.

–

Open and enhanced regular dialogue

with Trade Unions and local

representatives (London).

–

A programme of virtual and ‘in person’

colleague sessions held with the

Designated Non-Executive Director

for work force engagement (also the

Remuneration Committee Chair) who

kept the Board appraised of these

engagements. These reports provided

the Board with valuable insights

from colleagues.

–

Board Directors and Executives

conducted site visits to engage ﬁrst-hand

with colleagues.

Ensuring our customers are at the heart

of our decision-making is crucial to our

strategy. Understanding their changing

needs, preferences and behaviours helps

us to ensure that our offering remains

safe, fair, current and appealing.

Key areas of consideration

–

Player protection

–

Customer experience

–

Relevance of offering

–

Health, safety and wellbeing

How we engage

We host, serve and engage with our

customers each and every day through

our engagement in venues and our digital

platforms. This includes discussing their

overall experience, safer gambling,

affordability and welfare. We also regularly

engage with our customers through

quantitative and qualitative research

to seek their views, opinions and insights

into how we can improve our products,

services and user journeys.

Our people are the heart and soul

of the business and a key enabler to its

success. We depend on their passion and

commitment to implement our strategy

and ensure our customers are served

in the best possible way.

Key areas of consideration

–

Opportunities for progression

–

Inclusion and diversity

–

Fair pay and reward

–

Opportunities to share ideas and make

a difference

–

Health, safety and wellbeing

How we engage

We seek an open dialogue culture and

host forums throughout the year to enable

the exchange of opinion between

colleagues and the sharing of views with

senior management and the Board. Other

engagement methods include, but are not

limited to, monthly Group and business

unit Town Halls, frequent updates and

corporate communications to share news

and developments, employee opinion

surveys, regular performance and

development reviews and venue visits by

Board members and senior management.

We also continue to offer a conﬁdential

whistleblowing hotline to all colleagues.

Customers

Our colleagues

The Rank Group Plc

Annual Report 2023

How we create long-term value

Continued

We engage with the local community

through volunteering, charity work and

providing employment and work

experience opportunities.

We are particularly proud of our nine-year

partnership with Carers Trust.

2022/2023 highlights

–

Continued to support our communities

through a wide range of initiatives and

sponsorships, such as Blackpool’s Pride

event, preparing meals for the homeless

and held the KAV cup poker event to

raise funds for charity.

–

Supported the ‘Everyone Deserves

an Easter’ campaign by distribution

of hampers to local vulnerable and

isolated people.

–

Raised £283,018.91 during the 2022/23

ﬁnancial year for Carers Trust, which

works to improve support, services and

recognition for anyone living with the

challenges of caring for a family member

or friend who is ill, frail, disabled or has

mental health or addiction problems.

–

Promoted Rank Cares Grants, a grant

programme for carers in the community.

The grants are offered under three

areas: (i) Carers Essentials Fund:

funding for vital equipment such as

washing machines, cookers, fridge

freezers or beds, (ii) Carers Take Time

Out Fund: funding to allow carers some

respite time, and (iii) Carers Skills Fund:

funding to enable carers to learn new

skills to further support their work

as carers.

–

Promoted local job vacancies, working

with local job centres and colleges

to ensure job seekers can ﬁnd local

employment, and which has continued

to be a successful recruitment method.

–

Supported Carers Trust to raise

awareness of the charity, hosting

the Carers Trusts CEO on our Mecca

TV online channel and our social

media careers.

–

In March, we supported the Young

Carers Action Day which seeks to raise

awareness of young carers and young

adult carers.

Community links are as important to Rank

and its people as they are to our customers.

Our businesses are more likely to succeed

when they are part of healthy and supportive

communities and we are committed to

making a positive contribution to them.

Key areas of consideration

–

Charitable initiatives

–

Positive community impact

– Employment

– Reputation

How we engage

Our venues are community hubs in which

people spend leisure time and engage and

interact with other customers and with our

colleagues. The strength of our business

is in part due to the long-term trust and

relationships which exist between our

colleagues and customers, who very often

will have known each other for many

years. A key learning has also been how

integral the role of our venues and keeping

communities engaged has been particularly

during, and as a result of, the pandemic.

Communities

We engage with the

local community through

volunteering, charity

work and providing

employment and work

experience opportunities.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

and the Bingo Association. We strive

to establish strong working relationships

with the aim that our contributions are

valued in terms of delivering customer-

oriented laws and regulations.

From a compliance perspective, we

participate in regular meetings and

communications with the UK Gambling

Commission (‘Commission’), as well as

other regulatory bodies and authorities

by whom we are licensed. We have

ensured Rank remains a ‘strong voice’

as we navigate the consultation process

following the regulatory reforms.

2022/2023 highlights

–

Undertaken a programme of

engagement with MPs and media during

the year ahead of the anticipated UK

Government’s White Paper for gambling

reform and following its publication

in April.

–

Encouraged our local MPs to visit and

join our Mecca club events to celebrate

National Bingo Day in June.

–

Attended and hosted at the Conservative

party conference in Birmingham, and

the Labour conference in Liverpool.

–

Chair attended the Commission’s chairs

roundtables during the year.

–

Two of our Non-Executive Directors

(‘NEDs’) attended the Commission’s

NEDs roundtables held during the year,

along with NEDs from other industries,

new this year.

–

Chief Executive attended meetings held

at the BGC ofﬁces with the Commission’s

CEO and senior ofﬁcials during the year,

with the Director of Public Affairs

deputising as needed.

–

Regular contact with ofﬁcials in DCMS,

including the current and former

Gambling Ministers, as we sought to

articulate the case for legislative change

that supports Rank’s strategy.

–

Members of BGC, Bingo Association

and JDigital.

–

Responded to the Commission’s

proposed changes to the Annual

Assurance Statement.

–

Responded to the Commission’s

consultation on the proposed changes

to the Licence conditions and codes

of practices.

Regulators and legislators play a key role

in shaping the gambling landscape and an

ongoing open dialogue is essential to ensure

we better understand the expectations

underpinning regulation and that regulation

is founded in an understanding of the

customer. Regulators also monitor the

high standards by which we operate.

Key areas of consideration

–

Openness and transparency

–

Compliance with laws and regulations

–

Consumer fairness and player protection

–

Policy and the direction of future

gambling regulation

How we engage

Establishing and developing relationships

with elected parliamentarians, government

ofﬁcials, industry peers and key

stakeholders (such as campaign groups

and media) was a key focus in the UK

during this year, particularly in light

of the gambling legislative reforms

and the publication of the White Paper.

Engagement was conducted both directly

and through industry bodies, such as

the Betting and Gaming Council (‘BGC’),

the Casino Chapter (within the BGC)

Regulators and legislators

We have ensured Rank

remains a ‘strong voice’ as

we navigate the consultation

process following the

regulatory reforms.

The Rank Group Plc

Annual Report 2023

How we create long-term value

Continued

2022/2023 highlights

–

23 meetings held with shareholders

during the year, in addition to quarterly

meetings held with the majority

shareholder.

–

Chief Executive, Chief Financial Ofﬁcer

and Director of ESG & Investor Relations

took part in a scheduled programme of

major shareholder engagement to discuss

interim and ﬁnal year preliminary results

and analysts following announcement

of ﬁnal preliminary results.

–

Chief Executive and Chief Financial

Ofﬁcer scheduled engagements with

major shareholders and analysts in

December 2022.

–

Chief Executive hosted a ‘ﬁreside’ lunch

with our major investors and analysts

to discuss the implications of the White

Paper for Rank and the next phase into

the consultation process.

2022/2023 highlights

–

Continued to evolve our management

of contract life cycles, beneﬁting our

suppliers and internal efﬁciencies.

–

Implemented a refreshed supplier

relationship management framework

to support improved ways of working

whilst driving value creation for both

Rank and its partners.

–

Continued to work with our suppliers

following the transition to our

proprietary platform in June of last year.

–

Provided training to suppliers and

contractors as appropriate when visiting

our venues.

–

Continued to build strong working

relationships between Rank’s regular

suppliers and operators throughout

the year.

–

Considered supplier relationships

as we commenced a review to qualify

standards and expectations around

our supplier conduct.

–

Our Remuneration Committee chair,

on her appointment as the chair to

the committee in January wrote and

introduce herself to our major

shareholders and the proxy advisers.

This also provided an opportunity

for our major shareholders and proxy

advisors to raise any remuneration

matters, particularly in light of the

Remuneration Policy to be reviewed

in 2024.

–

Received votes from 92.55% of

shareholders for the 2022 Annual

General Meeting (‘AGM’).

–

Ensured our shareholders had an

opportunity to raise their questions

ahead of the 2022 AGM, and which were

responded to and published on our

corporate website www.rank.com.

–

Continued to work with our landlords

on all leasing matters through the year,

particularly as we sought to improve

terms and a mutual beneﬁt to our

landlords through enhanced asset

investment value and in turn, providing

the business with greater certainty of

venue occupancy.

–

The Group’s 2022 Modern Slavery

Statement was reviewed and approved

by the Board. A copy of the statement

is available on the corporate website

www.rank.com.

We adopt an open and transparent

approach with our shareholders and

analysts to communicate our performance

and use their feedback to inform our

strategy and decision-making.

Key areas of consideration

–

Strategy, performance and outlook

–

Leadership capability

–

Executive remuneration

–

Corporate governance

–

Environmental, social and governance

(ESG) performance

How we engage

We adopt a proactive approach to investor

relations, conducting a comprehensive

programme of regular contact and

consultation throughout the year. Our

investor relations programme includes

regular updates, meetings, roadshows and

our Annual General Meeting. The other

key way in which we communicate with all

shareholders is via our corporate website,

www.rank.com.

We have relationships with circa 1,500

suppliers, ranging from small businesses

to large multinational companies. We aim

to operate to the highest professional

standards, treating our suppliers as key

business partners and operating in a fair

and reasonable manner, encouraging

supply chain transparency and promoting

fair working conditions.

Key areas of consideration

–

Robustness of our business

–

Long-term partnerships

–

Fair engagement and payment terms

–

Collaborative approach

How we engage

We have a dedicated procurement function

which engages with our suppliers with

the aim of optimising the way that we work

with them. We build relationships regionally

and locally to better understand the

markets from where we source products

and services. These relationships ensure

Rank maintains and creates a strong

relationship that is able to support Rank’s

long-term success.

Shareholders and investors

Suppliers

The Group’s Modern

Slavery Statement

can be found on

www.rank.com

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Financial KPIs

KPI:

Financial KPIs

Strategic

pillar

Page

Digital NGR

Strategic investment

Our five strategic pillars:

Provide a seamless experience

Drive digital growth

Evolve our venues

Be passionate about our colleagues

Build sustainable relationships

Underlying

net gaming revenue (‘NGR’)

Underlying NGR is an indicator of the Group’s top-line growth. It is revenue retained

from the amounts staked after paying out customer winnings and deducting customer

incentives. Underlying NGR increased by 6% in the year with all business units in growth.

2023

£681.9m

£644.0m

£329.6m

2022

2021

Underlying

operating profit/(loss)

Underlying operating proﬁt provides a picture of the underlying performance and is a key

indicator of the Group’s success in delivering top-line growth while controlling costs.

Underlying operating proﬁt decreased to an operating proﬁt of £19.1m.

2023

£19.1m

£38.5m

£(85.4)m

2022

2021

Net debt

Net debt is calculated as total borrowings less cash and short-term deposits. Net debt

increased in the year due to the £172.9m.

2023

£172.9m

£164.8m

£257.6m

2022

2021

Underlying

EBITDA

Underlying EBITDA is earnings before interest, tax, depreciation, amortisation

and separately disclosed items. It is calculated by taking underlying operating proﬁt

before separately disclosed items and adding back depreciation and amortisation.

Underlying EBITDA for the year decreased to £77.1m.

2023

£77.1m

£105.9m

£(15.1)m

2022

2021

The Rank Group Plc

Annual Report 2023

Our key performance indicators

Earnings per share (‘EPS’)

EPS is a key indicator of the Group’s growth after allowing for all costs including

separately disclosed items. EPS decreased to a loss of 20.4p.

2023

(20.4)p

13.9p

(16.7)p

2022

2021

Underlying

1,2

EPS

Underlying EPS is a key indicator of the Group’s growth before allowing

for separately disclosed items. Underlying EPS decreased to 1.2p.

2023

1.3p

4.0p

(20.5)p

2022

2021

Dividend per share

Dividend per share is the sum of declared dividends issued by the Company for every

ordinary share outstanding.

Taking account of the continued challenging trading environment and the strong

pipeline of investment opportunities to drive revenue and proﬁt growth, the Board has

not proposed a full year dividend but expects to recommence dividend payments as soon

as circumstances permit.

2023

2022

2021

Underlying measures exclude the impact of amortisation of acquired intangibles; proﬁt or loss on disposal

of businesses; acquisition and disposal costs including changes to deferred or contingent consideration;

impairment charges; reversal of impairment charges; restructuring costs as part of an announced

programme and discontinued operations, should they occur in the period. Collectively these items

are referred to a separately disclosed items.

2. Before discontinued operations.

Stakeholder KPIs

KPI:

Stakeholder KPIs

Strategic

pillar

Page

Percentage of venues

customers that play

with us online

Percentage of digital

NGR from cross-

channel customers

Customer numbers

(digital)

Customer numbers

(venues)

Net promoter score

Employee net

promoter score

Females in senior

positions

Contributions

to good causes

Greenhouse gas

emissions intensity

Our five strategic pillars:

Provide a seamless experience

Drive digital growth

Evolve our venues

Be passionate about our colleagues

Build sustainable relationships

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

We have four key focus areas – Customers,

Colleagues, Environment, and Communities

– which are underpinned by robust ESG

governance practices and policies.

For in-depth ESG disclosure, see our full

Sustainability Report (available on our

website, www.rank.com). Our reporting

is aligned with international reporting

frameworks, the Global Reporting

Initiative (‘GRI’) and the Sustainability

Accounting Standards Board (‘SASB’).

We have included in both the Annual and

Sustainability Reports, our full disclosure

in line with the recommendations of the

Task Force on Climate-related Financial

Disclosures (‘TCFD’).

ESG governance

Governance framework

To support effective ESG management,

we have a robust governance framework

in place. Overall responsibility for setting

the Group’s ESG strategy sits with our

Board of Directors, supported by the

oversight and expertise of the ESG & Safer

Gambling Committee. Progress reports

are provided to the Board by the Chair

of the Committee, whilst the Group’s Risk

Committee keeps the Board appraised of

any new or emerging ESG-related risks.

This year, we have further strengthened

our governance structure at management

level. In order to drive our ESG agenda

and operationalise our strategy across the

Group, we set up an ESG Working Group

(‘ESG-WG’) with representatives from each

area of the business, which reports into

the ESG Steering Group (‘ESG-SG’) at

Executive Committee level. To provide

purposeful direction on decarbonisation,

our Net Zero Working Group, supported by

external consultants with environmental

management expertise, is developing a

strategy to reach net zero emissions in line

with our stated targets.

We established four key areas of focus

to provide structure and clarity in

our reporting: Customers, Colleagues,

Environment and Communities.

This structure is underpinned by

our understanding of the material ESG

risks and opportunities to the business,

informed by a study conducted with a

cross-section of our stakeholders and

our Group corporate objectives.

This year we have introduced Key

Performance Indicators in each of the four

areas, to support performance reporting.

We believe that the long-term success

of our business is dependent upon how

we manage non-ﬁnancial matters, and a

ﬁgure will therefore be linked to executive

remuneration, sharpening our focus on

ESG-related performance.

Business ethics

Every employee at Rank is expected

to comply with the highest standards

of business ethics. Our guidelines for

professional behaviour are enshrined

in our Group policies, including but not

limited to our Code of Conduct, Anti-Money

Laundering (‘AML’), Anti-Corruption and

Bribery, Data Protection, and Health and

Safety policies. All employees must be

made aware of these standards and

complete mandatory refresher training

every year. Training is conducted through

our online platforms (Springboard, in the

UK, and Campus, in Spain) and employee

completion rate is monitored. Our

whistleblowing programme, Speaking Up,

enables employees to raise possible

improprieties in conﬁdence.

Supply chain management

Operating in the highly regulated industry

of betting and gaming, we must ensure

that the third parties we work with are

compliant with industry regulation and

operate according to the same high

standards of ethics that we set as a Group.

Manufacturers of gambling equipment

and software in the UK are required to

have all their equipment and software

tested and certiﬁed by independent test

houses approved by the Gambling

Commission. We must only source from

those Gambling Commission-approved

suppliers for our UK-based venues and

online sites. If a company is not certiﬁed

we will not work with them. Though the

legislation around manufacturers of

gambling equipment and software is

different in Spain, we have the set the

same high standards for the third parties

we engage outside the UK.

The Group’s

management of

and performance

on Environmental,

Social and

Governance (‘ESG’)

related matters.

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Customers

Providing an entertaining and exciting

experience for all our customers is a

central focus of our business. To achieve

this, we want to offer our customers fun

and entertainment, whilst ensuring that

they play within their means. Safer

gambling considerations are therefore at

the forefront of our consumer engagement

and embedded into everything we do. We

continue to develop our approach, utilising

new technology and deepening employee

awareness, to increase the sophistication

of our methods of detecting at-risk play.

Key Performance Indicators:

Customer Net Promoter Score (NPS)*

Grosvenor:

Mecca:

UK Digital:

Customer feedback scores

on safer gambling

Employee NPS on safer gambling

Percentage of UK Digital customers

using safer gambling tools

Customer NPS is calculated by averaging the

scores from each of the brands. For Grosvenor,

Mecca, Enracha, and UK Digital, each individual

score was the average for 12 months to 30 June

2023, whilst for International Digital this was the

score at 30 June 2023 as the customer survey was

only conducted once during FY 2023 for this part

of the business.

Safer Gambling

Safer gambling messaging

The focus on keeping our customers

safe underlines everything we do at Rank.

Safer gambling messaging is incorporated

into our operations and communications

across the Group, internally and externally

and across all the brands. The objective

of consistent safer gambling messaging

is to maintain a strong awareness amongst

customers, ensure that relevant support

is signposted and easily accessible, and

keep safer gambling central in the minds

of our employees.

In the UK, our standalone, dedicated

safer gambling website, Keep It Fun

(keepitfun.rank.com), provides a hub for

advice and information on safer gambling

tools available for customers gaming online

or in our venues, including ‘How to’

materials. The Keep It Fun messaging

appears on all our communications,

as standard.

We follow industry best practice on

safer gambling messaging. This year we

conducted a full audit of our messaging

against the GamCare Code of Conduct,

which has updated the requirements for

the visibility of safer gambling messaging

in UK land-based venues. We now have

’360’ messaging on safer gambling across

our locations.

In our Spanish venues, safer gambling

messaging can be found on all slot machines

and on posters in the venues. These signs

provide information on where players can

seek help, and there are resources and

links to gambling charities on the safer

gambling page of the Enracha website. For

the Rank Spanish digital business, all sites

have a links to a safer gambling resources

and support organisations.

Safer gambling tools for customers

To minimise the risk of gambling-related

harm we provide customers with the

right tools to help them remain in control

of their play. We continue to review our

existing measures, introduce new tools

or updates based on player behaviour,

and ensure that we are compliant with

industry requirements.

Customers can set deposit, loss or time

limits on machines in venues and on

games online to manage the amount they

spend or monitor the time spent playing.

All our channels offer the option to

self-exclude, which is an enforced break

from gambling. To support a customer

that has self-excluded, their status will

be updated automatically on our marketing

system which will suppress all

communications to that customer.

Detecting at risk customers

Even with the actions we take to inform

our customers about safer gambling and

the tools we provide to facilitate responsible

gaming, a very small proportion of

customers will exhibit problem gambling

behaviours. As such, it is critical that we

take every appropriate step to quickly

identify these individuals and provide

them with the support they require.

For the digital space we employ

technological solutions for detecting

at-risk customers including use of data

models. We are developing a Central

Engagement Platform (‘CEP’), with the

objective to create a single source of truth

for data in the business. Currently, the

CEP draws on 35 data sets from Mecca,

Grosvenor, and the digital brands in the

UK, and we are beginning to utilise

this information to enable data driven

decision-making across the Group.

As safer gambling is such a central focus

for Rank, we have already developed

models to improve efﬁciency in detecting

at-risk customers, including monitoring

play in our Grosvenor venues. Now, when

an individual exceeds a pre-determined

spend threshold, an alert is sent to the

management system of that casino,

triggering an interaction by a member

of the team with that customer regarding

their level of spend.

In our gambling venues our employees are

trained to monitor players and recognise

signs of harmful playing behaviour. Every

employee must complete mandatory safer

gambling instruction on an annual basis,

with progress being monitored through

our online platform. Additional training

is provided as required or according to a

particular role’s needs. Extensive training

was provided to circa 1,200 employees

across Mecca, Grosvenor and UK digital

business this year to embed and enhance

ownership of and accountability for

promoting safe gambling behaviour

amongst our customer-facing teams.

The response from participating

colleagues has been excellent, with

feedback reﬂecting a greater appreciation

for the importance of safer gambling and

a much greater understanding of how

to approach customers.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Safeguarding

Preventing underage play

A constant consideration in our

marketing is ensuring that none of

our communications or advertising is

presented in a way that would appeal to

children or young people. We employ a

number of different methods in our venues

to prevent underage individuals gaining

admission, including IDScan technology,

CCTV and compulsory registration. In our

UK digital business, we use third-party

credit reference databases to check and

validate customer registration details; this

check is aimed at preventing under-18s

from qualifying for access to our sites.

In our Spanish digital business, the age

veriﬁcation process is conducted in

conjunction with the regulator.

Protecting vulnerable customers

Our Markers of Harm model assists in

safeguarding the interests of vulnerable

customers by using demographic,

transactional and behavioural data, as

well as known markers of harm to assess

customers. Any individual that scores in

the high-risk category will not receive any

marketing communications from any of

our brands.

At Grosvenor we have taken a number of

signiﬁcant steps in relation to vulnerability.

We have updated the safer gambling

policy to make it clearer. This includes

our approach to identifying potentially

vulnerable individuals and we have

provided complementary training for our

employees on how to manage a situation

like this, should it arise.

We recognise changes in customers’

circumstances when conducting interactions,

particularly life events, changes to ﬁnancial

situation and any medical issues our

customers bring to our attention. Potential

or known vulnerabilities are recorded on

the customer’s account and taken into

consideration when assessing their play.

In Spain, we received speciﬁc guidance

from a safer gambling specialist on

dealing with vulnerable customers. There

is a particular focus on the approach to

customers in crisis, including those with

drug addiction issues or at risk of suicide.

Customer privacy and

data security

To ensure that our customers have

complete conﬁdence in their playing

experience, it is critical that we protect

their privacy and keep their personal data

secure. As such, we maintain clear

principles of accountability for data

security. The Board of Directors has

ultimate responsibility for data security,

with clear reporting lines and delegated

responsibility through the Chief Executive

to the Chief Information Ofﬁcer, Chief

Data Ofﬁcer and Director of IT Security.

Our Spanish business aligns to the same

framework; an external local data

protection ofﬁcer (DPO) puts in place

all data security protocols and monthly

reports are provided to the Group DPO.

Our data protection policies provide

direction on all data handling matters

including user rights, data retention,

data sharing and security. This year we

introduced a new process for reporting

of data breaches. The objectives were

to improve ease of reporting and to

encourage people to report near misses.

Reporting near miss data breach incidents

should reduce the number of actual

incidents, as people are more aware of the

risks and improvements to processes can

be identiﬁed before a breach occurs.

The protection measures we employ

are dependent upon the level and type

of security required. These include, but

are not limited to, password management

(complexity and frequency of change),

multi-factor authentication, ﬁrewalls,

encryption, role-based access controls,

end point protection, intrusion detection/

prevention, and employee education, and

are all aligned with industry best practice.

A managed service Security Operations

Centre is in place, monitoring data

interactions by users and devices across the

Rank estate. This then reports any activity

of concern into our Information Security

Team, ready for further investigation.

Product safety and quality

In accordance with regulations in the UK,

Rank must ensure that the equipment it

uses meets the conditions of its operating

licences, both venue-based and digital.

All the gambling equipment and software

we obtain comes via companies licensed

by the Gambling Commission. In Spain,

our Compliance Manager conducts audits

of the venues every three months to

ensure that the licences on slot machines

are valid. All gambling products installed

in our venues are certiﬁed and in

accordance with regional regulation.

Monitoring the safety performance of our

products is critical to delivering a seamless

player experience for our customers,

as well as ensuring that our games are

operating in accordance with regulatory

requirements. Across all our venue and

online brands we track performance of

the equipment so that we are alerted to any

potential issues as quickly as possible and

can take active steps to maintain target

performance levels.

Ethical marketing

Promoting our brands to consumers

requires a careful balance of effective

advertising and ensuring that we are only

doing so responsibly. In both the UK and

Spain there are clear regulations governing

the advertising of gambling products that

ensure consumer targeted communications

reach the intended audience and do not

promote it as a resolution for ﬁnancial

difﬁculties or loneliness issues. Any new or

materially different materials are reviewed

by our Compliance Team before release to

assess the tone and intent and that they

are not contravening any regulations.

“

Our Markers of Harm

model assists in

safeguarding the interests

of vulnerable customers

by using demographic,

transactional and

behavioural data.”

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

Safer gambling is a critical consideration

in our advertising and we are committed

to providing consistent and effective safer

gambling messaging when we market

our products. In the UK, in compliance

with Betting and Gaming Council (‘BGC’)

commitments, and in addition to the safer

gambling messaging which must be

included in all advertisements, 20%

of our ‘above the line’ media expenditure

in the UK is reserved for safer gambling

messaging on campaigns. The Advertising

Standards Agency (‘ASA’) guidelines

were updated in October 2022, which

has sharpened focus on the imagery used

externally to make sure that it does not

appeal to children. As a member of the

BGC, Rank also follows the industry body’s

Code for Responsible Advertising.

For the venues business in Spain, there

is no obligation to display the ‘responsible

gambling’ message in our operating

locations of Catalonia, Madrid and

Andalusia, however, we always add the

message to our advertisements. For the

digital business in Spain, whilst we always

display the ‘responsible gambling’ message

when required, the obligation to do so is

dependent on the following: content and

type of communication, communication

channel, the targeted users/those

potentially impacted, and which company

is responsible for the communication.

Health and safety

As an operator of physical venues across

the UK and Spain, it is important we take all

necessary measures to ensure the physical

health and safety (‘H&S’) of our customers

and colleagues. We are committed to

achieving the highest standards in H&S

across the Group and continue to improve

and update our processes in line with the

local government guidance and approved

codes of practice. To improve efﬁciency

and oversight, we have introduced a

new safety management system for the

UK venues which amalgamates all our

previously disparate platforms into one

online portal. This has streamlined and

improved the data collection and

management process, creating a singular

dashboard with all relevant information.

Customer service

Interactions with our customers are

a key enabler to improving our service

and turning player engagement into a

competitive advantage. It is important

that customers have clear channels of

communication for them to feed back to

the business and that they are provided

with any support they require in a timely

and friendly manner. The customer service

team can be contacted via live chat, phone

or email. The ﬁndings from the feedback

gathered are shared with the relevant

teams internally in order to drive

continuous improvement.

Colleagues

Delivering a high quality of service for

our customers depends on our ability to

provide a positive working environment

for our colleagues. As such, driving

engagement, providing development

opportunities, and ensuring all employees

are treated fairly and given the support

they require, are all key commitments

for our business.

Key Performance Indicators:

Employee Net Promoter Score (‘eNPS’)

Percentage of women in senior roles

Training and development

Leadership capability

Sustainable growth is reliant upon the

direction of leadership. As such, it is critical

that we have effective leaders in place

equipped with the appropriate skills and

understanding to drive the business

forward. The skills of the Board of Directors

are reviewed annually to maintain the

necessary knowledge and experience

that is appropriate for the business.

Board members receive regular corporate

governance and industry updates and

bespoke coaching is offered to senior

management to enable further growth in

expertise. To support the development of

future leaders, in the UK digital business

this year, we have launched an Internal

Mentoring Programme speciﬁcally to

support those individuals identiﬁed

as high potential.

Development opportunities

Equipping people with the right tools

to fulﬁl the duties of their roles and the

mandatory training to operate according

to best practice is a focus for every

company. We have incorporated training

opportunities into our recruitment

strategy, including offering our six-week

intensive training programme, Gaming

Academies, for individuals that want to

learn dealing casino games. We recruit

people speciﬁcally for these courses,

providing skilled employment and free

training. The in-depth safer gambling

training provided in partnership with

GamCare this year has also resulted

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

“

We are committed to

achieving the highest

standards in H&S across

the Group and continue

to improve and update

our processes in line with

the local government

guidance and approved

codes of practice.”

in positive outcomes for our employees,

with many reporting an improved ability to

carry out their roles and support customers.

To improve engagement, to motivate

people to excel, and to be seen as a great

place to work, offering career development

opportunities is crucial. Our e-learning

platform offers over 700 courses in

professional and personal skills

development and is available to all

employees. Apprenticeships are used

as a tool to upskill individuals within

and prepare them for more senior roles.

We have a formal process through which

colleagues can apply for support to

undertake external training such as

mini-MBAs and project management

courses. By providing these opportunities

we are proud to have continued seeing

colleagues progress through the business.

Equality, diversity and inclusion

We are committed to creating an equal,

diverse and inclusive working environment

where everyone’s needs are supported.

We have four stated aims against which

we have delivered a number of initiatives

in the past year.

Deliver an inclusive and diverse

environment that contributes to us being

internally and externally recognised as

an admired employer.

–

In May, we introduced the Career

Accelerator Programme (‘CAP’), available

to all female colleagues currently in

or seeking to enter management roles.

The importance of ED&I must be

understood by every level of the business.

This year, we delivered 7,200 hours of

ED&I learning through a mixture of

events, webinars, online learning and

forums. Whilst we continue to educate

our colleagues, we also regularly review

our leaders and managers to ensure that

they are acting and leading inclusively.

Create a colleague experience that

both attracts and retains talent regardless

of our location.

–

To ensure that the right support

structures are in place for all our

employees, we have begun an extensive

review of our family support policies, with

the aim to be equitable across different

locations, improve accessibility, and

ensure the values reﬂect our new EVP.

Ensure we continue to educate, grow,

and develop our colleagues and that any

perceived/actual barriers to career

progression are removed.

–

To ensure there are no barriers

to progression for individuals from

under-represented groups, several

initiatives are in place to support

employees’ development. We create

personal development plans (‘PDP’),

which we review on a quarterly basis.

To support the development outlined

in the PDPs, we offer mentoring and

enable individuals to undertake

external courses.

Make equity integral to how we

do business.

–

We have six ED&I colleague network

groups – Wellbeing; Women; Racial

Equality and Diversity; LGBT+; Families;

and general ED&I (incorporating religious

celebrations) – and host a calendar of

events to celebrate and align with national

and international events. This year, our

EOS results showed improved internal

perceptions on Rank’s ED&I performance,

with the score increasing from 8.1 to 8.3.

This was reinforced externally, where

we ranked in the top 25% of Gaming/

Gambling companies for ED&I through

the All Index Benchmarking survey.

Engagement, reward and wellbeing

Working in a dynamic industry such as

ours is truly exciting, and we want to make

sure that is reﬂected in every employee’s

experience. Engaging with our colleagues

on an ongoing basis helps us to monitor

employee satisfaction and provide a key

channel for feedback. Our Employee

Opinion Survey (‘EOS’) is a valuable tool

for assessing employee sentiment and

is a Key Performance Indicator for the

business. Our Executive Team are not

a remote body, but continually interact

with colleagues, listen to feedback,

and respond to concerns. Directors and

senior management lead our Town Halls,

in which all colleagues can participate.

In order to deliver the best possible

experience for our existing colleagues,

as well as continue to bring talented

individuals into the business, we have

been developing Work. Win. Grow., our

new Employee Value Proposition (‘EVP’).

The new EVP is underpinned by our

existing values but is focused on building

a comprehensive global understanding

of our business. Crucial to this has been

reviewing the policies we have in place

and compensation we offer, with the

objective to ensure the beneﬁts offering

is equitable across our workforce.

By undertaking this project, we are

developing the culture of Rank to meet

employee expectations, improving talent

attraction, engagement, and retention.

Environment

Key Performance Indicators:

36.6

Carbon intensity ratio

Net zero pathway

Rank fully supports the international

decarbonisation goal, as set out in the Paris

Agreement. In order to meet the 1.5°C global

warming target, global carbon emissions

should reach net zero around mid-century.

Assessment and targeting

Rank’s long-term goal is to achieve

climate neutrality for its entire value

chain (Scopes 1,2 & 3) by 2050, or earlier

if possible. Meanwhile, an interim target

has been set to remove all greenhouse

gas (‘GHG’) emissions from an initial

boundary by 2035. This boundary extends

to all operations and includes Scope 1 and

2 and selected categories of Scope 3.

“

Technology tools are

being rolled out to

capture facility energy

usage data at source.”

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

FY June 2022

Baseline Carbon

Assessment

FY June 2023

Carbon

Reduction Plan

2023-35

Interim Target

2035-50

Longer-Term Goal:

Rank initial boundary covers

all operations for Scope 1 and 2

with selected Scope 3 categories.

Preparing a baseline and reduction

plan for Scope 3 emissions takes

between 6 and 12 months.

£57m investment and

£135m savings in the UK over

the last 12 years

– Board approved approach

to net zero plan development.

– Engage suppliers for carbon

reporting tool.

– Engage supplier for Scope 3

investigation.

– Mobilise culture and colleague

engagement.

– Apply net zero criteria in initiative

approvals.

– Complete PRISM energy capture

phase one roll-out.

Interim net zero

Rank’s interim target is to remove

all GHG emissions from an initial

boundary by 2035.

Climate Neutrality including

SBTi alignment

The SBTi’s Corporate net zero

Standard is the world’s leading

framework for target setting and

includes the criteria needed to set

science-based Net Zero targets

consistent with limiting global

temperature rise to 1.5°C.

It requires emission reductions

through direct action within

companies own boundaries or their

value chains. Offsets are only

considered to be an option to ﬁnance

additional emission reductions

beyond their science-based target.

Net zero pathway

Net zero business planning

Independent

oversight

Strategy

Implementation

Board

ESG Steering Group

ESG Working Group

ESG & Safer Gambling Committee

Net zero Working Group

Scope 1

Scope 2

49%

Scope 3

49%

External actions

35%

Internal initiatives

30%

Consequential actions

35%

Value chain

Scope 1

Covers direct emissions from sources

owned or controlled by the company.

This includes emissions from

company-owned or operated facilities

and vehicles.

Scope 2

Covers emissions from the

generation of electricity purchased

by the company.

Actions

– Implement trial carbon reporting tool.

– Present updated net zero plan.

– Review progress and approach.

Emissions recognition

Scope 3

Despite being less directly related

to a company’s main activity, these

indirect emissions can make up a

signiﬁcant portion of a company’s

impact on the climate.

There are two categories:

– Upstream emissions from activities

involved in the creation of a company’s

services or goods. This includes

emissions from employee travel and

commuting to work, and emissions

in the supply chain from the

production of purchased goods and

services the company uses or sells.

– Downstream emissions occur

from the distribution or use of

a company’s goods including

the disposal of products.

Energy reporting methods

Technology tools are being rolled out

to capture facility energy usage data

at source with additional systems

under review for:

– Capture of non-facility data,

e.g. vehicles, waste.

– Translation from usage into

a common carbon metric.

Internal and external actions

– Building rationalisation.

– Grid abatement.

– Offsets.

– PPA supply.

Implementation actions

Energy champions

Identify suitably motivated and

willing colleagues to advocate

climate-positive sentiment and

actions in their workplaces.

Communications

Establish a comms plan to provide

regular and relevant messaging to

internal and external communities

to inform, stimulate and motivate

positive behaviours.

Incentives & recognition

Fund and implement suitably oriented

schemes to recognise and reward

positive contributions and excellent

behaviours.

Sub-committee led by Non-Executive Director, Katie McAlister

Functional leadership team made up of relevant skills sets within

the organisation

Transformation | Procurement | HR | Information technology

| Sales & marketing | Compliance | Governance

Carbon reporting

To ensure a robust single source of truth

for decision-making, investment and

review of progress over time.

– Baseline carbon performance assessment

– Monitoring: Electricity, gas, fuel

– Reporting

Transformation

Methods to ensure that opportunities are

captured, assessed and, where appropriate,

executed with quality and pace.

– PMO: Business case, ownership, processes,

risk & issue

– Carbon reduction initiatives

– Project dashboard

People

Build an inclusive and progressive

culture to inﬂuence behaviours,

encourage participation and share plans

and achievements.

– Soft goals

– Team engagement communications

– Culture

Cross-functional group of internal and external personnel,

coordinated by Rank’s ESG Strategic Programme Lead

Senior executive team including CEO and members of the Executive Committee

Executive Committee

Business

Leadership and direction, aligning policies with business strategy, and ensuring governance is in place throughout

Business strategy | Policies, planning and governance | Performance

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Today

Portfolio Changes

Summer Ready Initiatives

Installed Equipment

(Electronic Gaming Machines)

Reporting/ smart metering

Lighting

PPA

Cultural Engagement

BMS/ Controls

Self Generation (PV)

Heating/ Cooling Systems

Hot Water

Refrigeration/ Kitchen

Grid

abatement

Carbon Offsets

100

-8.00

-0.43

-0.64

-1.52

-4.23

-7.77

-2.57

-5.56

-0.97

-11.74

-3.30

-0.67

-19.55

-33.06

Work completed to date includes the

preparation of an initial carbon baseline

for 2021/22 that calculated our existing

GHG emissions. The company has been

working with specialist third parties to

understand emissions, the options to

reduce, and the effects of initiatives as

they progress: Consultus – for guidance on

carbon reporting and reduction initiatives

Cloudfm – for detailed monitoring and

reporting of actual energy usage.

We have utilised the SECR (Streamlined

Energy and Carbon Reporting) report,

prepared by Consultus and delivered

in July 2022, as the basis for recognising

the baseline carbon emissions position of

our business. The total baseline position

calculated for 2021/22 is 26.8 kT of

emitted.

Initial boundary

All operations, including those in Spain,

are encompassed in the scope of the

interim net zero 2035 target for Scope 1

and 2 emissions, plus selected voluntary

Scope 3 emissions.

The vast majority of these emissions come

from electricity and gas, used to operate

facilities, and assigned across Scopes 1

and 2. Consultus projections expect this to

grow by circa 4% in 2023. Further work will

be conducted in Q3/4 of 2023 to embrace the

wider extent of Scope 3 emissions – which

we expect to be signiﬁcant – including the

preparation of a baseline assessment of

Scope 3 emissions.

Current and proposed pathways

Several initiatives and actions have been

identiﬁed to reduce the Group’s carbon

footprint. Some beneﬁts will be felt as part

of pre-existing investment plans, such

as background improvements in carbon

efﬁciency through energy contracts, or

the considerations of continuing to operate

in certain venues. Others will come as a

result of internal initiatives planned and

implemented by the business.

Energy reporting

We are utilising technology tools to

capture facility energy usage data at

source. The Mindsett PRISM is an energy

management system which provides

planned and reactive facilities management

from Cloudfm (our energy consultants).

It will be implemented over the next three

years across Rank UK.

At the end of 2022/23, we began the

installation of smart-sensing devices at

our top 40 highest energy consuming sites

in the UK. The devices now capture data

from every asset that is plugged in at these

venues, from each individual slot machine

through to the heating, ventilation, and air

conditioning (‘HVAC’).

The data we are collecting is combined

with the metered gas data; this helps

us understand the full picture of energy

usage at each venue. This information

can be accessed through an energy usage

dashboard. The platform enables the

business to interrogate energy usage

across different parameters, such as which

equipment is most energy-intensive and

whether devices are not being switched

off overnight. By gaining a detailed

understanding of energy usage in our

venues, we can identify where behavioural

change can be encouraged to reduce

energy consumption. We can then apply

these learnings across the entire Group.

A key function of this technology is

in enabling predictive maintenance.

By continually monitoring the operation

of equipment, the platform can distinguish

between assets, even if they are the same

make and model. It will also be able to

create a proﬁle on each asset, whether

that be a fridge or a PC.

Owing to the granularity of the

performance data captured per asset,

the system can predict potential faults.

This will allow the business to pivot from

reactive maintenance to preventative,

which in turn will mean more efﬁcient

energy usage and greater uptime of

operational and revenue-producing assets.

Additional systems under review include

the capture of non-facility data, e.g. vehicles

and waste; translation from usage into

a common carbon metric; presentation

of a carbon dashboard.

Net zero waterfall

(%)

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

Change management

By affecting behavioural change,

technology can be used to pursue our

decarbonisation objectives. Educating

everyone about our net zero ambitions

is therefore key and will complement our

decarbonisation workstreams. To support

the implementation of our plans, we are

mobilising the Group to develop positive

culture and processes, deliver practical

initiatives to reduce carbon emissions,

and introduce reporting mechanisms

to demonstrate progress in line with

the stated ambition. These include:

–

Environmental champions – motivated

and passionate colleagues to advocate

climate-positive sentiment and actions

in their workplaces.

–

Communications – we have established

a communications plan to inform

internal and external communities,

and to drive improved behaviours.

–

Incentives and recognition – funding

to recognise and reward positive

contributions and excellent behaviours.

Starting with the installation of the PRISM

technology in venues, we have established

a calendar of engagement for FY 2024.

This commenced with training sessions

for employees in Summer 2023 on the use

of the Mindsett platform. The aim of these

sessions was to familiarise colleagues with

both how to use the platform and the

information that it provides.

We will check in with our employees

throughout the year to continue embedding

awareness about energy reduction, gather

feedback on environmental initiatives, and

incentivise positive behavioural change.

Refining our approach

It is a strategic imperative for our business

to reﬁne our decarbonisation strategy. As

we are now gaining greater understanding

of energy use across the business, we are

developing an investment strategy that is

informed by robust data and establish a

credible pathway to net zero.

The chart (above) maps our current

decarbonisation initiatives across the

business. With greater understanding of

our Scope 1 and 2 emissions, the waterfall

currently focuses on initiatives in these

areas. The initiatives include: measures

that we are already undertaking, such as

changes to our venues portfolio; measures

which have been identiﬁed during

site-speciﬁc audits, such as upgrading

a heating system; measures which can

be applied on a national level across similar

properties, such as improving internal

awareness of energy use; and, lastly,

green energy and offsets.

A number of initiatives that we are

undertaking will require a degree of

investment, however we have calculated a

far greater return in cost savings as a result

of their implementation.

Of the measures we have set out for

FY 2024, entering a renewable electricity

power purchase agreement (PPA)

represents a signiﬁcant saving in tonnes

of CO

at the lowest investment cost.

Instrumental in reducing our carbon

footprint, however, will be measuring

and addressing Scope 3 emissions.

Supported by our carbon consultants,

we are assessing the 15 categories of

Scope 3 emissions to better understand

this footprint.

Our initial focus is on the areas of

greatest spend, with a view to establishing

more granular detail on the supply chain

in the future. In order to support this

process, we are looking into options

for a carbon accounting.

With operations in Spain, we recognise the

obligations of EU legislation. The Corporate

Sustainability Reporting Directive (‘CSRD’)

requires companies to report on their

Scope 3 emissions by 2025. We are

committed to meeting these legislative

requirements, but will not limit this

exercise to the Spanish business, rather

approach Scope 3 reporting from a

Group-wide perspective.

Task Force on Climate-related

Financial Disclosures (‘TCFD’)

Governance

Board oversight

For effective leadership on climate-related

issues, there must be awareness and

understanding of these matters from the

very top of the organisation. Our Board of

Directors are regularly kept appraised of

progress on climate-risk considerations,

speciﬁcally via the ESG Steering Group,

who assume executive ownership and

accountability for the sustainability

strategy. This year, updates given to the

Board have focused on speciﬁc energy

reduction assessments and initiatives

to address the decarbonisation agenda,

as well as progress against the Group’s

established non-ﬁnancial KPIs.

(See page 57 for organogram.)

The Board has clear oversight of climate-

related matters through its committees

The ESG & Safer Gambling Committee

in particular is responsible for overseeing

the Company’s approach to climate risk,

deﬁning strategies and proposed actions.

The ESG & Safer Gambling Committee met

four times during the year, with climate-

related matters raised at each meeting.

3.89

Amount of hazardous waste (tonnes)

1,149

Amount of non-recycled waste (tonnes)

1,053

Amount of recycled waste (tonnes)

206,498

Total water usage (m3)

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

In the UK, the executive management

teams of the ESG Steering Group, Net Zero

Working Group and ESG Working Group

are supported by external advisors,

speciﬁcally relating to our climate-risk

reporting and net zero workstreams.

The consultants – Consultus, Cloudfm,

JustaEnergia and Buchanan – each have

unique but complementary skillsets.

These skillsets satisfy the multitude

of stakeholder requirements that drive

operational, ﬁnancial and commercial

success. In Spain, we are in the process

of contracting a consultant to support on

the development of a country-level net zero

strategy. The business is informed by

environmental management consultants

and other corporate advisors. These

include broking, legal and accounting

professionals, with information delivered

via webinars, publications, one-to-one

training sessions, and ongoing internal

discussions regarding energy utilisation.

Considerations from multiple segments

of the business feed into our assessment

of climate-related risks and opportunities,

as these risks can impact the business

in many different ways. For the Group’s

balance sheet, climate-related risk has the

potential to impact ﬁnancial performance

and cost base. Regarding investor relations,

it is material in the management of Rank’s

capital markets proﬁle and awareness of

emerging risks and requirements. For our

Procurement Team, a key consideration is

indirect emissions management within the

downstream supply chain in order to meet

net zero expectations; and the management

of our land-based venues through

efﬁciencies in portfolio management with

decarbonisation of our property estate

material in reducing our direct emissions.

A holistic approach to decarbonisation can

only be achieved by considering climate

risk across all locations. The Managing

Director in Spain holds ultimate

responsibility for a net zero strategy for

our land-based Enracha venues, supported

by the Head of Transformation in Spain on

day-to-day operations. Aligning with the

overarching Group net zero strategy, the

business is developing a country-speciﬁc

net zero strategy for our Spanish

operations. This will be informed by the

energy assessment that we are conducting

for the these venues; a pilot programme

that is currently underway. To foster

awareness for this initiative, a country-wide

project was introduced to all employees at

the beginning of 2023/24, with involvement

from General Managers across all venues.

The Audit Committee is aware of climate

risk accounting considerations and the

potential impact of climate change on the

business. The Risk Committee considers

current and future climate-related

regulatory requirements and monitors

them on an ongoing basis, and climate

change is currently considered low risk on

the Risk Register. This Group Risk Register

is also informed by the risk registers held at

business unit level from Mecca, Grosvenor,

Rank Interactive and Rank International.

As well as receiving internal information,

the Board is given updates by our external

consultants and this year received a

presentation from ESG specialists on

TCFD reporting and net zero planning.

Climate-related issues factor into the

Board’s decision-making processes,

speciﬁcally around the strategic

management, operational implementation

and requirement for capital expenditure.

A signiﬁcant component of the annual

budget is the continued investment into

our real estate; current considerations

include insulation, lighting, and heating,

ventilation and air conditioning control.

Climate-related issues will continue to

be a matter for the Board in reviewing

and guiding performance objectives,

monitoring and performance.

Management oversight

The approach taken to managing climate-

related risks and opportunities is not static

but reﬂects continuous monitoring and

assessment of these issues, their potential

impact upon the business, and the Group’s

impact on the environment. The Risk

Committee considers current and future

climate-related regulatory requirements

and monitors them on an ongoing basis.

Currently climate change, though an

emerging risk, is considered a low

physical risk to the Company across all

time horizons, and is therefore a low risk

on the Risk Register. This Group Risk

registers held at business unit level from

Mecca, Grosvenor, Rank Interactive and

Rank International.

The Net Zero Working Group continues

to assess any vulnerabilities over various

time horizons. The key drivers for our

recognition of climate change as low

risk are principally transition risks.

We are mindful that there are also certain

physical risks that may impact some of our

operating sites. Consideration to address

all of these risks is being built into our

net zero investment strategy.

The responsibility for both establishing

the direction and implementation of our

approach to climate-related risk and

opportunities sits with our Executive

and Management Teams. This year,

we established an ESG Steering Group

(‘ESG-SG’), led by our Director of IR and

ESG. The ESG-SG plays a strategic role by

setting out the ESG-related objectives for

the Group, which includes climate-related

matters. Operationalisation of this strategy

is delegated to the ESG Working Group

(‘ESG-WG’), led by our ESG Strategic

Programme Lead.

“

We are in a much stronger position as it relates to

legislative requirements, particularly on environmental

regulation. Having received training from our ESG

consultants on reporting in this space, the Board

and ESG & Safer Gambling Committee have a more

complete understanding of what is required of the

business and have led in stepping up to meet those

requirements. We now have interim net zero targets

in place, supported by a carbon reduction plan.”

Katie McAlister

Chair of ESG & Safer Gambling Committee

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

Strategy

The Net Zero Working Group is deﬁning

a comprehensive decarbonisation and

investment strategy across the UK

portfolio. These investments will support

the Group’s stated ambitions, and the

upfront capex should positively impact

the long-term opex requirement, with the

introduction of more energy-efﬁcient and

cost-effective solutions. The inclusion of

climate assessment criteria into the project

approval process for all areas of the

business further integrates climate-risk

consideration into our operations.

As set out in our net zero pathway above,

Rank is to invest £57m in climate-related

and aligned initiatives over the next 12 years

within the UK. At present, the Board believes

that the £57m budget will be allocated in

approximately equal tranches over the next

12 years. However, as our understanding

of our portfolio improves over the next

few years, due to the use of the Mindsett

technology, the speed of investment may

alter. It’s important that this quantum

is allocated and communicated to our

stakeholders, but equally we believe

these investments should be informed

by reliable data. Key functions, such as

property, will be the most signiﬁcant areas

for investment. The allocation of capital for

projects supporting our net zero targets

will undergo strategic and ﬁnancial

review, inclusive of new PMO screening.

Rank takes into consideration the

useful life of the organisation’s assets

or infrastructure and the fact that

climate-related issues often manifest

themselves over the medium and longer

terms. In 2021/22, Rank’s accounting team

assessed climate-related matters that may

impact the Group’s ﬁnancial statements.

“

The Net Zero Working

Group is defining a

comprehensive

decarbonisation and

investment strategy

across the UK portfolio.”

Findings of assessment of climate-related matters

on Group’s financial statements

Area of assessment

Potential impact

Intangible assets, property, plant

and equipment, leased assets

Climate-related risks may have a

substantive ﬁnancial or strategic impact of

the Group’s business, affecting the useful

lives and residual values of intangible and

tangible assets. It could be determined

after assessment that useful lives may

need to be reduced and depreciation

and amortisation accelerated.

Impairment of assets

Impairment indicators will include any

signiﬁcant changes in the technological,

market, economic or legal environment

that negatively impact the Group.

Increased awareness of the consequences

of environmental change is triggering

regulatory action, which is affecting

stakeholders’ perspectives.

Provisions

As the Group takes action to address the

consequences of climate change, these

actions may result in the recognition of

new liabilities or, where the criteria for

recognition are not met, new contingent

liabilities may have to be disclosed.

Fair value measurement

The Group will ensure that fair value

measurements appropriately consider the

relevant climate-related risk factors. Climate

change can have a tangible effect on

assets and liabilities now and in the future

(e.g. rising water levels, changing weather

patterns, increased pollution levels etc).

Summary findings

The Group constantly monitors the latest

government legislation in relation to

climate-related matters. As of the year end,

there is no legislation in place that will

ﬁnancially impact the Group. Should a

change be required, key assumptions used

in value in use calculations and sensitivity

to change assumptions will be adjusted.

Management has are assessed that there

is no material impact to the ﬁnancial

statements due to climate related matters.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Climate-related risks

and opportunities

The Group has identiﬁed climate-related

risks that could have a material ﬁnancial

impact on the business, assessing the

potential outcomes of each risk, describing

the mitigating activities undertaken, and

including the timeframe for impact. These

are consistent with the assessment in

FY 2022. We deﬁne the short, medium, and

long-term time horizons as the following:

short – present to 2030; medium – 2030

to 2040; and long – 2040. The ﬁnancial

impact of differing levels of risk are deﬁned

as follows: low – managed as part of

existing processes; medium – additional

mitigation or investment required; and

high – signiﬁcant investment required and

considered material risk to the business.

Climate change presents some

opportunities also. Organisations that shift

their energy usage towards low-emission

energy sources can potentially reduce

their annual energy costs. Furthermore,

innovation and development of new

low-emission products and services may

improve competitive positioning and

capitalise on shifting consumer and

producer preferences.

Climate-related risks are not anticipated

to have a material ﬁnancial impact on the

business. However, such issues do mean

an adjustment in the Group’s strategy to

accommodate greater recognition of

climate risk, as well as how this is

assessed, resourced and communicated

to stakeholders. The Board, Executive and

working groups will continue to monitor

all climate-related issues.

Transition Risks

Transitioning the business to meet the requirements of a lower-carbon economy may entail extensive policy, legal, technology and

market changes to address mitigation and adaptation requirements related to climate change.

Type

Risk description

Potential outcomes

Mitigating activities

Timeframe

Policy and

Legislation

That Rank is not

able to respond

to increasingly

stringent reporting

obligations to

the frequency or

quality required.

Legal and/or reputational issues, which in

turn drive compliance costs and potentially

impact cost of capital.

Financial impact: low

Monitor potential

legislative and regulatory

changes. Considering

ability to achieve net zero

by 2035 target. Working

to deﬁne net zero strategy

and set interim targets.

Short to

medium

That nation states

may introduce

carbon emission

levies, placing

an additional

fee upon energy

consumption costs.

This may increase Rank’s operating costs.

Financial impact: low to medium

Assess property portfolio

to determine investment

programmes that make

building more energy

efﬁcient, less carbon

intensive. Seek to source

green energy.

Short

That new climate-

related laws

or regulations

for which Rank is

not prepared for.

Rank may be subject to an increase in accounting

provisions, not initially budgeted for. This may

impact proﬁtability. Rank may be subject to

increased compliance costs.

Financial impact: low

Deﬁne decarbonisation

strategy to remain ahead

of regulation.

Short to

medium

Technology

advances

introducing more

environmentally-

friendly equipment

to replace existing

IT infrastructure.

Whilst Rank does not rely on carbon-intensive

assets for value generation it nevertheless uses IT

equipment to fulﬁl a variety of functions, including

online gaming platform IT infrastructure and

general business/operating IT infrastructure.

This infrastructure may suffer a reduction in

useful life driven by major advances in IT energy

efﬁciency, driving increase in depreciation and

amortisation costs.

Financial impact: low

We regularly invest

in our equipment.

As more energy efﬁcient

machines are introduced

to the market, these

will naturally be

integrated into our

infrastructure through

our investment cycles.

Short to

medium

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

Transition Risks continued

Type

Risk description

Potential outcomes

Mitigating activities

Timeframe

Market

Climate induced

changes to customer

preferences

for leisure.

Changes in consumer preferences may encourage

more players to play online at home, rather than

incur possible transportation emissions and

continued utilisation of inefﬁcient spaces.

Regarding temperature changes affecting

consumer preferences, we have noted different

behaviours in the UK and we are monitoring

this in Spain as well.

Financial impact: low

Formalise and

communicate clear

decarbonisation strategy.

Long

Supply chain

cost inﬂation.

Increased costs related to the use of new

environmentally friendly materials or processes

could result in contracts previously expecting

to be proﬁtable becoming loss making.

Financial impact: low

Commencing Scope 3

assessment to better

understand Rank’s

exposure to high

emitting sections of

its value chain. In time,

will seek increased

information regarding

climate risk exposure

from key suppliers.

Medium

Reputational

Failure to meet

internal or external

stakeholder

climate-related

expectations,

impacting relations.

Perceived higher risk investment, increasing cost

of capital with investors, ﬁnancial institutions and

insurers. Reduced revenues due to challenges in

attracting new talent and increased opex from

employee turnover.

Financial impact: low to medium

Deﬁne and communicate

our net zero ambitions.

Short

Physical Risks

Physical risks resulting from climate

change can be event-driven (acute)

or due to longer-term shifts (chronic)

in climate patterns.

During the year, the Group conducted

a desktop assessment to review the

perceived ﬂood risks of our UK and

Spanish operations.

This research utilised data from the

UK Government, Scottish Environment

Protection Agency (‘SEPA’), and Natural

Resources Wales, and ThinkHazard!,

an online tool developed by the Global

Facility for Disaster Reduction and

Recovery (‘GFDRR’).

11 of the 107 venues in the UK were

identiﬁed as high risk from surface water,

river or coastal ﬂooding. The Group

monitors these sites closely and we have

ﬂood contingency plans in place for each

venue. Investment into potential ﬂood

defences is based on a variety of

commercial and leasehold factors, which

the Group is presently working through.

Financial assessment is conducted on our

high-risk sites, but it is deemed not material

enough to inﬂuence future investment

decisions regarding if a site is retained.

This underscores the low risk of climate

change from a physical perspective,

impacting our future cash ﬂows. This is our

current analysis on the physical risks posed

by climate change – whilst the physical risk

may change over time, we do not believe

ﬁnancial materiality will.

Currently, we believe there is little to

no impact from the physical risk presented

in Spain on our ﬁnancial performance.

The more management information we

gather through our energy assessments

in the UK and Spain, the better informed

we will be on the physical risks presented

by climate change.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Physical Risks

Type

Risk description

Potential outcomes

Mitigating activities

Timeframe

Extreme

weather

events like

drought,

ﬂooding

and storms

Damage to our

properties and

vehicles which will

incur increased

capex and

insurance costs.

Impacts of supply chain disruption from

increased severity of extreme weather events

may impact opex and capex, as well as impact

revenue if customer demands for online

entertainment cannot be met.

Financial impact: low to medium

Business continuity

and crisis management

plans in place

Short

to long

Changes

in average

climate

conditions

including

rising sea

levels, coastal

ﬂooding and

increased

average

temperatures

Increased operating

costs driven by

the increased use

of climate control

systems across

our properties.

Increased maintenance and insurance costs.

Financial impact: low to medium

Investment into

property portfolio

Short

to long

Flood Risk assessment for UK and Spanish venues

UK venues

Surface water

Rivers

Coastal

High risk

8.5%

1.9%

0.9%

Medium risk

17.9%

3.8%

–

Spain venues

Surface water

Rivers

Coastal

Medium risk

–

11.1%

–

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

Scenario analysis

To evaluate the resiliency of the Group’s strategies to climate-related risks and opportunities, in FY 2022 we conducted an analysis

on two different possible scenarios: the rise in global temperature is limited to less than two degrees, or the global temperature rises

by more than two degrees. The risks and opportunities to the Group under each scenario are presented below against short, medium

and long-term time horizons.

<2°C scenario

Our less than 2°C scenario assumes that we act responsibly, improve the efﬁciency of our portfolio by working with our landlords,

and reducing our GHG emissions. This may include the introduction of carbon pricing by national governments. We consider transition

risks to pose the greater threat to our business under this scenario, with only a limited and manageable impact on our operations from

physical risks. We considered the IEA’s net zero scenario in developing this scenario.

Short term (to 2030)

Medium term (2030 to 2040)

Long term (beyond 2040)

Risks

Higher transition risks associated

with moving to a low-carbon economy

–

Compliance risk if we fail to meet

regulatory requirements, including

emissions reporting obligations.

–

Reputational risk with investors,

customers and employees, if we do not

adequately address climate change.

–

Increased cost of climate-related levies/

increased pricing of greenhouse gas

(GHG) emissions.

Risks

Continued transition risks

–

Continuing compliance risk if we

fail to meet regulatory requirements,

including emissions reporting

obligations.

–

Increasing reputational risk with

investors, customers and employees,

if we do not adequately address

climate change.

–

Increased cost of climate-related levies/

increased pricing of GHG emissions.

–

Changing customer behaviour.

Risks

–

Less signiﬁcant increase in physical

risks Continued isolated extreme

weather events causing manageable

direct business disruptions to ofﬁce

locations, and impacts to suppliers

in our moderate supply chain.

–

Higher summer temperatures and rapid

changes in temperature and humidity

causing challenges for venue cooling,

and increases in energy costs across

our venues and ofﬁces.

Opportunities

–

Deﬁne net zero strategy to meet increasing stakeholder expectations.

–

Potential to develop a zero-emissions online product, or facility that allows customers to offset.

–

As demand for more energy efﬁcient infrastructure and equipment increases in the market, so demand will increase which is likely

to reduce costs. This will enable investment that will ultimately reduce energy costs.

>2°C scenario

This scenario assumes global climate policy is less effective and unabated GHG emissions cause climate change above that envisaged

by the Paris Agreement. Under this scenario, informed by the IEA’s SDS scenario, we would expect physical risks to become much

more apparent in the longer term, outweighing transitional risks.

Short term (to 2030)

Medium term (2030 to 2040)

Long term (beyond 2040)

Risks

Slight increase in transition and physical

risks in the short term

–

Isolated and manageable business

disruptions caused by extreme weather

events, such as ﬂooding or drought.

–

Insurance costs rise in step with

increase in physical damage

to properties.

–

Ad hoc supply chain interruptions.

Risks

Increasing physical risks due to

a failure to adequately transition

to a low-carbon economy

–

Increase in energy costs as traditional

energy sources become more

constrained, whilst under-investment

into cleaner energy fails to bridge

energy demand gap.

–

Flooding at certain high-risk venues

due to increased sea level.

Risks

Increased physical risks due to

a failure to adequately transition

to a low-carbon economy

–

Increase in energy costs.

–

Flooding at certain high-risk

venues due to increased sea level.

Opportunities

–

Identify higher-risk properties within the portfolio to either invest in or to consider exiting to stave off future

reparation and increase in insurance costs.

–

Engage with supply chain to ensure availability of mission critical supplies.

Conclusion

Following our assessment, we believe that the business is resilient under either scenario. Whilst we consider transition risks to be of

greater threat to the business under the <2°C scenario, we believe that our ongoing efforts under our Pathway to Net Zero mean we are

mitigating risk in this area.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Qualitative vs quantitative

scenario analysis

The TCFD recognises that a qualitative

assessment is a reasonable ﬁrst step in

conducting scenario analyses of climate

risk, at different temperature pathways.

Underpinned by the gathering of

experiential information from different

Group functions (such as property and

ﬁnance). Management has gathered an

understanding of how climate change

could impact the business, whilst

identifying potential data points that

will require more robust monitoring

and analysis.

The ability to explore the implications

of non-quantiﬁable information makes

qualitative scenario analysis well-suited

to assessing transitional climate risks

(such as regulation or carbon costs).

As qualitative scenarios only give high

level views of physical climate risks (such

as increased precipitation), we will look

to quantify the future potential impacts,

such as ﬂooding or extreme heat risk

on the business, however marginal the

scenario may be and the emerging nature

of the risk.

Risk management

In accordance with our assessment

of the risks posed by climate change

to our business, climate risk is included

as an emerging risk on the Company’s Risk

its own risk register, which feeds into the

overarching Group register, therefore

enabling a holistic view of risk for

the Company.

The potential size and scope of identiﬁed

climate-related risks is determined in

the same manner as any risk on the Risk

weighs ‘Impact’ against ‘Likelihood’.

Decisions to mitigate, transfer, accept,

or control climate-related risks are made

in the same manner as any risk on the Risk

standalone risk on our Risk Register and

is therefore integrated into the overall risk

management framework. Deﬁning climate

as an emerging risk also means that the

Audit Committee has general oversight of

this issue. Additionally, through guidance

from the ESG & Safer Gambling Committee,

the Audit Committee is encouraged to

consider climate-related matters when

assessing the following Principal Risks:

taxation (should a carbon price be

introduced); business continuity planning

and disaster recovery (should any physical

climate-related risks impact the business

or its supply chain – ﬂash ﬂooding etc.);

and people (desire to work for an employer

that is committed to net zero etc.).

To determine the relative signiﬁcance

of climate-related risks in relation to other

risks, we conducted a materiality

assessment, in 2021. This process,

engaging a range of stakeholders both

internal and external to the organisation,

placed climate risk as a low-risk matter,

relative to other ESG issues. We also

monitor the regulatory space in order to

be informed of any developments that could

impact the inﬂuence of climate-related

issues. Currently, some existing and

emerging regulatory requirements related

to climate change are considered a risk

by Rank.

To improve operational risk management,

Rank has established a Net Zero Working

Group (‘NZWG’), comprising a multi-

disciplinarian, cross-functional group

of internal and external personnel

(including ESG, climate-focused experts

and behavioural scientists to support the

rollout of each programme across the

Company). This group is focused upon

decarbonising Rank’s UK operations.

The NZWG comprises the Director of IR and

ESG, Director of Supply Chain, and Head

of Property and is coordinated by Rank’s

ESG Strategic Programme Lead.

Our real estate portfolio is the most

material carbon hotspot within the Scope 1

and 2 value chain. Consequently, this has

been designated the primary area of focus

for the NZWG, through the application of

technology within the top 40 most carbon

intensive sites (which comprise over 50%

of the Group’s carbon proﬁle). It will assess

energy efﬁciency of all equipment,

identifying improvement opportunities

and supporting any investment case

through decision-useful information

provided through dashboards.

The NZWG convenes frequently to assess

progress against the plan in order to set a

robust Interim net zero target for Scope 1

and 2 for the Group by 2035, and an

SBTi-aligned net zero target by 2050. This

is in line with national and international

targets. The Company is exploring whether

this timeframe can be brought forward

through the ongoing net zero assessment,

and the Net Zero Working Group is in the

process of advancing its integration of risk

and opportunity assessment. This includes

adjustment of business strategy, policies,

planning and governance systems with

clear performance objectives. The

implementation of our net zero strategy

will be delivered through three interrelated

workstreams: carbon reporting,

transformation (PMO and designing

investment plan), and cultural and

behavioural change.

To align with the Group net zero target,

we are developing a speciﬁc net zero

strategy for the Spanish portfolio, and

have initiated an energy assessment of the

land-based venues. To account for seasonal

variation in energy consumption (use of

HVAC being much higher in the summer

months), the project was launched in

Spring 2023. We began by assessing

energy use in one venue, gathering data

before implementing basic changes to

make energy savings. The next stage will

be to roll out this assessment to the three

venues with the largest carbon footprints.

Gathering data from four venues across

multiple months will provide a more

comprehensive picture of energy

consumption in the Spanish portfolio,

and support the creation of a realistic

net zero strategy.

Beyond this speciﬁc net zero strategy,

climate change considerations are now

integrated into the rest of the business in

a more structured and formalised manner.

Each new project introduced in any part

of the Group is reviewed against climate

assessment criteria that is built into the

project approval process.

Metrics and targets

In line with our maturation of strategy

and risk management, we will be setting

time-bound targets for the business.

Our NZWG is conducting an assessment

of the most energy intensive venues in

the UK portfolio, which will enable the

development of an informed and realistic

plan for achieving net zero across the

entire venues estate. We intend on

disclosing an SBTi-aligned plan for

reaching net zero by 2050, or earlier if

possible. To ensure we are progressing in

step with our own expectations, as well as

those of our stakeholders, we have set an

interim net zero target for Scope 1 and 2

emissions and speciﬁc Scope 3 elements

in the Group for 2035. These are based

around clear initiatives that include

building rationalisation, grid abatement,

PPA supply and various other energy

reduction measures.

“

To improve operational

risk management,

Rank has established a

Net Zero Working Group

(‘NZWG’), comprising

a multi-disciplinarian,

cross-functional group

of internal and external

personnel.”

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

By integrating climate considerations into

the approval process for projects, we will

use GHG emissions and carbon intensity

metrics to support the assessment and

qualiﬁcation of investments.

The metrics currently used by Rank

to assess climate-related risks and

opportunities in line with its strategy and

risk management process are Scope 1 and

2 emissions and a limited range of Scope 3

impacts. These are published as part of the

Group’s obligations to report in line with

Streamlined Energy & Carbon Reporting

(‘SECR’). A broader assessment is taking

place over the next reporting period, in

line with SBTi based methodologies.

SECR report

Objectives of this report

The Rank Group Plc are a quoted company

and are therefore required to report their

global greenhouse (GHG) emissions

through their annual reports. This report

has been prepared to support their

compliance with the Directors’ Report

under Part 15 of the Companies Act 2006

(Strategic Report and Directors’ Report),

requiring the disclosure of their energy

use and GHG emissions.

Scope boundaries

The Rank Group Plc have used an

operational control approach to deﬁne their

GHG emissions boundary, as they have full

authority to introduce and implement its

operating policies at their operations. Rank

are reporting at group level and therefore

must take into account not only their own

energy and carbon information, but also

the information of any subsidiaries

included in the consolidation which are

quoted companies, unquoted companies

or LLPs. The Group will therefore include

the following entities within the overall

emission calculated in this report:

Grosvenor Casino Limited; Grosvenor

Casinos (GC) Limited; Mecca Bingo

Limited; Enracha (Spain). The mandatory

reporting for The Rank Group Plc captures

emissions from their global operations,

which are UK and Spain, relating to

activities from stationary combustion

i.e. combustion of gas, mobile combustion

i.e. fuel used in transport for business

purposes, fugitive emissions

i.e. refrigerants used in air conditioning

and the purchase of electricity by the Group

for its own use, including for the purposes

of transport. In addition to reporting on

the mandatory scope, The Rank Group Plc

have chosen to also voluntarily report on

emissions resulting from electricity

transmission and distribution losses, air

travel and waste disposal. The Group has

taken guidance from the UK Government

Environmental Reporting Guidelines

(March 2019), the GHG Reporting Protocol

– Corporate Standard, and from the UK

Government GHG Conversion Factors for

Company Reporting document for calculating

carbon emissions. The information has

been collected and reported in line with

the methodology set out in the guidelines,

and the emissions have been calculated

using the 2022 UK Government GHG

conversion factors. This report covers the

reporting period July 2022 to June 2023,

which is in line with the Group’s ﬁnancial

reporting period.

Supporting material

An emissions data ﬁle has been compiled

according to a speciﬁcation agreed with

Rank that is in accordance with the

reporting guidelines. The supporting data,

as supplied by Rank and relevant third-party

suppliers as applicable, is held in an

evidence pack and supplementary

databases. This supporting data is held

by Consultus International Group and

can be made available on request.

Quantification and reporting

methodology

The Group has taken guidance from the

UK Government Environmental Reporting

Guidelines (March 2019), the GHG

Reporting Protocol – Corporate Standard,

and from the UK Government GHG

Conversion Factors for Company Reporting

document for calculating carbon emissions.

Energy usage information (gas and

electricity) has been obtained directly

from our energy suppliers and half-hourly

(HH) data, where applicable, for the HH

supplies. For supplies where there wasn’t

complete 12 month energy usage

available, ﬂat proﬁle estimation techniques

were used to complete the annual

consumption. Transport mileage and/or

fuel usage data was provided for their

company and employee owned vehicles.

For business travel in employee owned

vehicles where the employee is reimbursed

for the mileage travelled, there is limited

information available. We have therefore

had to use conversion factors for an

average vehicle with an unknown fuel

type. CO

e emissions were calculated

using the appropriate emission factors

from the UK Government GHG conversion

information with the exception of Spain

electric which is from Carbon Footprint.

For purposes of ongoing comparison,

it is required to express the GHG

emissions using a carbon intensity metric.

The intensity metric chosen is £m NGR.

Rank’s NGR for 2022/23 was £681.9m, with

a carbon intensity ratio of 36.6 tCO

e per

£m NGR (for 2021/22 it was 41.7).

Carbon intensity ratio

2022/23

tCO

e per

£m NGR

2021/22

tCO

e per

£m NGR

Greenhouse gas

emissions intensity

36.6

41.7*

The ﬁgure for 2021/22 has been restated.

“

By integrating climate

considerations into the

approval process for

projects, we will use GHG

emissions and carbon

intensity metrics to

support the assessment

and qualification of

investments.”

Don Pelayo

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Overall Group Position kWh

Source

2022/23

kWh

2021/22

kWh

% of 2022/23

total

Change +/-

Gas

58,804,557

63,554,204

47%

-7%

Electricity

60,963,973

61,279,863

49%

-1%

Business Travel

4,849,493

3,993,358

21%

Total

124,618,023

128,827,425

100%

-3%

UK Group Position

Source

2022/23

kWh

2021/22

kWh

% of 2022/23

total

Change +/-

Gas

58,242,616

63,110,578

49%

-8%

Electricity

57,009,987

57,120,020

47%

Business Travel

4,849,493

3,993,358

21%

Total

120,102,096

124,223,956

100%

-3%

Company travel 2021/22 includes all Scope 1 and Scope 3 data.

Spain Group Position

Source

2022/23

kWh

2021/22

kWh

% of 2022/23

total

Change +/-

Gas

561,940

443,626

12%

27%

Electricity

3,953,987

4,159,843

88%

-5%

Total

4,515,927

4,603,469

100%

-2%

GHG Emissions Summary

2022/23

2021/22

Source

tC0

Change +/-

Gas (Scope 1)

10,734

43.2%

11,641

-8%

Company transport (Scope 1)

142

0.6%

551

-74%

Employee transport (Scope 3)

599

2.4%

206

191%

F-Gases (Scope 1)

153

0.6%

145

Electricity (Scope 2)

11,632

46.8%

12,897

-10%

Transmission & losses (Scope 3)

1,078

4.3%

1,089

-1%

Air travel (Scope 3)

433

1.7%

198

119%

Waste (Scope 3)

0.3%

112

-27%

Total

24,853

100%

26,840

196%

Source

2022/23

2021/22

Scope 1 (mandatory)

11,029

12,337

Scope 2 (mandatory)

11,631

12,897

Mandatory total

22,660

25,235

Scope 3 (compulsory)

2,193

1,605

Total

24,853

26,840

Emission By Country

Source

Spain

Total (tCO

Gas (Scope 1)

10,632

102

10,734

Company Transport (Scope 1)

142

–

142

Employee Transport (Scope 3)

599

–

599

F-Gases (Scope 1)

153

–

153

Electricity (Scope 2)

11,024

608

11,632

Transmission & losses (Scope 3)

1,009

1,078

Air Travel (Scope 3)

433

–

433

Waste (Scope 3)

–

Total

24,074

779

24,853

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

This is our second year of reporting against the recommendations of the TCFD, a requirement under Financial Conduct Authority

(‘FCA’) listing rules. In line with the intentions we set last year, we have strengthened our climate-related governance, strategy, risk

management, and metrics and targets. Our disclosures are not yet fully consistent with the TCFD recommendations, and in such cases

we have explained why and provided a description of the priority actions to be taken to close the gaps.

Pillar

Recommendation

Location

Consistency statement 2022/23

Governance

Describe the Board’s oversight

of climate-related risks and

opportunities.

pages 59 to 60

Consistent

Continue to keep the

Board informed of climate-

related risks.

Describe management’s role

in assessing and managing

climate-related risks and

opportunities.

page 60

Consistent

Continue to communicate

the progress of the net zero

strategy development up to

the Board.

Strategy

Describe the climate-related

risks and opportunities the

organisation has identiﬁed

over the short, medium and

long term.

pages 62 to 64

Consistent

Develop the net zero strategy

with clear time horizons.

Describe the impact of

climate-related risks and

opportunities on the

organisation’s businesses,

strategy and ﬁnancial planning.

pages 61 to 65

Consistent

Utilise the results of the

energy assessment to develop

an informed investment

strategy for the decarbonisation

workstreams. Provide training

to colleagues to instigate

behavioural change within

the Group.

Describe the resilience of

the organisation’s strategy,

taking into consideration

different climate-related

scenarios, including a 2°C

or lower scenario.

page 65

Consistent

Continue to monitor the

resilience of our strategy under

climate-related scenarios.

Risk management

Describe the organisation’s

processes for identifying and

assessing climate-related risks.

page 66

Consistent

Implement energy use

dashboards to inform decision-

making and preventative

maintenance across portfolio.

Describe the organisation’s

processes for managing

climate-related risks.

page 66

Consistent

Continue to evolve the NZWG

and embed it more ﬁrmly

within the organisation,

alongside the workstreams

for employee education

and engagement.

Describe how processes

for identifying, assessing

and managing climate-related

risks are integrated into

the organisation’s overall

risk management.

page 66

Consistent

Complete the development

of risk and opportunity

assessment and implement

net zero strategy.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Pillar

Recommendation

Location

Consistency statement 2022/23

Metrics and targets

Disclose the metrics used

by the organisation to assess

climate-related risks and

opportunities in line

with its strategy and risk

management process.

pages 66 to 67

Partially consistent

To disclose opportunity metrics,

informed by the learnings of

the energy assessment.

Disclose Scope 1, Scope 2

and, if appropriate Scope 3

greenhouse gas (‘GHG’)

emissions and the related risks.

pages 67 to 68

Consistent

Assess the 15 categories of

Scope 3 emissions to better

understand this footprint.

Describe the targets used

by the organisation to manage

climate-related risks and

opportunities and performance

against targets.

pages 66 to 67

Partially consistent

To disclose an SBTi-aligned

plan for reaching net zero.

“

We have strengthened

our climate-related

governance, strategy,

risk management, and

metrics and targets.”

The Rank Group Plc

Annual Report 2023

Our approach to ESG

Continued

Community

Key Performance Indicators:

283

Total charitable funds raised

Local community impact

We know that we play a central role

in the communities in which we operate.

Our venues often serve as a social hub,

and our Mecca clubs in particular are a

key place for interaction amongst our older

cohort of customers. Having established

close ties with local residents, charities

and groups during the pandemic, it was

important to us that we maintained those

connections and utilised our position to

facilitate even more positive outcomes

for these communities.

At club level the nature of the charitable

activities undertaken is driven by local

need, from providing spaces in our venues

for groups to use as meeting places or for

events, to employees fundraising for

charitable causes that are close to their

hearts. This venue-based approach

resonates with our employees, creating

tangible impact in the communities which

they are often a part of themselves.

Highlights:

–

In Wrexham, the local MP used Mecca’s

venue to hold clinics, employees donated

for a Christmas Hamper campaign for

families and individuals in need, and

the club raised money to fund the

transport of products to Ukraine.

–

At our Swansea location, the club has

continued to support partnerships

established by their local MP, including

acting as a hub for donation of gifts as

part of the Everyone Deserves an Easter

campaign, and opening their venue

for a Feed the Homeless initiative.

–

In Blackpool, we sponsored the city’s

Pride event, prepared thousands of meals

for homeless people and held the KAV

Cup poker event raising funds for charity.

Group-wide partnership

As well as our localised initiatives,

we have a long-standing, Group-wide

partnership with Carers Trust in the UK,

and this year alone raised £283,000 for the

charity. We established Rank Cares Grants,

a grant programme to which carers can

apply to receive. The grants are offered

under three brackets: Carers Essentials

Fund, contributing to the cost of vital

equipment such as washing machines,

cookers, fridge freezers or beds; Carers

Take Time Out Fund, offering carers time

out from caring to relax, do something for

themselves and recharge their batteries;

and Carers Skills Fund, enabling carers

to learn new skills to help them with

caring or to return to work.

Our efforts were recognised at the

2023 European Casino Awards, where

we won the Corporate Community

Engagement Award.

“

As well as our localised

initiatives, we have

a long-standing,

Group-wide partnership

with Carers Trust in the

UK, and this year alone

raised £283,000 for

the charity.”

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

For the 12 months

ended 30 June 2023

NGR increased by 6%

to £681.9m following

an improved

NGR performance

across a majority

of the Group’s

business units.

Richard Harris

Chief Financial Ofﬁcer

Within this section all prior year

comparatives are to the year ended

30 June 2022.

Reported net gaming revenue

(‘NGR’)

For the 12 months ended 30 June 2023

NGR increased by 6% to £681.9m following

an improved NGR performance across a

majority of the Group’s business units.

Operating profit

The Group delivered an operating loss

of £109.8m for the year, compared to an

operating proﬁt of £80.8m, principally due

to higher impairment charges of £118.9m,

higher operating costs and a VAT refund in

the prior year.

Energy costs are a signiﬁcant cost for

the Group and to provide the Group with

some certainty it has adopted an agreed

hedging policy. This allows the Group to

ﬁx a portion of its future energy costs up

to two years in advance, near term energy

costs can be ﬁxed up to 100%. Regarding

2023/24, 70% of the Group energy costs

have been ﬁxed and at current market

prices we expect 2023/24 energy costs

to be approximately £20m.

Separately disclosed items (‘SDIs’)

SDIs are items that are infrequent in

nature and/or do not relate to Rank’s

underlying business performance.

Total SDIs for the year ended 30 June 2023

were £101.5m.

The key SDIs in the year were as follows:

–

A basing of expected future

performance at the end of H1 2022/23

has resulted in an impairment charge

of £118.9m relating to 23 Grosvenor

venues, 70 Mecca venues and two

Enracha venues, as well as an

impairment of £182.6m in the parent

company accounts;

–

A £6.6m reversal of previously impaired

assets following a better than anticipated

performance and improved outlook

regarding seven Grosvenor venues;

–

Closure costs of £7.7m relating to

the closure of a number of Grosvenor,

Mecca and Enracha venues; and

–

Amortisation of acquired intangible

assets of £8.6m relating to the

acquisition of Stride Gaming, YoBingo

and the remaining shares in Rialto

(previously Aspers Online).

Further details regarding the SDIs can be

found in note 4 of the ﬁnancial statements.

The Rank Group Plc

Annual Report 2023

CFO’s review

Prior period restatement

During the year, the Group identiﬁed an

accumulated total of £2.2m of prior year

payment processing costs within the

Digital business which erroneously had

not been recognised in the prior year

ﬁnancial statements. Of the total value,

£1.3m relates to 2021/22, with £0.6m

relating to H1 2021/22 and £0.7m to H2

2021/22. The remaining £0.9m relates

to pre 2021/22.

Net financing charge

The £12.3m underlying net ﬁnancing

charge for the year ended 30 June 2023

was slightly lower than the prior year’s

charge of £13.4m principally due to lower

bank fee amortisation costs in the current

year. The underlying net ﬁnancing charge

includes £6.5m of lease interest calculated

under IFRS 16.

Cash flow and net debt

As at 30 June 2023, net debt was £172.9m.

Debt comprised £44.4m in term loans,

£18.0m of drawn revolving credit facilities

and £169.0m in ﬁnance leases, offset by cash

at bank of £58.5m. In the period, the Group

repaid £34.5m of the term loan in line with

the loan’s agreed amortisation schedule.

The Group ﬁnished the year with net debt

for covenant purposes of £19.1m.

Taxation

The Group’s underlying effective

corporation tax rate in 2022/23 was 8.8%

(2021/22: 23.5%) based on a tax charge of

£0.6m (excluding impact of rate changes

on deferred tax) on underlying proﬁt

before taxation. This is different to the

Group’s anticipated effective tax rate

of 16-18% for the year. This is mainly as

a result of lower than forecasted proﬁts

in UK operations.

The underlying effective corporation tax

rate for 2023/24 is expected to be 20-22%,

being below the UK statutory tax rate. The

tax rate is driven by some overseas proﬁts

being taxed at lower rates than the UK.

On a statutory basis, the Group had an

effective tax rate of 22.1% (2021/22: 22.7%)

based on a tax credit of £27.1m and total

loss of £122.7m. This is higher than the

effected tax rate on underlying proﬁt

because of the signiﬁcant level of

separately disclosed items which attract

a tax credit. Further details of the tax

charge are provided in note 6 of the

ﬁnancial statements.

Earnings per share (‘EPS’)

Basic EPS declined to a loss of 20.4p from a

proﬁt of 13.9p in the prior year. Underlying

EPS declined to 1.2p from 4.0p in the prior

year. For further details refer to note 9 of

the ﬁnancial statements.

Cash tax rate

In the year ended 30 June 2023, the Group

had an effective cash tax rate of (2.6)%

on total proﬁt before taxation (2021/22:

(13.3)%). The cash tax rate is lower than the

effective tax rate due to losses generated

by the UK operations during the period

resulting in no cash tax payable in the UK.

The Group is expected to have a cash tax

rate of approximately (14)-(16)% in the year

ended 30 June 2024. This is lower than the

effective tax rate due to the utilisation of

brought forward tax losses and refunds of

UK corporation tax expected from prior year

overpayments and loss carry back claims.

Richard Harris

Chief Financial Ofﬁcer

16 August 2023

Cash flow

2022/23

£m

2021/22

£m

Operating proﬁt from continuing operations

19.1

38.5

Depreciation and amortisation

60.1

67.4

Working capital

3.0

(6.2)

Other

2.5

(0.3)

Cash inﬂow from operations

84.7

99.4

Capital expenditure

(44.1)

(40.6)

Net interest and tax

(7.8)

(16.2)

Lease payments

(43.6)

(53.7)

Cash ﬂows in relation to SDIs

(9.5)

70.6

Net free cash ﬂow

(20.3)

59.5

Business acquisition and other

(0.5)

(0.7)

Business disposal

–

8.8

Total cash inﬂow

(20.8)

67.6

Opening net cash/(debt) pre IFRS 16

16.9

(50.7)

Closing net cash/(debt) pre IFRS 16

(3.9)

16.9

IFRS 16 lease liabilities

(169.0)

(181.7)

Closing net (debt) post IFRS 16

(172.9)

(164.8)

1. Restated.

Business updates

109.8

Operating loss driven by impairment

charges of £118.9m.

12.3

Net ﬁnancing charge slightly lower

than the prior year.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Alternative Performance Measures

When assessing, discussing and

measuring the Group’s ﬁnancial

performance, management refer to

measures used for internal performance

management. These measures are not

deﬁned or speciﬁed under UK adopted

International Financial Reporting

Standards (IFRS) and as such are

considered to be Alternative

Performance Measures (‘APMs’).

By their nature, APMs are not uniformly

applied by all preparers including other

operators in the gambling industry.

Accordingly, APMs used by the Group

may not be comparable to other companies

within the Group’s industry.

Purpose

APMs are used by management to

aid comparison and assess historical

performance against internal performance

benchmarks and across reporting periods.

These measures provide an ongoing

and consistent basis to assess

performance by excluding items that are

materially non-recurring, uncontrollable

or exceptional. These measures can

be classiﬁed in terms of their key

ﬁnancial characteristics.

Proﬁt measures allow management and

users of the ﬁnancial statements to assess

and benchmark underlying business

performance during the year. They are

primarily used by operational management

to measure operating proﬁt contribution

and are also used by the Board to assess

performance against business plan.

The following table explains the key APMs applied by the Group

and referred to in these statements:

APM

Purpose

Closest equivalent

IFRS measure

Adjustments to reconcile to primary

ﬁnancial statements

Underlying

like-for-like

(‘LFL’) net

gaming revenue

(‘NGR’)

Revenue

measure

NGR

–

Separately disclosed items

–

Excludes contribution from

any venue openings, closures,

disposals, acquired businesses

and discontinued operations

–

Foreign exchange movements

Underlying

LFL operating

proﬁt/(loss)

post-central

cost reallocation

Proﬁt

measure

Operating

proﬁt/(loss)

–

Separately disclosed items

–

Excludes contribution from

any venue openings, closures,

disposals, acquired businesses

and discontinued operations

–

Foreign exchange movements

–

Central cost reallocation

Underlying

LFL operating

proﬁt/(loss)

pre-central

cost reallocation

Proﬁt

measure

Operating

proﬁt/(loss)

–

Separately disclosed items

–

Excludes contribution from

any venue openings, closures,

disposals, acquired businesses

and discontinued operations

–

Foreign exchange movements

Underlying

proﬁt/(loss)

before taxation

Proﬁt

measure

Proﬁt/(loss)

before tax

–

Separately disclosed items

Underlying

(loss)/proﬁt

after taxation

Proﬁt

measure

Proﬁt/(loss)

after tax

–

Separately disclosed items

Underlying

(loss)/earnings

per share

Proﬁt

measure

Earnings/

(loss) per

–

Separately disclosed items

Free cash ﬂow

Cash

measure

Net cash

generated

from

operating

activities

–

Lease principal repayments

–

Cash ﬂow in relation to SDIs

–

Cash capital expenditure

–

Net interest and tax payments

The Rank Group Plc

Annual Report 2023

Rationale for adjustments

– Profit and debt measure

1. Separately disclosed items (‘SDIs’)

SDIs are items that bear no relation to the

Group’s underlying ongoing operating

performance. The adjustment helps users

of the accounts better assess the underlying

performance of the Group, helps align

to the measures used to run the business

and still maintains clarity to the statutory

reported numbers.

Further details of the SDIs can be found

in the Financial Review and note 4.

2. Contribution from any venue

openings, closures, disposals,

acquired businesses and

discontinued operations

In the current period (2022/23), the Group

closed one Grosvenor venue and 15 Mecca

venues. For the purpose of calculating

like-for-like (‘LFL’) measures its

contribution has been excluded from the

prior period numbers and current period

numbers, to ensure comparatives are

made to measures on the same basis.

3. Foreign exchange movements

During the year the exchange rates may

ﬂuctuate, therefore by using an exchange

rate ﬁxed throughout the year the impact

on overseas business performance can

be calculated and eliminated.

The tables below reconcile the underlying performance measures to the reported

measures of the continuing operations of the Group.

2022/23

£m

2021/22

£m

Underlying LFL net gaming revenue (NGR)

679.9

633.2

Open, closed and disposed venues

2.2

12.0

Foreign exchange (‘FX’)

–

(1.2)

Underlying NGR – continuing operations

681.9

644.0

Calculation of comparative underlying LFL NGR

2021/22

Reported underlying LFL NGR

644.0

2022/23 closed venues

(12.0)

2022/23 FX

1.2

Restated underlying LFL NGR

633.2

2022/23

£m

2021/22

£m

LFL underlying operating proﬁt

20.3

42.5

Opened, closed and disposed venues

(1.2)

(3.8)

–

(0.2)

Underlying operating proﬁt – continuing operations

19.1

38.5

Separately disclosed items

(128.9)

42.3

Operating (loss)/proﬁt – continuing operations

(109.8)

80.8

Calculation of comparative underlying LFL operating profit

2021/22

£m

Reported underlying LFL operating proﬁt

40.4

2021/22 restatement relating to digital cash

(1.3)

2021/22 opened and closed venues

(0.6)

2022/23 closed venues

3.8

2022/23 FX

0.2

Underlying LFL operating proﬁt

42.5

2022/23

£m

2021/22

£m

Underlying current tax (charge)

(0.6)

(9.6)

Tax on separately disclosed items

27.7

(10.5)

Deferred tax

–

3.2

Tax credit/(charge)

27.1

(16.9)

2022/23

Pence

2021/22

Pence

Underlying EPS

1.2

4.0

Separately disclosed items

(21.6)

9.9

Reported EPS

(20.4)

13.9

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Comparison of 2022/23 LFL performance to CY2019

Whilst year-on-year comparisons are now free from the material impacts of the pandemic experienced in calendar years 2020 and

2021, the Group continues to review performance against the 12 months to 31 December 2019 (CY 2019), the last comparable period

which was unaffected by COVID-19 and the more recent inﬂationary pressures.

NGR/£m

2022/23

CY 2019

Change

Grosvenor venues

306.3

359.7

(15)%

London

99.3

134.3

(26)%

Rest of UK

207.0

225.4

(8)%

Mecca venues

134.1

164.5

(18)%

Enracha venues

36.4

32.4

12%

Digital

202.9

144.3

41%

Underlying LFL Group

679.7

700.9

(3)%

Impact of venues openings, closures and FX

2.2

33.1

–

Underlying Group

681.9

734.0

(7)%

Operating proﬁt/£m

2022/23

CY 2019

Change

Grosvenor venues

27.7

74.3

(63)%

Mecca venues

4.0

30.9

(87)%

Enracha venues

9.2

7.7

19%

Digital

18.8

23.0

(18)%

Central costs

(39.4)

(34.6)

14%

Underlying LFL Group

20.3

101.3

(80)%

Impact of venues openings, closures and FX

1.2

3.5

–

Underlying Group

19.1

104.8

(82)%

Stride was acquired in October 2019 and has been included on a pro forma basis.

The Rank Group Plc

Annual Report 2023

Alternative Performance Measures

Continued

Reallocation of central costs

During the year, the Group undertook a review of the Group’s central costs and has concluded that a proportion of them, which

are directly attributable to the relevant business units, should be allocated to those business units, better reﬂecting the underlying

proﬁtability of each segment. This resulted in changes in the underlying proﬁt (loss) of each segment in the prior year which has

been re-presented in the table below.

Year ended 30 June 2023

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Segment revenue

202.9

306.3

136.3

36.4

–

681.9

Other operating income

–

Operating proﬁt (loss)

18.8

27.7

2.8

9.2

(39.4)

19.1

Separately disclosed items

(9.1)

(51.7)

(67.2)

(4.2)

3.2

(128.9)

Segment result

9.7

(24.0)

(64.3)

5.0

(36.2)

(109.8)

Central costs allocation

(5.0)

(11.4)

(9.8)

(0.1)

26.3

–

Segment result (post-central cost allocation)

4.7

(35.4)

(74.1)

4.9

(9.9)

(109.8)

Finance costs

(12.6)

Finance income

0.8

Other ﬁnancial losses

(1.1)

Proﬁt before taxation

(122.7)

Taxation

27.1

Proﬁt for the period from continuing operations

(95.6)

Year ended 30 June 2022 (re-presented)

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Segment revenue

183.3

296.6

134.0

30.1

–

644.0

Other operating income

–

2.6

1.0

–

3.6

Operating proﬁt (loss)

17.4

45.1

(0.8)

7.5

(30.7)

38.5

Separately disclosed items

(14.5)

15.5

34.4

7.6

(0.7)

42.3

Segment result

2.9

60.6

33.6

15.1

31.4

80.8

Central costs allocation

(4.1)

(8.9)

(6.9)

(0.1)

20.0

–

Segment result (post-central cost allocation)

(1.2)

51.7

26.7

15.0

(11.4)

80.8

Finance costs

(13.1)

Finance income

0.1

Other ﬁnancial gains

5.2

Proﬁt before taxation

73.0

Taxation

(16.9)

Proﬁt for the period from continuing operations

56.1

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Analysis of total costs by type and segment and how the central costs have been re-allocated:

Year ended 30 June 2023

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Employment and related costs

28.1

122.2

46.1

17.7

7.7

221.6

Taxes and duties

47.7

64.2

27.1

2.0

1.2

142.2

Direct costs

57.1

28.2

20.6

3.0

–

108.9

Property costs

0.8

11.6

6.5

0.6

0.5

20.0

Marketing

33.3

6.2

5.7

2.4

0.2

47.8

Depreciation and amortisation

14.3

28.8

10.9

1.5

2.5

58.0

Other

7.8

29.0

26.4

0.1

1.0

64.3

Total costs before SDI (post-central cost allocation)

189.1

290.0

143.3

27.3

13.1

662.8

Cost of sales

409.0

Operating costs

253.8

Total costs before SDI (post-central cost allocation)

662.8

Year ended 30 June 2023

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Employment and related costs

3.4

5.9

4.8

0.1

(14.2)

–

Taxes and duties

0.4

0.9

–

(2.2)

–

Direct costs

–

Property costs

–

Marketing

–

Depreciation and amortisation

0.1

1.0

0.9

–

(2.0)

–

Other

1.1

3.6

3.2

–

(7.9)

–

Central cost allocation

5.0

11.4

9.8

0.1

(26.3)

–

Cost of sales

–

Operating costs

–

Central cost allocation

–

Year ended 30 June 2023

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Employment and related costs

24.7

116.1

41.3

17.6

21.9

221.6

Taxes and duties

47.3

63.3

26.2

2.0

3.4

142.2

Direct costs

57.1

28.2

20.6

3.0

–

108.9

Property costs

0.8

11.6

6.5

0.6

0.5

20.0

Marketing

33.3

6.2

5.7

2.4

0.2

47.8

Depreciation and amortisation

14.2

27.8

10.0

1.5

4.5

58.0

Other

6.7

25.4

23.2

0.1

8.9

64.3

Total costs before SDI (pre-central cost allocation)

184.1

278.6

133.5

27.2

39.4

662.8

Cost of sales

409.0

Operating costs

253.8

Total costs before SDI (pre-central cost allocation)

662.8

The Rank Group Plc

Annual Report 2023

Alternative Performance Measures

Continued

Year ended 30 June 2022 (re-presented)

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Employment and related costs

27.8

109.0

47.3

14.7

6.9

205.7

Taxes and duties

40.7

61.0

25.6

1.6

0.2

129.1

Direct costs

49.4

23.6

19.9

2.4

–

95.3

Property costs

0.5

9.5

4.5

0.6

0.9

16.0

Marketing

33.2

5.9

5.8

1.7

0.1

46.7

Depreciation and amortisation

13.4

33.3

16.0

1.3

3.4

67.4

Other

5.0

20.7

23.6

0.4

(0.8)

48.9

Total costs before SDI (post-central cost allocation)

170.0

263.0

142.7

22.7

10.7

609.1

Cost of sales

386.5

Operating costs

222.6

Total costs before SDI (post-central cost allocation)

609.1

Year ended 30 June 2022 (re-presented)

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Employment and related costs

3.5

5.1

4.3

0.1

(13.0)

–

Taxes and duties

0.2

0.5

–

(1.2)

–

Direct costs

–

Property costs

–

0.8

–

(0.8)

–

Marketing

–

Depreciation and amortisation

0.2

0.9

–

(2.0)

–

Other

0.2

1.6

1.2

–

(3.0)

–

Central cost allocation

4.1

8.9

6.9

0.1

(20.0)

–

Cost of sales

–

Operating costs

–

Central cost allocation

–

Six months ended 31 December 2022 (unaudited and re-presented)

Digital

£m

Grosvenor

venues

£m

Mecca

venues

£m

Enracha

venues

£m

Central

costs

£m

Total

£m

Employment and related costs

24.3

103.9

43.0

14.6

19.9

205.7

Taxes and duties

40.5

60.5

25.1

1.6

1.4

129.1

Direct costs

49.4

23.6

19.9

2.4

–

95.3

Property costs

0.5

8.7

4.5

0.6

1.7

16.0

Marketing

33.2

5.9

5.8

1.7

0.1

46.7

Depreciation and amortisation

13.2

32.4

15.1

1.3

5.4

67.4

Other

4.8

19.1

22.4

0.4

2.2

48.9

Total costs before SDI (pre-central cost allocation)

165.9

254.1

135.8

22.6

30.7

609.1

Cost of sales

386.5

Operating costs

222.6

Total costs before SDI (pre-central cost allocation)

609.1

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Risk management

Improving our ability

to identify, mitigate,

monitor and review

key risks.

How we manage risk

Understanding, accepting and managing

risk are fundamental to Rank’s strategy

and success. We have a Group enterprise-

wide risk management framework and

approach, which is integrated into our

organisational management structure

and responsibilities. The aim of this is to

provide oversight and governance of the

key risks we face, as well as monitoring

upcoming and emerging risks and

performing horizon scanning over

the medium to long term.

Key or material risks are identiﬁed and

monitored through risk registers at a

Group level and within business units,

ensuring both a top-down and bottom-up

approach to risk management.

Over the past year we have continued

to enhance our Group enterprise risk

management framework and improve our

ability to identify, mitigate, monitor and

review key risks. For each principal risk

identiﬁed, the Risk Committee assessed

the likelihood and consequence, and

conﬁrmed a ‘risk owner’ who is a member

of the Executive Committee. The risk

owner is responsible for deﬁning and

implementing mitigations which are

reviewed for appropriateness and

monitored regularly.

Risk appetite

Deﬁning risk appetite is key in the process

of embedding the risk management system

into our organisational culture. Our risk

appetite approach is to minimise our

exposure to reputational, compliance and

excessive ﬁnancial risk, whilst accepting

and encouraging more risk in pursuit of

our purpose and ambition. As part of the

establishment of risk appetite, the Board

will consider and monitor the level of

acceptable risk it is willing to take in

each of the principal risk areas.

We recognise that our appetite for

risk varies according to the activity

undertaken, and that our acceptance

of risk is subject always to ensuring

that potential beneﬁts and risks are fully

understood before developments are

authorised, and that sensible measures

to mitigate risk are established.

Board

Role:

The Board has overall responsibility for

the risk management framework and for

establishing risk appetite, as well as

ensuring that the approach is embedded

into the operations of the business.

Specific activities:

Approves risk management framework

and processes. Sets risk appetite. Reviews

the Group’s risk proﬁle.

Risk Committee

Role:

The Group Risk Committee is responsible

for implementing the risk management

framework and processes, assessing and

managing risk and assisting the Board

and Audit Committee in their oversight

of risk and mitigation.

Specific activities:

Reviews Group risk register. Carries out

‘deep dive’ risk register reviews of speciﬁc

business areas. Identiﬁes and manages

risks as they arise. Provides forum to

ensure adequate and timely progress

of risk-mitigation actions. Considers

reports from compliance functions.

Audit Committee

Role:

The Audit Committee is responsible for

assessing the ongoing effectiveness of the

risk management framework and processes,

and for undertaking an independent review

of the mitigation plans for material risks.

Specific activities:

Oversees risk management framework,

controls and processes. Reviews action

plans to manage signiﬁcant risks.

Reviews Group risk register.

Group internal audit

Role:

Group internal audit helps to manage risk

identiﬁcation by conducting independent

audits of the risks to the business and

progress in mitigating action plans.

Specific activities:

Develops a risk-based internal audit

programme. Audits the risk processes

across the organisation. Receives and

provides assurance on the management

of risk. Reports on the efﬁciency and

effectiveness of internal controls.

Our risk management framework

Board

Group internal audit

Risk Committee

Audit Committee

Top-down

identiﬁcation

Bottom-up

identiﬁcation

Mitigate

Review

Monitor

Identify

The Rank Group Plc

Annual Report 2023

Principal risks and uncertainties

The Board has conducted a robust

assessment of the Company’s principal

and emerging risks. The risks outlined

in this section are the principal risks that

we have identiﬁed as material to the

Group. They represent a ‘point-in-time’

assessment, as the environment in which

the Group operates is constantly changing

and new risks may always arise.

Risks are considered in terms of likelihood

and impact and are based on residual risk

rating of: high, medium and low, i.e. after

taking into account controls already in

place and operating effectively. Mapping

risks in this way helps not only to prioritise

the risks and required actions but also to

direct the required resource to maintain

the effectiveness of controls already in

place and mitigate further where required.

The risks outlined in this section are not

set out in any order of priority, and do not

include all risks associated with the

Group’s activities.

Additional risks not presently known to

management, or currently deemed less

material, may also have an adverse effect

on the business. Risks such as these

are not raised as principal risks but are

nevertheless periodically monitored for

their impact on the Group.

Emerging risks

Our risk management processes include

consideration of emerging (including

opportunity) risks; horizon scanning

is performed with a view to enabling

management to take timely steps to

intervene as appropriate.

Our methodology used to identify emerging

risks includes reviews with both internal

and external subject matter experts,

reviews of consultation papers and

publications from within and outside the

industry and the use of key risk indicators.

Throughout the year some new risks have

emerged and developed which have been

monitored by management and action

taken when they started to crystallise.

The current economic pressures,

high rates of inﬂation and pressures on

disposable income are a cause for concern

for many consumers. The Executive

Directors continue to be vigilant of the

changing economic backdrop and the

impact on the Group.

Additionally, changes in the regulation of

the gaming market are monitored closely

and the Group continues to evolve

climate-related risks and opportunities.

However, climate risks are currently not

regarded as a principal risk and the risk

itself is currently considered low.

Principal risks and uncertainties

Summary Residual Risk

Yearly change

Uncertain trading

environment

Compliance with

gambling law and

regulations

Safe and sustainable

gambling

People

Strategic programmes

Health and safety

Data protection

and management

Cyber resilience

Business continuity

and Disaster Recovery

Dependency on third

parties and supply chain

Taxation

Liquidity and funding

In 2023

– One risk was removed: Pandemic

– One risk was introduced: Liquidity and funding

Impact

Likelihood

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Principal risk: 1

Uncertain trading environment

Yearly change

Principal risk

Consumers’ discretionary expenditure continues to be impacted

by inﬂationary pressures, volatile energy markets and higher

interest rates. Such pressures inﬂuence customer behaviour and

can reduce spend on entertainment and leisure activities such as

those offered by the Group, as well as their propensity to visit our

venues. This could impact our ﬁnancial performance and ability

to deliver on our strategic plans.

Moreover, various cost pressures are impacting the operating

margins of our venues businesses and this will be further

impacted if wage and other inﬂation remains high. Related risks

caused by current macroeconomic and geopolitical uncertainty

are energy availability and the increased cost of products and

services, all of which could impact our future performance.

Residual risk rating and change in risk impact

Considered high residual risk and stable.

With the current trading environment, inﬂationary pressures,

energy prices remaining above historic norms, increases in

interest rates and labour shortages impacting the leisure sector

in particular, the risk here is considered high.

Risk mitigation strategy

We are actively monitoring the situation and continue to put

contingency measures in place to manage these risks, including:

–

strategic plans have been prepared with current consumer

pressures in mind. We have adapted our approach to ensure

future plans are sufﬁciently robust to deal with the uncertain

trading conditions.

–

monitoring economic developments and undertake scenario

analysis where appropriate. In particular, the Group focuses

on impacts in the short and medium term that may result

from changes in customer behaviour.

–

ongoing review of operational plans to ensure that they are

robust and well managed.

–

undertaking regular insight and tracking work in relation to

our brands and continue to assess the relevance of our products

to our customers.

–

considering ways to manage the Group’s exposure in respect

of external conditions beyond its control, including forward

buying of energy and reviewing the extent of interest rate

risk exposure.

–

ensuring that our procurement team conducts tender processes

and leverages our scale to effectively control costs and ensure

pricing is competitive.

Governance and oversight of risk

Board.

Link to strategy

Pillars 2 and 3.

Principal risk: 2

Compliance with gambling laws

and regulations

Yearly change

Principal risk

Regulatory and legislative regimes for betting and gaming in key

markets are constantly under review and can change (including

as to their interpretation by regulators) at short notice. These

changes could beneﬁt or have an adverse effect on the business

and additional costs might be incurred in order to comply. Failing

to comply leads to an increased risk of investigation(s) and

regulatory action and sanctions by way of licence conditions,

ﬁnancial penalties and/or loss of an operating licence.

Residual risk rating and change in risk impact

Considered high residual risk and increasing.

There is ongoing increased regulatory focus on compliance

by regulators in the jurisdictions in which the Group operates.

The risk of potential non-compliance increases with the pace of

change in regulation, particularly when limited time is provided

to ensure compliance. Regulatory change in the UK is often

delivered through ad hoc Gambling Commission guidance which

is often open to interpretation; this further increases the risk of

a negative outcome from a regulatory compliance assessment.

Risk mitigation strategy

The Group ensures that:

–

it seeks ongoing and regular engagement with government,

key civil servants involved in determining gambling policy

and with regulators.

–

it monitors legislative and regulatory developments and

announcements in relation to prospective change.

–

it has deﬁned policies and procedures in place, which are

periodically reviewed and updated as appropriate to take

account of regulatory changes and guidance.

–

it has a dedicated compliance team led by an experienced

Director of Compliance & Safer Gambling, which monitors

implementation of and compliance with such policies and

procedures and provides regular reports to the venues’ senior

management, as well as to the Compliance and Group Risk

Committees. The Director of Compliance & Safer Gambling

also provides bi-annual reports to the Audit Committee.

–

its Compliance Committee meets on a monthly basis, with

agenda items including data trends, monitoring programme

outputs, proposed changes to compliance models, tools and

processes and trade association updates.

–

all colleagues undertake annual mandatory compliance

training (including anti-bribery and corruption and money

laundering), with additional training being undertaken as

required/requested or as may be appropriate to a speciﬁc role.

–

it actively promotes a compliant environment and culture

in which customers can play safely.

–

it engages with regulators as appropriate and examines

the learnings from, and measures adopted by, other operators

and sectors of the gambling industry.

Governance and oversight of risk

ESG and Safer Gambling Committee.

Link to strategy

Pillars 1, 2, 3 and 5.

The Rank Group Plc

Annual Report 2023

Risk management

Continued

Principal risk: 3

Safe and sustainable gambling

Yearly change

Principal risk

Safe gambling underpins our strategy with one of our ﬁve

strategic pillars being that we will build sustainable relationships

with our customers by providing them with safe environments

in which to play. This minimises the potential for our customers

to suffer harm from their gambling and will assist the Group

in ensuring that it grows the business in a sustainable way.

We are committed to delivering the highest possible levels

of player safety and protection.

Failure to provide a safe gambling environment for our customers

could have regulatory implications, affect trust in our brands and

impact our ability to build a sustainable business.

Residual risk rating and change in risk impact

Considered medium residual risk and stable.

Our most material ESG issue is to ensure the highest possible

levels of player safety and protection.

Risk mitigation strategy

The Group ensures that:

–

it actively promotes a safer gambling culture.

–

it interacts and engages with its customers on a regular basis.

–

it makes available a range of tools on all brands across all

channels to support customers in managing their spend

and play.

–

it invests continuously in the development of its people,

processes and technology, including with the assistance

of expert third parties, to introduce new and ongoing

improvements to enable it to identify and effectively interact

with at-risk customers.

–

it continues to invest in data analytics to better identify

potentially at-risk play by consumers and in the resultant

processes which deliver the appropriate interactions with

those customers and the ongoing evaluation of the

effectiveness of those interactions.

–

all colleagues undertake annual mandatory safer gambling

training, with additional training (including provided

externally, for example by GamCare) as required/requested

or as may be appropriate to a speciﬁc role.

–

it invests signiﬁcantly in improvements for tackling the

problem through donations to research, treatment and

education initiatives, as well as through driving collaboration

across the industry with other operators, charities and

regulatory bodies.

–

it has a dedicated and experienced ﬁrst and second line safer

gambling teams.

Governance and oversight of risk

ESG and Safer Gambling Committee.

Link to strategy

Pillars 1 and 5.

Principal risk: 4

People

Yearly change

Principal risk

Pivotal to the success of the organisation and a failure to attract

or retain key individuals may impact the Group’s ability to deliver

on its strategic priorities.

A prerequisite to achieving all the strategic priorities is ensuring

the Group has the right people with the right skills, deployed

within the right area of the business.

Residual risk rating and change in risk impact

Considered medium residual risk and stable.

The availability of colleagues and competition for talent continues

to be a focus area, particularly for our UK venues business post

both the pandemic and the impact of Brexit on the broader

hospitality sector.

Risk mitigation strategy

The Group ensures that it:

–

regularly engages with colleagues and reviews its reward

propositions in order to retain existing talent and attract

the best candidates to roles.

–

conducts benchmarking exercises in relation to its

compensation packages.

–

provides training and induction programmes to new joiners

tailored as appropriate for those who are new to the sector.

–

monitors attrition and recruitment rates.

–

is focused is on developing diversity across the Group.

–

continues to develop its succession plans.

–

offers opportunities for colleagues to develop their skills

and progress in their careers.

–

continues to consider the development of its culture, including

how this is viewed by colleagues in employee opinion surveys

and the actions that can be taken in light of the output.

–

regularly engage with trade union bodies and maintain

an open dialogue on matters impacting our colleagues.

Governance and oversight of risk

Board, Nominations and Remuneration Committees.

Link to strategy

Pillars 1, 2, 3, 4 and 5.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Principal risk: 5

Strategic programmes

Yearly change

Principal risk

Key projects and programmes could fail to deliver, resulting in

missed market opportunities for the Group, and/or take longer

to deliver, resulting in missed synergies and savings.

Residual risk rating and change in risk impact

Considered medium residual risk and stable.

Failure to deliver key strategic projects and programmes impacts

on customer loyalty and the strategic growth of the business and

therefore remains a medium residual risk but is also regarded

as stable.

Risk mitigation strategy

The Group ensures that programmes:

–

use a structured and disciplined delivery methodology to ensure

that they are robustly managed to achieve their outcome.

–

are subjected to detailed management oversight as well as

having sponsorship from a senior-level stakeholder.

–

follow a comprehensive risk management approach and are

managed by experienced project and programme managers.

Governance and oversight of risk

Board.

Link to strategy

Pillars 1, 2 and 3.

Principal risk: 6

Health and safety

Yearly change

Principal risk

Failure to meet the requirements of the various domestic

and international rules and regulations relating to the safety

of our employees and customers could expose the Group

(and individual Directors and employees) to material civil,

criminal and/or regulatory action with the associated ﬁnancial

and reputational consequences.

Residual risk rating and change in risk impact

Considered medium residual risk and stable.

No signiﬁcant changes in domestic and international

standards/regulations are anticipated in the short term.

Risk mitigation strategy

The Group ensures that:

–

it has deﬁned policies and procedures in place, which are

periodically reviewed and updated as appropriate.

–

it has a dedicated health and safety team led by an experienced

Head of Health and Safety, which monitors implementation

of and compliance with such policies and procedures and

provides regular reports to the venues’ senior management,

as well as to the Health and Safety and Group Risk Committees.

The Head of Health and Safety also provides bi-annual reports

to the Audit Committee.

–

all colleagues undertake annual mandatory training, with

additional training being undertaken as required/requested

or as may be appropriate to a speciﬁc role.

Governance and oversight of risk

Audit Committee.

Link to strategy

Pillars 3 and 5.

The Rank Group Plc

Annual Report 2023

Risk management

Continued

Principal risk: 7

Data protection and management

Yearly change

Principal risk

The inability to adequately protect sensitive customer data

and other key data and information assets that could be leaked,

exposed, hacked or transmitted would result in customer

detriment, formal investigations and/or possible litigation

leading to prosecution, ﬁnes and/or damage to our brands.

Residual risk rating and change in risk impact

Considered medium residual risk and stable.

The Group continues to develop and enhance its control

environment in relation to customer data controls and

regulatory requirements.

Risk mitigation strategy

The Group has in place data protection policies in order to protect

the privacy rights of individuals in accordance with GDPR and

other relevant local data protection and privacy legislation

(as applicable). These are monitored by an experienced Data

Protection Ofﬁcer (‘DPO’) to ensure that the business is aware of,

and adheres to, legal requirements and industry best practice.

The DPO provides regular reports to the Group Risk Committee

on relevant data and trends, monitoring programme outputs,

ongoing projects and any potential regulatory matters. The DPO

also provides bi-annual reports to the Audit Committee.

All colleagues undertake annual mandatory training, with

additional training being undertaken as required/requested

or as may be appropriate to a speciﬁc role.

Technology and IT security controls are in place to restrict access

to sensitive data and ensure individuals only have access to the

data they need to do their job. The Group also carries out periodic

penetration testing of security controls around data.

Governance and oversight of risk

Audit Committee.

Link to strategy

Pillars 1, 2 and 3.

Principal risk: 8

Cyber resilience

Yearly change

Principal risk

Cyber-attacks can disrupt and cause considerable ﬁnancial

and reputational damage to the Group. If a cyber-attack were

to occur, the Group could lose assets, reputation and business,

and potentially face regulatory ﬁnes and/or litigation –

as well as the costs of remediation.

Operations are highly dependent on technology and advanced

information systems (such as the use of cloud computing)

and there is a risk that such technology or systems could fail,

or outages occur.

Residual risk rating and change in risk impact

Considered medium residual risk and increasing.

Due to the programme of work in place and ongoing monitoring

and response to new and emerging attack vectors, this is

considered an increasing risk for the Group.

Risk mitigation strategy

The Group:

–

has a Security Operations Centre (SOC) and Vulnerability

Management service tools(s) to provide increased visibility

of security events and enable vulnerabilities to be monitored/

quickly addressed.

–

has in place security policies and procedures and conducts

training for colleagues to ensure ongoing awareness.

–

employs a dedicated, specialist Group security team.

–

carries out periodic attack and penetration testing, with

actions arising followed-up, tracked and remediated by the

security team.

–

follows a rolling programme of work to continue to enhance

cybersecurity and resilience within the IT estate.

Governance and oversight of risk

Audit Committee.

Link to strategy

Pillars 1, 2 and 3.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Risk management

Continued

Principal risk: 9

Business continuity

and disaster recovery

Yearly change

Principal risk

Planning and preparation of the organisation, to ensure it could

overcome serious incidents or disasters and resume normal

operations within a reasonably short period, is critical to ensure

that there is minimal impact to its operations, customers

and reputation.

Typical disasters might include: natural disasters such as

ﬁres and ﬂoods, pandemics, accidents impacting key people,

insolvency of key suppliers, events that result in a loss or lack

of availability of data or IT systems, negative media campaigns

and market upheavals.

Residual risk rating and change in risk impact

Considered medium residual risk and stable.

The geographical nature of the operating environment

and key risk exposures are known and understood.

Risk mitigation strategy

The Group seeks to develop, embed and reﬁne its approach to

incident and crisis management on an ongoing proactive basis.

Group business continuity plans are regularly reviewed for key

sites and business areas and this work includes reviewing the

resilience of and disaster recovery for IT systems.

Governance and oversight of risk

Audit Committee.

Link to strategy

Pillars 1, 2, 3 and 5.

Principal risk: 10

Dependency on third parties

and supply chain

Yearly change

Principal risk

The Group is dependent on a number of these for the operation

of its business. The withdrawal or removal from the market of one

or more of these third-party suppliers, failure of these suppliers

to comply with contractual obligations, or reputational issues

arising in connection with these suppliers could adversely affect

operations, especially where these suppliers are niche.

Residual risk rating and change in risk impact

Considered medium residual risk and stable.

The third-party operating environment and key risk exposures

have remained the same but the potential risk to supply chain

due to the current macroeconomic environment continues

to be monitored.

Risk mitigation strategy

The Group has a central procurement team that oversees the

process for acquisition of suppliers across the Group, utilising

a supplier risk management framework. Our policies and

procedures require due diligence to be carried out on suppliers.

We require that supplier contracts include, amongst other things,

appropriate clauses on compliance with applicable laws and

regulations, the prevention of modern slavery and anti-bribery.

We seek to work with suppliers who are actively managing

climate risks.

Business owners are responsible for communication with key

suppliers and are ultimately accountable for such relationships

and ensuring that contractual requirements are met.

Governance and oversight of risk

Audit Committee.

Link to strategy

Pillars 1, 2, 3, 4 and 5.

The Rank Group Plc

Annual Report 2023

Principal risk: 11

Taxation

Yearly change

Principal risk

Changes in ﬁscal regimes in domestic and international markets

can happen at short notice. These changes could beneﬁt or have

an adverse impact with additional costs potentially incurred

in order to comply.

Residual risk rating and change in risk impact

Considered low residual risk and stable.

Tax changes in the immediate future are not anticipated

to be material in their impact on the Group.

Risk mitigation strategy

The Group’s tax strategy is approved annually by the Board.

Responsibility for its execution is delegated to the Chief Financial

Ofﬁcer who reports the Group’s tax position to the Board on

a regular basis.

The Group ensures that it:

–

has an appropriately qualiﬁed and resourced tax team

to manage its tax affairs.

–

continues to monitor tax legislation and announcements

in relation to prospective change and, where appropriate,

participate in consultations over proposed legislation,

either directly or through industry bodies.

–

engages with regulators as appropriate.

–

performs analysis of the ﬁnancial impact on the Group

arising from proposed changes to taxation rates.

–

seeks external advice and support as may be required.

–

develops organisational contingency plans as appropriate.

Governance and oversight of risk

Board and Audit Committee.

Link to strategy

Pillars 2 and 3.

Principal risk: 12

Liquidity and funding

Yearly change

Principal risk

The Group is reliant on committed debt facilities with four

lenders, all of which have speciﬁc obligations and covenants

that need to be met, and multiple banks for clearing

(transaction processing).

A loss of debt facilities and/or clearing facilities could result

in the Group being unable to meet its obligations as they

become due.

Residual risk rating and change in risk impact

Considered high residual risk and increasing.

The above is being maintained through open dialogue with

the banks.

Risk mitigation strategy

The Group ensures that it:

–

continues to review the Group’s capital structure to ensure we

have ﬁnancing in place to support investment in the business.

–

has sufﬁcient cash reserves to navigate through any short-term

reduction in available debt facilities.

–

ongoing monitoring of ﬁnancial position with banks and

open dialogue around the provisions (accurate forecasting

processes and early engagement with lenders around

covenant requirements).

–

Treasury team involved in advance of any major business

decisions that could impact banks providing clearing facilities.

–

ensure no trading entity is solely reliant on one bank for

clearing services.

Governance and oversight of risk

Board and Finance Committee.

Link to strategy

Pillars 1, 2, 3, 4 and 5.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Compliance statements

Assessment

In adopting the going concern basis

and viability statement for preparing the

ﬁnancial information, the Directors have

considered the circumstances impacting

the Group during the year as detailed in

the operating review on pages 12 to 23,

including the budget for 2023/24

(‘the base case’), the long range forecast

approved by the Board, and recent trading

performance. The Directors have reviewed

the Group’s projected compliance with its

banking covenants and access to funding

options for the 12 months ending

31 August 2024 for the going concern

period, the six months beyond the end

of the going concern period for cliff edge

events affecting the going concern period

such as the availability of revolving credit

facilities or repayments of any term loans,

and for the 3 years ending August 2026

for the viability assessment.

The Directors recognise that there is

continued uncertainty at this time caused

by the slower than anticipated return

of customers to UK land-based leisure

entertainment venues, the impact of

macroeconomic factors on consumer

sentiment and disposable incomes,

continued inﬂationary pressures and

higher interest rates and their overall

impact on consumer demand and

discretionary spending. The Directors

note that this has had an impact on the

accuracy of budgeting and forecasting

for the current ﬁnancial year, and this

has been considered by Management when

preparing their sensitivity review for the

going concern period.

The Directors have reviewed and

challenged management’s assumptions

for the Group’s base case view for the going

concern period. Key considerations are

the assumptions on the levels of customer

visits and their average spend in the

venues based businesses, and the number

of ﬁrst time and returning depositors in

the digital businesses, and the average

level of spend per visit for each. The key

base assumptions on costs are as follows:

–

Payroll costs are adjusted for increases

in the National Minimum Wage and pay

rise awarded in April 2024.

–

Rent due during the 23/24 ﬁnancial year

is paid on time.

–

All tax and duty are paid on time.

–

Capital expenditure is in line with

strategic plans.

–

Standard payment terms are assumed

for supplier payments.

The base case view contains certain

discretionary costs within management

control that could be reduced in the event

of a revenue downturn. These include

reductions to overheads, reduction to

marketing costs, reductions to the

venues’ operating costs and reductions

to capital expenditure.

–

Revolving credit facilities totalling £100m

are available to the Group through to

November 2024.

–

In November 2024, the facilities

available to the Group reduces to £75m,

maturing in February 2025. Based on

ongoing conversations with lenders and

the improving trading performance of

the Group, Management has a reasonable

expectation that there will be a successful

reﬁnancing of the facilities beyond

February 2025.

At the date of approval of the ﬁnancial

statements, £50m of the £100m RCF had

been drawn down in order to repay the

term loan.

In undertaking their assessment,

the Directors also reviewed compliance

with the banking covenants (‘Covenants’)

which are tested bi-annually at June and

December. The Group expects to meet the

Covenants throughout the going concern

period and as at December 2023 and

June 2024 and have the cash available

to meet its liabilities as they fall due.

Sensitivity analysis

The base case view reﬂects the Directors’

best estimate of the outcome for the going

concern period. A number of plausible but

severe downside risks, including

consideration of possible mitigating

actions, have been modelled with particular

focus on the potential impact to cash ﬂows,

cash headroom and covenant compliance

throughout the going concern period.

The three downside scenarios modelled are:

(i) revenues in the Grosvenor business

fall by 23% and the Group experiences

additional inﬂationary costs compared to

the base case view, with management taking

only mitigating actions that have no effect

on the Group’s trading performance

(ii) revenues in Grosvenor fall by 20%

and Rank Interactive by 7% versus the

base case view, with management taking

a number of mitigating actions including

reduction in capital expenditure, reduction

in marketing and other overheads and the

removal of the Group planning contingency.

(iii) a reverse stress test, revenues in

Grosvenor fall by 36% in the initial year,

with management taking actions as for

scenario (ii) but with further mitigating

actions on employment costs and

extending creditor days.

Having modelled the downside scenarios,

the indication is that the Group would

continue to meet its covenant requirements

in all scenarios and have available cash

to meet liabilities in all three scenarios;

refer to note 20 for covenants.

Accordingly, the Directors have a

reasonable expectation that the Group

has adequate resources to continue in

operational existence for a period at least

through to 31 August 2024.

For these reasons, the Directors continue

to adopt the going concern basis for the

preparation of these consolidated and

Company ﬁnancial statements, and in

preparing the consolidated and Company

ﬁnancial statements, they do not include

any adjustments that would be required

to be made if they were prepared on a

basis other than going concern.

Going concern statement

Based on the Group’s cash ﬂow forecasts

and business plan, the Directors believe

that the Group will generate sufﬁcient cash

to meet its liabilities as they fall due for the

period up to 31 August 2024. In making

such statement, the Directors highlight

forecasting accuracy in relation to the

level of trading performance achieved

as the key sensitivity in the approved

base case.

The Directors have considered three

downside scenarios which reﬂects a

reduced trading performance, inﬂationary

impacts on the cost base and various

management-controlled cost mitigations.

In each of the three downside scenarios,

the Group will generate sufﬁcient cash

to meet its liabilities as they fall due and

meet its covenant requirements for the

period to 31 August 2024 with scenarios

ii) and iii) requiring the implementation

and execution of mitigating cost actions

within the control of management.

Going concern and viability statement

The Rank Group Plc

Annual Report 2023

Viability statement

In accordance with provision 31 of the

2018 UK Corporate Governance Code,

the Directors conﬁrm that they have

considered the current position of the

Group and assessed its prospects and

longer-term viability over the three-year

period to August 2026. Although longer

periods are used when making signiﬁcant

strategic decisions, three years has been

used as it is considered the longest period

of time over which suitable certainty for

key assumptions in the current climate

can be made and is supported by the

Group’s business plan.

Having undertaken their assessment and

considered the overall circumstances of

the Group, the Directors conﬁrm that they

have a reasonable expectation that the

Group will be able to continue in operation

and meet its liabilities as they fall due over

the three-year period to August 2026.

In making this statement, the Directors

have performed a robust assessment of

the principal risks facing the Group which

includes an assessment of both ﬁnancial

and non-ﬁnancial risks that may threaten

the business model, future performance,

liquidity and solvency of the Group.

The key assumptions made are that:

–

The Group performs in line with the

base case for FY24 used for the going

concern assessment, and the strategic

plan approved by the Board;

–

The Group continues to have access

to its existing banking revolving credit

facilities (‘RCF’), having maturity dates

in November 2024 and February 2025,

and that the Group is able to arrange new

RCF with its banking group at a level

required as existing facilities mature.

The Directors have also considered the

potential outcome from the Government’s

review of the Gambling Act 2005, for

which the White Paper was published on

the 27 April 2023; based on the information

available and their understanding at the

date of this statement, the White Paper is

anticipated to have a net positive impact

on the Group.

Our approach to risk management and

details of the principal risks facing Rank,

together with the impact of each risk, the

direction of travel and the actions taken

to mitigate such risks are set out on

pages 80 to 87. The risks considered

include (without limitation): uncertain

trading environment and macroeconomic

conditions, changes to regulation

(including gambling laws and regulations),

people, safer gambling, health and safety,

tax, liquidity and funding, and technology

risks (including data and cybersecurity).

The Group’s business plan is reviewed at

least annually. It considers current trading

trends, the impact of capital projects,

existing debt facilities and compliance with

covenants and expected changes to the

regulatory and competitive environment,

as well as expectations for consumer

disposable income. In carrying out the

assessment the Directors have reviewed

and challenged key assumptions within

the Group’s business plan. Details of the

assumptions included in the assessment and

the sensitivity analysis applied to the base

case plan as set out opposite on page 88.

Non-financial information statement

We aim to comply with the Non-Financial Reporting Directive requirements from sections 414CA and 414CB of the UK Companies

Act 2006. The table below sets out where relevant information is located in this Annual Report.

Reporting requirement

Some of our relevant policies

Where to ﬁnd more in the Annual Report

Pages

Environmental matters

–

Environment and KPI

56 to 70

Employees

–

Health and safety policy

–

Whistleblowing policy

–

Code of conduct

–

Colleagues and KPI

–

Diversity & Inclusion

–

Equal opportunities

–

Customers

–

Stakeholder engagement

53 to 56, 46 to 49 and

102 to 103

Human Rights

–

Modern slavery statement

–

Human rights

Social Matters

–

Health and safety policy

–

Code of conduct

–

Whistleblowing policy

–

Customers and KPI

–

Colleagues and KPI

–

Communities and KPI

53 to 56, 71 and 46 to 49

Anti-corruption

and anti-bribery

–

Anti-corruption and bribery,

gifts and hospitality policy

–

Code of conduct

–

Whistleblowing policy

–

Anti-money laundering policy

–

Colleagues

–

Audit Committee

53 to 56 and 109 to 115

Business model

–

Our business model

Principal risks

and uncertainties

–

Description of risk processes,

risk management, risk

governance

80 to 87

Non-ﬁnancial key

performance indicators

–

Our key performance indicators

–

Our strategy

–

Our ESG strategy

–

Our external environment

52 to 71, 30 to 41 and

24 to 27

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

The Rank Group Plc

Annual Report 2023

Governance Report

In this section:

We provide an overview of our

corporate governance structure,

policies and practices.

We also look at the key activities

undertaken during the year by

our Board and its Committees

in ensuring effective leadership,

oversight and application of

best practice principles at Rank.

Chair’s introduction to governance

Governance at a glance

2018 Code Compliance Statement

How we are governed

Our Board

100 A year in review

102 Our culture and workforce engagement

103 Senior management

104 Nominations Committee Report

109 Audit Committee Report

117

ESG & Safer Gambling

Committee Report

121 Finance Committee Report

123 Remuneration Committee Report

126 Remuneration at a glance

128 Remuneration Policy

136 Annual Report on Remuneration

148 Directors’ Report

152 Directors’ Responsibilities

Strategic report

Governance report

Financial statements

Overview

The Rank Group Plc

Annual Report 2023

We were pleased to see key ESG

performance measures established during

the year, which will provide a clear view

for the Board as we make progress towards

our ESG aims. I am particularly pleased

with how the Board committees have

worked to create a strong understanding

of their ESG focus areas, working together

to build the strong threads that support

our ESG strategy.

Safer gambling remains our primary

ESG focus area, and in light of the UK

Government’s White Paper on gambling

legislative reforms, we continue to focus

strongly on promoting a safer gambling

culture and our robust response to the risk

of gambling-related harm. While we are

in business to provide an exciting and

entertaining experience to our customers,

it is vital they maintain trust in our brands

and feel safe at all times. We are fully

engaged with ongoing regulatory

developments, and in particular the

publication of the much-anticipated

White Paper on gambling legislative

reforms in the UK, and we will maintain

the pace of delivery as we contribute to the

consultation process as the policy moves

to its next phase. You can read more about

the implications for Rank in the Chief

Executive’s review of the reforms

on page 28 to 29.

The Board is steadfast

in its commitment

to strong corporate

governance. We

ﬁrmly believe that

cultivating effective

governance practices

leads to stronger

value creation and,

in parallel, reducing

risk for all our

stakeholders.

Alex Thursby

Chair

Dear shareholders

On behalf of the Board, I am pleased

to present this year’s Directors’ and

Corporate Governance Report. The Board

is steadfast in its commitment to strong

corporate governance. We ﬁrmly believe

that cultivating effective governance

practices leads to stronger value creation

in the long term and reduces risk for all

our stakeholders. The Board has

maintained its focus on high standards

throughout the year, ensuring that our

governance framework meets the needs of

the business and is appropriately aligned

with best practice, while remaining aware

of the macroeconomic conditions, both

in the UK and globally.

ESG and safer gambling

We have continued to make very good

progress in the year on our commitment

to environmental, social, and governance

(ESG) matters, and we have further

embedded the Group purpose and

strategic pillars that were refreshed

in the prior year. We remain committed

to ensuring that sustainability is clearly

identiﬁed and at the core of what we do.

You can ﬁnd more information in our

2023 Sustainability Report as we continue

to deliver against our ESG strategy.

The Board is convinced this will enable

us to create a more successful business.

“

Safer gambling remains

our primary ESG focus

area, and in light of the

UK Government’s White

Paper on gambling

legislative reforms, we

continue to focus strongly

on promoting a safer

gambling culture.”

The Rank Group Plc

Annual Report 2023

Chair’s introduction to governance

Developing our relationships

with stakeholders

Stakeholder engagement enables us to

better understand what matters most to

the people with an interest in our business,

consider all relevant factors and select the

best course of action for long-term business

success. Key matters of concern to

stakeholders during the year have included

building a stronger culture within Rank,

the Mecca estate rationalisation, and the

volatility of energy prices and wider cost

of living pressures. I remain conﬁdent in

the Board’s ability to effectively engage

with our key stakeholders and utilise that

engagement in its decision-making. Some

of the highlights of how the Board engaged

with key stakeholders during the year are:

–

Colleagues: visits to our venues and

ofﬁces to engage with colleagues

ﬁrst-hand in their place of work; good

relationships with the Chief Product

Ofﬁcer and Workforce Engagement

Director that are stimulating

discussions at Board level.

–

Regulators: corresponded and participated

in meetings with regulators speciﬁcally

focused toward Board Directors.

–

Shareholders: held 23 meetings

during the course of the year with

our shareholders.

More information about our stakeholder

engagement is set out on pages 45 to 49

of this report.

Culture

As part of our commitment to see the

strategic aims of the Group ﬂourish, I was

pleased to see the ‘baton’ pass seamlessly

to Lucinda Charles-Jones as the Board’s

designated Non-Executive Director for

workforce engagement. She made a strong

start in her collaboration with Rank’s Chief

People Ofﬁcer, which sets the pace we need

to strengthen our culture, a core enabler

to the long-term success of the Group.

More information on how the Board

monitors culture is set out on page 102.

Board changes

Steven Esom stepped down from the

Board and as Chair of the Remuneration

Committee on 31 December 2022, having

completed over six years’ service on the

Board. During his time with Rank, Steven

has been a valued contributor to Board

discussions, drawing on his wealth of

experience. During his time as Chair

of the Remuneration Committee, he was

instrumental in laying the foundations

for Rank’s future growth. Steven left with

the Board’s best wishes.

I was delighted to have Lucinda Charles-

Jones step into the role as Chair of the

Remuneration Committee, as well as

assuming Steven’s role as the designated

Non-Executive Director for workforce

engagement. Lucinda has brought a

wealth of her people, culture and reward

experience to the role.

Following Steven’s departure from

the Board, the Nominations Committee,

having considered the composition of

the Board and the desired skills to

complement the Board as a whole,

undertook a recruitment process for an

additional Independent Non-Executive

Director to join the Board. I am pleased

the process has resulted in the appointment

of Keith Laslop, who will join the Board on

1 September 2023. For more information

please see the Nominations Committee

report available on pages 104 to 105.

Board effectiveness and composition

In 2022, the Board undertook a two-

to-three-year commitment to review

its effectiveness by way of an external

facilitator, to check and assess whether

the Board was balanced in its composition,

focus and approach and aligned with the

Company’s overall strategic goals.

Lintstock Limited was engaged in 2022 to

run the longer two-to-three-year evaluation

process. The process commenced in 2022

with a questionnaire-led evaluation process

focused across all committees and the

Board. For 2023, the focus was primarily

on the Board while committee reviews

were a considered part of the process. The

focus on the Board allowed an opportunity

to review the effectiveness of the Board in

depth and has provided key insights for

the Directors to consider during the year

ahead. More details of the evaluation

process and outcomes can be found

on pages 106 to 107.

My focus will continue to be on

maintaining strong Board leadership

to drive further improvements where

possible and developing succession plans

to ensure that we are well-placed to

continue the business recovery plan.

The year ahead

The Board recognises the ongoing need

for good governance and I am conﬁdent

that our framework remains strong and

effective. However, as we continue to focus

on the strategic aims of the Group and look

to build the future assurance and success

of the business, resilience is key. I would

like to take this opportunity, on behalf of

the Board, to thank our senior leadership

team and our colleagues for their continued

drive and commitment, as well as my fellow

Directors for their valued contribution.

As we look ahead to the coming year,

the implications of the UK Government’s

White Paper for gambling reform will

drive changes for Rank and for the wider

industry, and we look forward to making

progress over the coming year as the

consultation process gains momentum.

We move forward with conﬁdence in our

strategic plans and in the knowledge that

the Company is led by a highly competent

and professional team. I welcome the

valuable support of our shareholders

and indeed all our stakeholders, as the

business continues its recovery journey

and takes advantage of the opportunities

that lie ahead. With that in mind, I look

forward to engaging with you further at

this year’s Annual General Meeting on

Thursday 19 October 2023.

Alex Thursby

Chair

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Board independence

Independent

Appointed

Chair

Alex Thursby

Yes

August 2017

Executive

John O’Reilly

May 2018

Richard Harris

May 2022

Non-Executive

Katie McAlister

Yes

April 2021

Chew Seong Aun

December 2020

Lucinda Charles-Jones

Yes

June 2022

Karen Whitworth

Yes

November 2019

Alex Thursby was originally appointed to the Board on 1 August 2017

and became Non-Executive Chair with effect from 17 October 2019.

0-3 years

3-6 years

6-9 years

Board tenure

Male

Female

Board gender

About the Board

Ethnic diversity

FCA ethnic diversity reporting as at 30 June 2023

Number of

board

% of

board

Number of

senior

positions

on the board

(CEO, SID,

CFO or Chair)

Number of

executive

management

% of

executive

management

White British or other white (including minority white groups)

Mixed/Multiple ethnic groups

Asian/Asian British

Black/African/Caribbean/Black British

Other ethnic group, including Arab

Not speciﬁed/prefer not to say

The Rank Group Plc

Annual Report 2023

Governance at a glance

Skills of the Non-Executive Directors

Katie McAlister

Karen Whitworth

Lucinda Charles-Jones

Alex Thursby

Chew Seong Aun

1. Customer Centric/hospitality

2. Environment, Sustainability and Governance

3. Financial (accounting and/or ﬁnance)

4. Gaming

5. Marketing

6. People

7. Real estate & property

8. Risk & Compliance

9. Strategy

10. Technology/digital

Committee membership

Audit Committee

Finance Committee

Nominations

Committee

Remuneration

Committee

ESG & Safer Gambling

Committee

Alex Thursby

John O’Reilly

Richard Harris

Katie McAlister

Chew Seong Aun

Lucinda Charles-Jones

Karen Whitworth

Committee member

Committee Chair

2018 Code Compliance Statement

The Board remains committed to maintaining the highest

standards of corporate governance across the Group, recognising

that a strong governance framework is vital to underpin our

strategic objectives. For the year under review, we have

consistently applied the principles of good governance contained

in the 2018 UK Corporate Governance Code (the ‘2018 Code’)

and are in full compliance with its provisions, save in respect

of Provision 38. As reported last year, while pension contribution

rates for newly appointed Executive Directors will be aligned with

the wider workforce on appointment, the pension contribution

rate for John O’Reilly was aligned with the rate available to the

majority of the wider workforce (currently 3%) from 1 January 2023.

Further information is available on page 137.

How we comply with the

UK Corporate Governance Code 2018

More information on pages

Board leadership and

Company purpose

Effective and entrepreneurial

Board that promotes long-term

sustainable success

42 to 45 and 100 to 101

Purpose, strategy,

values and culture

Inside cover to 9,

22 to 23, 30 to 41 and

52 to 71

Governance framework

and Board resources

96 to 97 and 105

Stakeholder engagement

45 to 49

Workforce policies and practices

55 to 56

Division of responsibilities

Board roles

94 and 98 to 99

Independence

External commitments and

conﬂicts of interests

97 and 98 to 99

Board efﬁciency and key activities

100 to 101 and

106 to 107

Composition, succession

and evaluation

Appointments to the Board

98 to 99

Board skills, experience

and knowledge

94, 98 to 99 and 105

Annual Board evaluation

106 to 107

Audit, risk and internal control

Financial reporting

113 to 114

External auditors and internal audit

112 to 113

Fair, balanced and understandable

– 2023 Annual Report review

113

Internal ﬁnancial controls

111 to 112

Risk management

Remuneration

Linking remuneration with

purpose and strategy (please see

comments above in regard to

pension contribution rates)

136 to 144 and

146 to 147

Remuneration policy

128 to 135

Performance outcomes

136 to 144

The 2018 Code can be found on the Financial Reporting

Council’s website www.frc.org.uk.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

The Rank Group Plc Board

The Board is ultimately responsible for the direction, management and performance of the Company.

It meets formally on a regular basis, with additional ad hoc meetings scheduled in line with business needs.

The Directors view their meetings as an important mechanism through which they discharge their duties,

particularly under s.172 of the Companies Act 2006 (see pages 42 to 44 for more information).

Board leadership, Company purpose and governance structure

Executive Committee

The Executive Committee manages the day-to-day operations of the Group’s business within levels of authority delegated by the

Board. It comprises the Chief Executive, Chief Financial Ofﬁcer, Managing Directors for each of Grosvenor Venues, Mecca Venues,

Rank Interactive and Rank International, Chief People Ofﬁcer, Chief Information Ofﬁcer, Chief Transformation Ofﬁcer,

Group Transformation & Strategy Director, Director of Investor Relations & Communications and the Chief Operating Ofﬁcer.

Two senior management committees, the Risk Committee and the Compliance Committee, report to the Audit Committee and

support it in ensuring that the appropriate internal controls for risk management are implemented and monitored. A further

committee, the ESG Steering Committee, comprising senior management from around the Group, reports to the ESG & Safer

Gambling Committee.

For more information about the Company’s approach to risk management, please see pages 80 to 81.

Board Committees

Nominations

Committee

Audit

Committee

Remuneration

Committee

ESG & Safer

Gambling

Committee

Finance

Committee

– Recommends

appointments

to the Board.

–

Oversees succession

planning for

Directors and

the process for

succession planning

for the senior

management team.

–

Ensures that there is

an appropriate mix of

skills and experience

on the Board.

–

Promotes diversity,

equality and

inclusion on the

Board and across

the Group.

–

Oversees the Group’s

ﬁnancial reporting

and monitors the

independence of

our internal and

external audit.

–

Responsible for

internal controls

and monitors risk

management

including the

identiﬁcation of

emerging risks.

–

Responsible for the

relationship with the

external auditor.

–

Responsible for

establishing a

Remuneration Policy

and setting the

remuneration for the

Chair of the Board,

Executive Directors

and senior

management.

– Oversees

remuneration policies

and practices across

the Group.

–

Responsible for the

alignment of reward,

incentives and culture,

and approves bonus

plans and long-term

incentive plans for

the Executive

Directors and senior

management.

–

Responsible for

assisting the Company

in the formulation

and monitoring of its

environmental, social

and governance

strategy.

–

Reﬂective of Rank’s

products and

services, has a

particular focus on

the Company’s safer

gambling strategy

and policy for the

prevention of

gambling-related

harm in each of the

jurisdictions and

channels in which

it operates.

–

Authorised by the

Board to approve

capital expenditure

and make ﬁnance

decisions for the

Group up to

authorised limits in

accordance with the

Group’s delegation

of authority.

–

Acts as the Board’s

disclosure committee

for the purposes of

the Market Abuse

Regulation.

Read more on

pages 104 to 108.

Read more on

pages 109 to 116.

Read more on

pages 123 to 147.

Read more on

pages 117 to 120.

Read more on

pages 121 to 122.

The Rank Group Plc

Annual Report 2023

How we are governed

Board purpose

The Board is responsible for the long-term

success of the Company and provides

leadership within a structure that ensures

effective controls are in place to assess

and manage risk. While the Board retains

ultimate responsibility for the exercise

of its powers and authorities, there is a

formal framework of Committees of the

Board to support it in discharging its

duties, as set out on page 96. Each

Committee operates under terms of

reference approved by the Board, which

are reviewed annually and can be found

on the Company’s corporate website,

www.rank.com.

Division of responsibilities

Chair and Chief Executive

Rank has established a clear division

between the respective responsibilities

of the Non-Executive Chair and the

Chief Executive.

The Chair

–

Responsible for the leadership and

effectiveness of the Board, including

setting its agenda, overseeing corporate

governance matters and undertaking

the evaluation of the Board, its

Committees and Directors.

–

Ensures that the Board as a whole

plays a full and constructive part in

the development and determination

of Rank’s strategy.

–

Oversees effective engagement with

the Company’s various stakeholders.

–

Ensures a culture of openness and

debate around the Board table.

–

Sets and manages the Board’s agenda

in consultation with Executive Directors

and the Company Secretary.

–

Ensures that Directors receive accurate,

timely and clear information and that they

are fully informed of relevant matters, to

promote effective and constructive debate

and support sound decision-making.

–

Ensures that adequate time is available

for discussion of the principal risks,

important matters and key decisions

affecting the Company.

The Chief Executive

–

Responsible for the day-to-day

operations of the business, while being

accountable to the Board for all aspects

of the performance and management

of the Group. This includes developing

business strategies for Board approval

and implementing them in a timely and

effective manner while managing risk.

–

Ensures effective communication with

all stakeholders.

–

Manages the Executive Committee

and is responsible for leading and

motivating a large workforce of people.

–

Promotes the strategy, values, ambition

and purpose of Rank and conducts

the Company’s affairs to the highest

standards of integrity, probity and

corporate governance.

–

Takes responsibility for Group health

and safety policies.

–

Responsible for the ESG strategy and

embedding a safer gambling culture

across the Group.

Non-Executive Directors and

Senior Independent Director

The Non-Executive Directors support

the Chair and provide objective and

constructive challenge to management.

Among their other duties, they are required

to oversee the delivery of the strategy

within the risk appetite set by the Board,

scrutinise the performance of management

in meeting agreed goals and objectives,

monitor the reporting of performance

and ensure compliance with regulatory

requirements. The Non-Executive Directors

participate in meetings held by the Chair

without the Executive Directors present.

The Senior Independent Director provides

a sounding board for the Chair and serves

as an intermediary for the Chief Executive

and other Directors when necessary.

She leads the process of evaluating the

Chair’s performance and is available to

shareholders if they have any concerns

that they have been unable to resolve

through the normal channels.

Company Secretary

The Company Secretary makes sure that

appropriate and timely information is

provided to the Board and its Committees

and is responsible for advising and

supporting the Chair and the Board on

all governance matters. All Directors have

access to the Company Secretary and may

take independent professional advice at

the Company’s expense in furtherance

of their duties.

Conflicts of interest

The Group believes it has effective

procedures in place to monitor and deal

with any potential conﬂicts of interest and

ensure that any related-party transactions

involving Directors, or their connected

parties, are conducted on an arm’s

length basis.

Directors are required to disclose any

conﬂicts of interest immediately as and

when they arise throughout the year. In

addition, we undertake a formal process

each year when all Directors conﬁrm to the

Board details of any other directorships

that they hold. These are assessed by the

Nominations Committee, and then the

Board. No Director is counted as part of

the quorum in respect of the authorisation

of his or her own conﬂict.

Board re-election

In accordance with the Company’s

articles of association and the 2018 Code,

all continuing Directors will stand for

re-election at the 2023 Annual General

Meeting.

Insurance cover

The Company has arranged insurance

cover and indemniﬁes Directors in respect

of legal action against them to the extent

permitted by law. Neither the insurance

nor the indemnity applies in situations

where a Director has acted fraudulently

or dishonestly.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Key strengths

– Broad ﬁnancial and international

experience, having worked in

and across multiple markets and

product groups in the banking

sector for many years.

– Extensive leadership experience,

with a strong understanding of

governance and investor relations.

Previous experience

Alex was a non-executive director at

Barclays Bank Plc from 2018 to 2019.

He was chief executive ofﬁcer at

National Bank of Dhabi from 2013

to 2016 and a non-executive director

at AMMB Holdings Berhad, a Bursa

Malaysia listed company and part

of the AM Bank Group, from 2008

to 2012. Alex was a member of the

executive committee at Australia and

New Zealand Banking Group (ANZ)

for ﬁve years, including CEO of the

International and Institutional

Banking Division (Corporate and

Investment bank). Prior to this, he

was with Standard Chartered Bank

for 21 years, where his roles included

global head of the wholesale

banking, client relations and

head of Northeast Asia.

Key external appointments

and commitments

Alex is chair of the Board of

Governors at Giggleswick School.

Committee membership

Finance Committee (Chair)

Nominations Committee (Chair)

ESG & Safer Gambling Committee

Alex was originally appointed to

the Board on 1 August 2017 and

became the Non-Executive Chair

with effect from 17 October 2019.

Key strengths

– Signiﬁcant and extensive

experience of the betting and

gaming industry.

– Proven business leadership with

a breadth of strategic, commercial

and operational experience. Strong

shareholder understanding.

Previous experience

John was a non-executive director

at William Hill Plc from 2017 to 2018,

non-executive director and chair

at Grand Parade 2015 to 2016 and

a non-executive director and chair

of the remuneration committee at

Telecity Group Plc from 2007 to 2016.

He was a senior executive at Gala

Coral Group from 2011 to 2015 and

prior to this, at Ladbrokes, where

he held several senior positions,

including managing director of

remote betting and gaming, and

subsequently, executive director

from 2006 to 2010.

Key external appointments

and commitments

John is a non-executive director and

chair of the audit and risk committee

at Weatherbys Limited and a trustee

of the New Bridge Foundation, the

prisoner befriending charity.

Committee membership

Finance Committee

ESG & Safer Gambling Committee

Key strengths

– Has held CFO and senior ﬁnance

roles in a number of consumer-

facing organisations, developing

a strong understanding of

corporate ﬁnance, commercial

ﬁnance, investor relations and

ﬁnancial reporting.

– Extensive operational experience,

particularly in acquisitions, disposals

and business improvement.

Previous experience

Richard’s previous roles include

Chief Financial Ofﬁcer at Foxtons

Group Plc from 2019 to 2022, Group

Financial Controller at Laird Plc

from 2016 to 2019, and over 11 years

at Marks and Spencer plc where he

held a number of senior ﬁnancial

roles. He is a CIMA qualiﬁed

management accountant.

Key external appointments

and commitments

None.

Committee membership

Finance Committee

Key strengths

– Signiﬁcant strategic, ﬁnancial

and leadership experience gained

through a number of senior

commercial, operational and

governance roles.

– Extensive knowledge of consumer-

facing, multi-site retail, and

multi-channel businesses.

Previous experience

Karen has over 20 years of board

level experience in public and

private organisations. She was

previously a non-executive director

and chair of the audit committee

at Pets at Home Plc and was a

supervisory board member and

member of the audit committee at

GS1 UK Limited from 2015 to 2018.

Karen spent over 10 years at

J Sainsburys plc, latterly as director of

non-food grocery and new business.

Prior to joining J Sainsburys, she was

ﬁnance director at online

entertainment business BGS Holdings

Limited and held a number of senior

global roles at Intercontinental

Hotels Group plc. Her early career

was spent at Coopers & Lybrand

(now PwC), where she qualiﬁed

as a chartered accountant.

Key external appointments

and commitments

Karen is senior independent director

at Tritax Big Box REIT plc and

non-executive director at Tesco Plc,

as well as an advisor to Grow up

Farms Limited.

Committee membership

Audit Committee (Chair)

Remuneration Committee

Nominations Committee

ESG & Safer Gambling Committee

Executive Directors

Chair

Non-Executive Directors

Alex Thursby

Non-Executive Chair

Board independence:

Independent on appointment

Ethnicity/Nationality:

White/Australian

Gender:

Male

Appointed:

August 2017¹

Age:

John O’Reilly

Chief Executive

Board independence:

Non-independent

Ethnicity/Nationality:

White/British

Gender:

Male

Appointed:

May 2018

Age:

Richard Harris

Chief Financial Ofﬁcer

Board independence:

Non-independent

Ethnicity/Nationality:

White/British

Gender:

Male

Appointed:

May 2022

Age:

Karen Whitworth

Senior Independent Director

Board independence:

Independent

Ethnicity/Nationality:

White/British

Gender:

Female

Appointed:

November 2019

Age:

The Rank Group Plc

Annual Report 2023

Our Board

Non-Executive Directors

continued

Key strengths

– Extensive remuneration and

people experience, both UK

and internationally.

– Experience in strategic

development of social and

environmental aspects of

corporate responsibility.

Previous experience

Lucinda has more than 25 years’

executive-level experience in human

resources roles. She was Chief

People & Corporate Responsibility

of AXA UK and Ireland, part of the

AXA SA Group, from 2015 to 2022

and group HR director for Towergate

partnership Co Ltd from 2011 to

2014. Prior to this, Lucinda was

group global HR director for Hays Plc

and has also previously held human

resources roles at RAC PLC,

consumer division and Vivendi SA.

Key external appointments

and commitments

Lucinda is a non-executive director

on the board of Trustees for Business

in the Community where she also

chairs the remuneration committee

and sits on the nomination committee.

Committee membership

Remuneration Committee (Chair)

ESG & Safer Gambling Committee

Audit Committee

Nominations Committee

Lucinda is also the Designated

Non-Executive Director for

workforce engagement.

Key strengths

– A breadth of strategic and

operational knowledge having

worked across a number of

companies in the Hong Leong Group.

– Extensive experience in ﬁnance

and banking.

Previous experience

Seong Aun has over 30 years’

experience in ﬁnance and banking

and has been with the Hong Leong

Group for more than 15 years. He was

the chief ﬁnancial ofﬁcer of Hong

Leong Financial Group Berhad, an

associated company of Guoco Group

Limited listed in Malaysia from 2006

to 2020. In his earlier career, Seong

Aun held various senior banking

positions in the Middle East and

Asia. He is an ICEAW qualiﬁed

chartered accountant (FCA) and

member of the Asian Institute

of Chartered Bankers Malaysia.

Key external appointments

and commitments

Seong Aun is the executive director

and the group chief ﬁnancial ofﬁcer

of Guoco Group Limited. He is also

a non-executive director of Lam Soon

(Hong Kong) Limited. Both companies

are listed in Hong Kong and are

members of the Hong Leong Group.

Committee membership

None

Key strengths

– Extensive digital and marketing

experience, both UK and

internationally.

– Responsible for several digital

transformation and business

change programmes and a strong

interest in environmental, social

and governance (ESG) initiatives.

Previous experience

Katie joined TUI in 1998 in the

commercial area of TUI UK and

Ireland with roles in trading,

product, and destination services.

She was chief marketing ofﬁcer for

TUI Northern Region (UK, Ireland

and Nordic) until her more recent

move to Cunard, belonging to the

Carnival Plc group.

Key external appointments

and commitments

Katie is President of Cunard, part

of the Carnival plc group.

Committee membership

ESG & Safer Gambling Committee

(Chair)

Audit Committee

Remuneration Committee

Asha Magnus

Company Secretary

Appointed:

October 2022

Experience

Asha joined Rank in 2018 as

assistant company secretary and

promoted to the role of Company

Secretary in October 2022. She has

15 years of company secretarial

experience and most recently held

positions at GlaxoSmithkline,

Unipart and Hanson.

Company Secretary

Lucinda Charles-Jones

Non-Executive Director

Board independence:

Independent

Ethnicity/Nationality:

White/British

Gender:

Female

Appointed:

June 2022

Age:

Chew Seong Aun

Non-Executive Director

Board independence:

Non-independent

Ethnicity/Nationality:

Asian/Malaysian

Gender:

Male

Appointed:

December 2020

Age:

Katie McAlister

Non-Executive Director

Board independence:

Independent

Ethnicity/Nationality:

White/British

Gender:

Female

Appointed:

April 2021

Age:

Board meeting

attendance

Director

Lucinda Charles-Jones

8/8

Chew Seong Aun

8/8

Steven Esom

4/4

Richard Harris

8/8

Katie McAlister

8/8

John O’Reilly

8/8

Alex Thursby (Chair)

8/8

Karen Whitworth

8/8

Lucinda Charles-Jones was

appointed as Remuneration

Committee chair on 1 January 2023.

Steven Esom resigned from the

Board on 31 December 2022.

In addition to the scheduled meetings,

the Board held a further three

meetings during the year to discuss

performance. They also considered a

number of key arising matters outside

of these meetings as these arose.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

Strategy day

The Board met for its annual strategy

review in March 2023. This year, Board

members took the opportunity to meet in

Barcelona, allowing them to spend some

time with colleagues and visit the Enracha

venues. The meeting focused on how the

business is evolving against our strategic

pillars, refreshed in the prior year;

Although the Board’s priority was to

ensure the strategy remained clear and

customer driven, the meeting also provided

an opportunity to enable management to

think radically and take advantage of new

market opportunities.

The Board discussed our intention

to invest for growth now, improving

Grosvenor proﬁtability, rationalising the

Mecca estate and improving the customer

proposition in Digital, for example by

implementing our NextGen RIDE platform.

Our aim is to lay the foundation for

international expansion and improve

talent and capability in critical areas.

Over a three-year timescale our strategic

intent is to balance our investment and

returns by testing international expansion

concepts, driving a greater percentage

of revenue through Digital channels, and

successfully implementing the measures

coming out of the Gambling Act Review.

Over a ﬁve-year timescale, we are looking

to drive a greater percentage of revenue

through our international operations and

progressively build shareholder returns.

An important aspect of our governance

is supporting and developing our

business strategy, ensuring we have

the right people and leadership to

deliver that strategy, while

maintaining the highest standards

of safety and transparency in a highly

regulated environment.

Time on Board activities

Business Reviews

23%

Financial

30%

Strategy

24%

Governance & Investor Relations

12%

Regulatory & Risk

11%

The Rank Group Plc

Annual Report 2023

100

A year in review

Overall, the Board was pleased with the

actions agreed at the strategy day and with

the detail of the roadmap of KPIs provided

and was conﬁdent that they presented a

clearer view and focus for the longer term,

while also facilitating value creation

opportunities. At subsequent meetings,

the Board discussed the cultural

complexities across the regions in which

Rank operates and the need to set a clear

and overarching people strategy to enable

us to retain key talent within the Group

and which is now ﬁrmly in place.

Investing for growth,

efficiency and lower risk

Technology and data, alongside people,

are key enablers for our growth ambitions.

We are investing in our technology and

innovations to enable us to interact with

more customers cross-channel, and

further grow the unique consumer

proposition we offer both at our venues

and digitally. During the year, the Board

has discussed how we are harnessing the

new RIDE platform through the Central

Engagement Platform and the NextGen

cloud-based solutions to accelerate the

advancement of our technology.

NextGen technology will enable greater

platform scalability and unlock our ability

to deliver internationally, deploying

developments at a faster pace while

ensuring we can meet the key requirements

from the Gambling Act Review as efﬁciently

as possible. During the year, the Board

also received detailed business updates

from each of our business areas, reporting

on performance and key developments

in respect of their technological based

initiatives. In particular, the Board has

challenged management on the potential

for process improvements and more

automation, and how investment can

help our people achieve this.

The Board also considered an investment

proposal during the year that would bring

in-house the development of the Group’s

mobile applications, a key opportunity that

will provide improvements to our customer’s

gaming experience. The Board welcomed

the mobile apps initiative and will be kept

informed of its progress during 2023/24.

Managing our costs

and liquidity

A signiﬁcant amount of the Board’s time in

the year was spent assessing performance,

costs and related matters. Regular

discussions were held during the year on

our progress in each part of the business,

including additional meetings that were

held throughout December before our

trading update. The Board considered the

terms of our Revolving Credit Facility and

Term Loan maturity and were regularly

kept informed of progression made during

the year with the Group’s banking partners

as management sought to reﬁnance the

maturing Term Loan and Revolving Credit

Facility and which was concluded in

August 2023.

During a deep-dive discussion on Mecca,

the Board considered key investment

initiatives that would help re-energise the

business and look to extending the Mecca

proposition to a younger generation of

potential customers. We also discussed

the size and sustainability of the Group’s

estate, with a particular focus on Mecca,

where 15 venues closed in the year

(approved during the year or in the prior

year). Such discussions focused on key

opportunities to partner with other leisure

operators, how developments in new

technology will drive efﬁciencies across

the business, as will improving lease terms

as they fall due. The Board recognised that

there have been and will be some difﬁcult

decisions but are committed to ensuring

all stakeholder concerns are considered

carefully in these decisions.

Regulatory development

During the year, the Board considered the

much anticipated White Paper on gambling

legislation reforms and the impact for the

Group. The White Paper delivered

outcomes that overall were positive for

Rank and the Board noted that Grosvenor

casinos were likely to be a clear beneﬁciary,

with an upside for Mecca that would help

mitigate any impact from staking limits

and a statutory levy in Rank interactive.

For more information on the implications

of the White Paper, please read our Chief

Executive’s review on page 14.

The Board discussed the process of

implementation and consultations that

have and will continue to follow on from

the White Paper publication. It also looked

at the readiness of the business over the

next one to two years to leverage any

beneﬁts when all measures are in place,

such as the supply of suitable electronic

machines, and ensuring we have a supply

chain ready to support them.

The Board also considered the impact from

changes to sports betting regulation and

how we can get the model right for Rank.

A signiﬁcant amount of preparatory work

has already been done and the Board is

conﬁdent that we are well set up to

implement the outcomes of the White

Paper in the months ahead.

“

Developments in

new technology will

be key enablers in

reducing costs across

the business.”

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

101

Adapting Rank’s culture

as a key enabler…

Our colleagues sit ﬁrmly at the heart of

the Company’s strategy as a key enabler

for the long-term sustainable success of

the Group (for more information on Rank’s

strategy see pages 30 to 41). The Board

receives regular updates from the Chief

People Ofﬁcer, as well as updates from

the designated Non-Executive Director

for Workforce Engagement. Through

these updates, the Board is able to keep

informed of prevailing trends, and in

particular the cultural sentiments through

the designated Non-Executive Director’s

workforce updates, enabling them to draw

on a holistic view of what it’s like to work

at Rank. See more about colleague

engagement on page 46.

During the year, the Board approved

the 2023/24 People & Culture Plan (‘Plan’)

which includes the transformation roadmap.

The Plan also includes our continued

commitment to Equality, Diversity

and Inclusion and our Colleagues

& Community agenda. A refreshed HR

dashboard will keep the Board informed

of the People & Culture progress against

the approved actions.

The People & Culture team, through the

Plan, has a clear purpose to help colleagues

Work, Win and Grow at Rank. Over the

next three to ﬁve years this purpose will

help the team deliver the Plan, focusing on

ﬁve key areas: 1) roll out of employer value

proposition and become an employer of

choice; 2) address our reward philosophy

and strategy; 3) embed a communications

and engagement strategy; 4) focus on

management development and succession;

and 5) deliver business unit people

transformation plans. In support of our

strategic KPIs, the Plan underpins how

the team will ensure a clear view on what

success looks like – one where we are able

to attract and retain the best talent from

around the world; we can develop and

grow our colleagues from within; we

continually engage, give and receive

feedback; we are able to foster a uniﬁed

culture of inclusivity and as a responsible

business, encourage diversity of thought

and promote good health and wellbeing

for all; and we create environments which

enable all colleagues to do great work for

our customers. With a strong relationship

between the Chief People Ofﬁcer and the

designated Non-Executive Director for

Workforce Engagement, together with her

role as Remuneration Committee Chair,

the Board welcomes the progress made

in the year which will deliver a clear line

of sight that will enhance the People &

Culture Plan over the medium term as part

of building success towards achieving in

the longer-term vision.

Enhancing communication

to the Board…

With a change to the designated

Non-Executive Director for Workforce

Engagement during the year, Lucinda

Charles-Jones has been very effective in

the role, engaging with colleagues across

the Group. She undertook a programme to

meet and engage with colleagues, starting

in March when she met with Spanish

colleagues in Barcelona, taking questions

and listening to their thoughts and

feedback. In June she led a question-and-

answer session via the Group’s podcast

interviews (see below for more information

on the launch of the podcast initiative and

highlights below from her interview) and

met with Mecca colleagues (virtually and

at the Luton club), with several further

engagement sessions planned for the year

ahead. The programme of engagement

throughout 2023/24 will continue to provide

valuable opportunities for direct engagement

between the Board and our colleagues

without senior management present.

Our listening strategy in

action: podcast interview

Our designated Non-Executive Director for

workforce engagement was invited to Rank’s

internal podcast programme, available to

all employees, where Lucinda answered

questions from our colleagues.

Q. Can you give us some insight

into what the Board does?

The role of the Board is quite different to

the roles of Executive Committee or Rank’s

management teams. The non-executive

directors don’t run the business, we

ensure the business is well run. We have

lots of responsibilities, but our primary one

is to promote the long-term sustainable

success of Rank for shareholders and

stakeholders. We are there to offer

constructive challenge, strategic guidance

and specialist advice where needed, and

we hold management to account.

Non-Execs are often described as the

critical friend to management, and it

is a privilege to be part of an exciting

customer-focused business.

Q. You mentioned that you are Chair

of the Remuneration Committee

(RemCom)– what is the role of

that Committee?

The Board delegates a number of its

responsibilities to a series of committees,

for example there’s one on ﬁnance and

one on safer gambling and broader

environmental, social and governance

topics. One of the committees is the

RemCom which I am Chair of.

The main role of the RemCom is to set

the remuneration policy for Rank senior

executives to meet two main objectives.

First, to make sure management interests

are aligned to that of shareholders and

stakeholders and that we’re driving the

right business outcomes in our reward

strategies, and secondly that we’re also

fairly rewarding individuals for their

contribution and retaining and motivating

those senior managers through reward.

We determine the salaries and

compensation for Rank’s most senior

directors, making sure they are competitive,

fair, and appropriate, and they are

benchmarked externally.

We also have oversight of the

remuneration across Rank so that the pay

and compensation for senior management

is aligned to the broader workforce and

our culture.

Q. You are also the Non-Executive

Director for Workforce Engagement.

How would you describe that role

and why is it important to you ?

I am thrilled to be leading this area

for the Board as part of ensuring there

is effective engagement with shareholders

and stakeholders. Given the people-centric

nature of our business, colleagues are at

the heart of all we do. It’s important that

The Rank Group Plc

Annual Report 2023

102

Our culture and

workforce engagement

John O’Reilly

Chief Executive

John joined Rank

in May 2018.

Jonathan Plumb

Chief Information

Ofﬁcer

Jonathan joined Rank

in October 2018.

Enric Monton

Rank International

Managing Director

Enric joined Rank

in May 2022.

Richard Harris

Chief Financial

Ofﬁcer

Richard joined Rank

in May 2022.

Sarah Powell

Director Of Investor

Relations and ESG

Sarah joined Rank

in January 2009.

Jim Marsh

Chief

Transformation

Ofﬁcer

Jim joined Rank

in October 2018.

Jon Martin

Chief Operating

Ofﬁcer

Jon joined Rank

in January 2019.

Andy Crump

Mecca Venues

Managing Director

Andy joined Rank

in May 2022.

Emma Morning

Group

Transformation &

Strategy Director

Emma joined Rank

in October 2019.

Hazel Boyle

Chief People Ofﬁcer

Hazel joined Rank

in September 2022.

Mark Harper

Grosvenor Venues

Managing Director

Mark joined Rank

in August 2023.

the Board understands colleagues’ views

and we get this insight in various ways

including the results of employee opinion

surveys and other management led

employee sessions. One additional way

we want to hear colleagues’ views is for

me, as NED for Workforce Engagement,

to run a series of conﬁdential and

anonymous listening sessions with

colleagues to understand what it’s like

to work at Rank as part of the Board

considering colleague feedback in our

discussions and decision-making.

Q. What is the purpose of the

Workforce Engagement sessions?

How will they run ?

The purpose of the Workforce

Engagement sessions is to give our

colleagues from across the Group a chance

to talk to a Board member ﬁrst hand and

for us (the Board) to hear how colleagues

feel about working at Rank (what do they

like or what could we do better) in a

conﬁdential, anonymous, and informal

way. It’s also a chance to talk about the

work of the Board and the RemCom and

to give colleagues at a chance to ask me

questions directly. They are not action

planning sessions – action planning

is done in the business by local line

managers and leaders – they are listening

sessions and I am excited to hear what

colleagues think.

I have a schedule of sessions planned

over the year – some in person and some

virtually – and for each session there will

be around 15-20 people with a broad range

of representation from each area of the

business to ensure we get diverse views.

I have already held a successful face-to-face

session in Barcelona for our International

teams and two sessions for Mecca, one

virtual and one face-to-face at Mecca Luton.

I will report back to the Board twice a year

to highlight key themes from the sessions,

but this will be done at a thematic level so

colleagues know they are able to come and

express their views openly without the

presence of senior management in the room.

These sessions are another layer of input

from colleagues that will help the Board

in our discussions and decision-making.

I am delighted to have this role and

honoured to have the chance and remit to

get out and about in the business to meet

the great people who work hard to excite

and to entertain our customers every day.

The Rank Group Plc

Annual Report 2023

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Financial statements

Overview

103

Senior management

“

We have made good progress

during the year with new leadership

colleagues embedding quickly into the

organisation. The Committee continues

to focus on succession planning and

development with a particular emphasis

on senior management, performance

and our equality, diversity and

inclusion strategy.”

Alex Thursby

Chair of the Nominations Committee

Role and responsibilities

The Committee leads the process for

appointments, ensures plans are in place

for orderly succession to the Board, the

Executive Committee and other senior

management positions, and oversees

the development of a diverse pipeline for

succession. Its key responsibilities are to:

–

Lead a rigorous and transparent

procedure for Board appointments.

–

Regularly review and refresh the Board’s

composition, taking into account the

length of service of the Board as a whole,

to ensure it remains effective and is

able to operate in the best interests

of shareholders.

–

Ensure plans are in place for orderly

succession to positions on the Board

and Executive Committee and oversee

succession planning for other

senior management.

–

Oversee the development of a diverse

pipeline for succession.

–

Work and liaise with other Board

Committees as appropriate, including

with the Remuneration Committee with

respect to any remuneration package

to be offered to new appointees to

the Board.

The formal terms of reference of the Committee

are available at www.rank.com or by written request

to the Company Secretary, who acts as secretary to

the Committee.

Key activities during

the year

–

Appointed Lucinda Charles-Jones as the

Chair to the Remuneration Committee

and as the designated Non-Executive

Director for workforce engagement.

–

Commenced a search for an additional

independent Non-Executive Director.

–

Continued to monitor diversity

initiatives under the Inclusion and

Diversity Strategy.

–

Reviewed succession plans for the Chair

and Chief Executive.

–

Reviewed talent and succession plans

for senior management.

Committee membership and attendance

Appointed to Committee

Attendance

Current members

Alex Thursby (Chair)

August 2017

4/4

Lucinda Charles-Jones

June 2022

4/4

Karen Whitworth

June 2022

4/4

Other members during the year

Steven Esom

July 2015

2/2

Alex Thursby took over as Chair in October 2019.

Steven Esom stepped down from the Committee in December 2022 following his resignation from the Board.

Meeting and attendees

All Committee members attended four scheduled meetings during the year

and considered the appointment of an additional Non-Executive Director outside

of the scheduled meetings.

The Company Secretary, the Chief People Ofﬁcer and the Chief Executive

also attend meetings, except when matters that relate to them are discussed.

The Rank Group Plc

Annual Report 2023

104

Nominations Committee Report

Dear shareholders

I am pleased to present the Nominations

Committee Report covering the work of the

Committee during the 2022/23 ﬁnancial

year. It was a busy year, with a number

of changes to the Board, its Committees

and to the Executive Committee. We have

made good progress this year as new

members embedded themselves quickly

with strong contributions from the outset.

We have continued to focus on the

important areas of succession planning

with a particular focus on senior

management and our inclusion and

diversity strategy. Following Steven Esom’s

resignation from the Board in December,

the Committee focused on a detailed

evaluation of the Board’s composition,

skills and experience, and I was delighted

to appoint Lucinda Charles-Jones as

Chair of the Remuneration Committee

on 1 January 2023, having joined the

Board in June 2022. She has brought

strong senior people, culture and reward

experience to both the Board and as a

member of the remuneration committee.

Board changes

Non-Executive Director appointment

Following Steven’s departure and as part

of a review of the Board’s composition

and skills, the recruitment process for

an additional independent Non-Executive

Director of the Board was commenced.

The search process has been led by the

Chair, assisted by the Chief People Ofﬁcer

and an external agency, Spencer Stuart.

I am pleased to report this process has led

to the appointment of Keith Laslop, who

joins us on 1st September 2023. Keith

brings with him extensive ﬁnancial and

digital gaming experience and as a result

will further enhance the effectiveness and

skillset of our Board.

Neither of the search agencies used

in connection with this appointment and

the appointment of Chief People Ofﬁcer

(discussed below) has any other connection

with the Company or any of its Directors.

All new Board members receive an

induction following their appointment,

which is led by the Company Secretary and

comprises both a general and personalised

programme. The general induction

includes their duties and responsibilities

as a director of a listed company, while the

personalised induction is devised and

tailored to each new director’s

background, experience and role.

Executive Committee changes

Changes to the Executive Committee

during the year saw the departure of

David Balls, the Group’s Human Resources

Director. A renewed focus on talent

development, culture and people

transformation was agreed with the Board

and we created a new Chief People Ofﬁcer

role. A formal search was commenced for

this role with Hazel Boyle joining the

Executive Committee in early September

2022. We created a new Chief Operating

Ofﬁcer Role with a broader Group focus

and we are delighted to have Jon Martin

(previously Managing Director of Rank

Interactive) transition into the Chief

Operating Ofﬁcer role on 1 July 2023.

Other changes in the year saw Eitan Boyd,

the Chief Innovation Ofﬁcer and Luisa

Wright, General Counsel & Company

Secretary leaving the Group. The role of

Chief Innovation Ofﬁcer was not replaced

and the role of General Counsel & Company

Secretary was divided into two roles.

More information about Hazel and Jon

can be found on the corporate website,

www.rank.com.

Composition

In line with the requirements of the

2018 UK Corporate Governance Code

and in light of director changes, we spent

considerable time this year looking at the

Board’s composition and skills matrix.

Whilst the Committee considered that

the Board had the necessary mix of skills,

knowledge and experience to fulﬁl its role

effectively, there was a desire to further

enhance the Board’s overall breadth,

knowledge and experience and to support

its continued succession planning on an

ongoing basis. To his end, the search for

an additional independent Non-Executive

Director began in the year, with a focus

on gaming and ﬁnancial skills and I look

forward to concluding this process during

the year.

We also reviewed the composition and

chair-ship of the Board’s Committees

during the year. Following Steven Esom’s

resignation from the Board in December

2022, Lucinda Charles-Jones was

appointed as the Remuneration Committee

Chair and as the designated Non-Executive

Director for workforce engagement,

bringing her wealth of experience in the

area of remuneration and people and

culture to both roles.

During the year, the Committee considered

the other signiﬁcant commitments of our

Non-Executive Directors and was satisﬁed

that each Director has sufﬁcient time to

discharge their responsibilities effectively.

Outside of the Board, we considered the

composition of the Executive Committee

during the year. I can conﬁrm that the

Committee is satisﬁed that the Board, its

Committees and the Executive Committee

are appropriately composed.

Learning, education and

continuous development

We regularly consider training

requirements for the Board with a view

to enhancing knowledge and skillsets

and to ensure appropriate account is taken

of changing business circumstances.

Directors are invited to identify to the

Company Secretary any additional

information, skills and knowledge

enhancements that they require.

Succession planning

Succession plans are maintained for the

Board, Executive Committee and other

senior leadership positions. These plans

were reviewed by the Committee and the

Board during the year. Speciﬁc matters

included succession planning for the

General Counsel & Company Secretary

and ﬁnalising the process commenced in

May 2022 for the new Chief People Ofﬁcer.

The search for the

Chief People Officer

was initiated in

2022, led by the

Chief Executive.

The search focused

on candidates with

particular strengths

in talent

management and

development, as we

aimed to further

enhance the broader

skills of the Executive

Committee.

The Rank Group Plc

Annual Report 2023

Strategic report

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Financial statements

Overview

105

The Committee also conducted its annual

review of succession planning for the

Chair and the Chief Executive and this

was refreshed in early January 2023.

Having considered the skills and depth of

experience desired in respect of talent and

development, the succession process for

the Chief People Ofﬁcer was an example

of succession planning in action, turning

into a recruitment process. We would like

to take this opportunity to thank Ian

Marchant for stepping up in the interim

prior to Hazel Boyle’s appointment as

Chief People Ofﬁcer.

The Committee welcomed further notable

examples of succession planning and

diversity in action in the promotion of

senior management, demonstrated by the

appointment of Becky Howells as General

Counsel and Asha Magnus as the

Company Secretary.

Non-Executive Directors’ evaluation

During the year, I held one-to-one

meetings with all Non-Executive Directors

to discuss their performance, drawing

on the results of the external evaluation

exercise and to identify whether they

continue to contribute effectively to the

Board and demonstrate commitment to

their role. I also met with and evaluated the

performance of the Chief Executive using

feedback from the exercise. To evaluate

my performance as Chair of the Board and

of this Committee, the Senior Independent

Director drew on this external evaluation

exercise as well as feedback from

separate discussions she held with the

Non-Executive Directors, Executive

Directors and the Company Secretary,

and discussed the results with me.

Scoping (March 2023)

The scope and objectives of the review were agreed following a brieﬁng meeting

between the Company Secretary and Lintstock.

Tailoring (March – April 2023)

Lintstock collaborated with the Chair and the Company Secretary to design bespoke

surveys tailored to the business needs of Rank Group and to ensure that key action

points from the 2022 Board review were addressed.

As well as covering key governance enablers such as information, composition and

communication, the review considered people, strategy and risk areas relevant to the

performance of Rank. The review had a particular focus on the following areas:

– the role of the Board in ensuring value creation

– the integration of stakeholders in Board decision-making

– the evolution of Rank’s culture as the Company expands internationally

Completion (May 2023)

Board members completed surveys assessing the performance of the Board and each

of its committees, as well as the performance of the Chair. Each director also

completed a self-assessment questionnaire addressing their own performance.

Interviews (May 2023)

In-depth interviews with Board members were conducted by two Lintstock Partners.

The interviews were informed by the completed surveys and focused on exploring

key priorities and opportunities to increase Board effectiveness.

Observation (June 2023)

A Lintstock Partner observed the June Board and reviewed

the accompanying Board packs.

Analysis and Delivery of Reports (June 2023)

Lintstock analysed the ﬁndings from the process and delivered focused reports

that reﬂected the ﬁndings from the review, including recommendations

to increase Board effectiveness.

Board Discussion & Presentation (August 2023)

Lintstock’s ﬁndings were shared with the Chair and then presented to the Board

for discussion. Actions were agreed for implementation and monitoring.

These outcomes are detailed below.

Board effectiveness review

It is incumbent on the Committee to ensure that a formal and rigorous review of the

effectiveness of the Board, its Committees and each Director is conducted each year.

The process for the Board’s effectiveness review is set out below.

In 2022, Rank engaged Lintstock Limited (‘Lintstock’), an independent advisory ﬁrm

that specialises in Board reviews, to undertake a two-to-three-year externally facilitated

evaluation process. For 2022/23, Lintstock conducted an in-depth interview led evaluation

process, with a key focus on the Board. (More information on Rank’s 2021/22 evaluation

process can be found in the 2022 Annual Report, available on www.rank.com.

The process followed for the 2022/23 Board effectiveness review:

As part of the review, Lintstock also delivered a Board discussion document informed

by the Lintstock Governance Index, which put the Board’s performance into context

through a comparison of 36 Board performance metrics with peers.

The Rank Group Plc

Annual Report 2023

106

Nominations Committee Report

Continued

“

We continue to believe

that the Board provides

an appropriate blend

of executive and non-

executive skills to meet

the Group’s needs.”

Alex Thursby

Chair of the Nominations Committee

For more information

on our Board skills,

experience and

tenure, please see

pages 98 to 99.

Board progress against 2022/23 actions

During the year, the Board considered its delivery against the areas of particular focus

that had been identiﬁed under the 2022/23 evaluation exercise. Overall, it considered

that it had made good progress as follows:

Agreed action areas

Progress made in 2022/23

1. Strategy

The Board received detailed presentations during

the Strategy Day in March setting out the longer-term

horizon view of each business area and discussed the

strategic elements that will enable the plans. This

included technology and people, and where further

investment is required.

Developing the

ESG Strategy

The Board were pleased to see the progress through

the ESG & Safer Gambling Committee, noting that

the business was starting to provide more focused

reporting with their respective timelines to advance

ESG and Safer Gambling across the business and

embed as part of operational considerations. The Board

members were also pleased to see the development of

the eight KPIs and look forward to receiving updates

during 2023/24. See pages 42 to 43 for more

information on how ESG considerations have formed

part of the Board’s decision-making during the year.

Managing talent, generally

and more speciﬁcally from

a diversity and inclusion

and remuneration

perspective

The Board discussed and approved the Culture and

People Plan which detailed the transformational plan

for the Group. The Board welcomed the plans and look

forward to receiving progress updates during 2023/24

to reﬂect the Group’s commitment to drive the diversity,

equality and inclusion agenda. The Board was also

pleased to see the People & Culture plan starting to

embed itself as part these key considerations.

Outcomes from 2022/23 Board effectiveness review

The Board welcomed the effectiveness review process, and which identiﬁed the

strengths of the Board and opportunities to further increase its impact. For the

forthcoming year the Board agreed areas of focus that would greatly enhance the

current processes. See below the strengths identiﬁed and key areas in focus to enhance

the Board’s effectiveness in the year ahead.

Key strengths:

–

There was conﬁdence in the Board’s oversight of key external developments, including

regulation of the sector and the wider economic climate.

–

The Board’s understanding and engagement with key stakeholders – including the

majority shareholder, employees, and regulators – was rated highly.

–

The Board’s strong focus on safer gambling, including when taking strategic decisions.

Key areas to enhance effectiveness for the year ahead:

–

To ensure Board meeting agendas address the key business priorities, and build

additional opportunities to meet informally between Board meetings.

–

Maintain continued strong focus and collaboration to ensure meetings are an effective

platform to address key business priorities.

–

Enhance the Board’s role in the development of the strategic plan and drive enablers

to address.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

107

Inclusivity and diversity at all levels

We recognise that to be a successful

Company and to achieve our strategic

goals, Rank must be both inclusive and

diverse. This must be reﬂected throughout

the organisation, including on the Board.

I am pleased to report that women comprise

more than a third of our Directors and the

Board meets the recommendations of the

Parker Report. We have one director from

an ethnic minority background and at

least one senior board position, the senior

independent director, held by a woman. In

addition to this, all of our board committee

chair positions are held by women.

2023

2022

Board

Female

42.86%

(37.50%)

Male

57.14%

(62.50%)

Executive

Female

36.36%

(30.77%)

Male

63.64%

(69.23%)

Senior

management*

Female

34.69%

(30.00%)

Male

65.31%

(70.00%)

*Direct reports to the Executive Committee.

The Committee is committed to

continuing to review its composition from

a diversity perspective, including working

towards meeting the 40% gender target of

women in senior leadership positions and

increasing the ethnic minority

representation in senior roles.

To ensure we have oversight of progress

made in this area across the Company, the

Committee considers performance against

the Company’s inclusion and diversity

strategy, which emphasises the desire

to achieve a diverse workforce across

all grades. The strategy is based on four

key aims, namely: (i) create an inclusive

environment which facilitates our

colleagues to develop, be creative and

deliver exceptional service; (ii) ensure

there is a diverse workforce across all

grades; (iii) make inclusion and diversity

integral to how we do business, and

(iv) demonstrate leadership on inclusion

and diversity, internally and externally,

positioning Rank as an ‘employer’ of

choice. The Committee considered and

welcomed the progress made during the

year against each of these four aims as set

out on page 56 and in more detail in our

2023 Sustainability Report.

During the year, the Committee also

considered the results of the Employee

Opinion Survey (Pulse in May 2022 and

full in September 2022) so far as questions

related to inclusion and diversity and was

pleased to see that the Group-wide

engagement score increased between

September and April and the inclusion and

diversity-related activities during the year

were well-received. The Committee also

received recruitment data to review and

challenge as it deemed appropriate to

ensure alignment with our policy to

recruit the best candidate having regard

to the skills and experience required, but

with a mind to diversity, including gender

and ethnicity.

Nominations Committee evaluation

It is incumbent on the Board to ensure

that a formal and rigorous review of

the effectiveness of the Committee

is conducted each year. During 2022/23,

Rank’s evaluation exercise focused at

Board level, facilitated externally by

Lintstock Limited. As part of the process,

the review commented on whether the

Committee was operating effectively and

it was concluded that this was the case.

The review has also helped to shape the

areas in focus for the year ahead.

The Committee’s progress against last

year’s actions are set out below, and focus

for 2023/24.

Progress on 2021/22 agreed focus

areas during the year.

1. Agreed action

To evaluate the success of previous

succession plans and focus, in particular

on planning for the Chair, Chief Executive

and Executive Committee.

Progress made during 2022/23

During the year there was a detailed

review of the succession plan for the Chair,

Chief Executive and Executive Committee.

Furthermore, a review of Board skillsets

with succession planning for the Board

in mind, led to a search process for an

independent Non-Executive Director.

2. Agreed action

To continue to ensure there is ongoing

challenge as to progress/achievements

against the inclusion and diversity

strategy, with a particular focus on ethnic

diversity and the pipeline for maintaining

progress in relation to gender diversity.

Progress made during 2022/23

The Committee assessed the progress

of inclusion and diversity initiatives

throughout the year following reports

received from the Chief People Ofﬁcer.

The Committee was pleased to see the HR

dashboard through which we are looking

to improve and extend the level of data

captured and which will form Board level

updates as part of wider People and

Culture strategy improvements.

3. Agreed action

To conduct a more in-depth external

evaluation of the Board and its Committees,

involving Director interviews, once recent

changes to the Board’s composition

have settled.

Progress made during 2022/23

An in depth external evaluation was

conducted by Lintstock and was primarily

focused at the Board level. The process

included pre-questionnaires and

interviews, as well as observation of the

Board. The process included Committee-

focused questions, which the Committee

considered as part of setting focus areas

for the following year.

Focus for 2023/24

Following the outcomes of this year’s

Board effectiveness review and as part

of the Committee’s annual evaluation

and consideration of matters for the

forthcoming year, we agreed that our

focus for the year ahead should be:

1. To reﬂect and draw from the insights of

the Board effectiveness review and ensure

both the Board and senior management

reﬂect the skills required to deliver the

Company’s strategic aims, including

focused training.

2. To continue to focus and develop a robust

succession plan with a diverse talent

pipeline into senior management roles.

3. To provide development and support

to senior management to ensure they

have the right skills and display a growth

mindset necessary to continue to build

a high performing culture.

I look forward to meeting shareholders at

the forthcoming Annual General Meeting,

when I will be happy to answer any

questions on this report.

Alex Thursby

Chair of the Nominations Committee

The Rank Group Plc

Annual Report 2023

108

Nominations Committee Report

Continued

Committee membership and attendance

Appointed to Committee

Attendance

Current members

Karen Whitworth (Chair)

November 2019

4/4

Lucinda Charles-Jones

June 2022

2/2

Katie McAlister

January 2022

4/4

Other members during the year

Steven Esom

July 2015

2/2

Steven Esom stepped down from the Committee in December 2022 following his resignation from the Board.

2. Lucinda Charles-Jones was appointed to the Committee in January 2023.

Meeting and attendees

The Committee members attended four scheduled meetings and met separately during

the year to discuss matters without management present. The external auditor and the

Director of Internal Audit were also provided the opportunity at each meeting to discuss

matters without the presence of management.

The Committee Chair invites other regular attendees including the Chief Executive,

Chief Financial Ofﬁcer, Chief Information Ofﬁcer, Group Finance Director, Director

of Internal Audit, General Legal Counsel, and representatives of the external auditor.

The Company Secretary attended meetings to support the Committee.

“

The Committee provides independent

challenge and oversight of the

Group’s risk management systems,

internal control processes and

financial reporting.”

Karen Whitworth

Chair of the Audit Committee

Role and responsibilities

The role of the Committee is primarily to

support the Board in fulﬁlling its corporate

governance obligations so far as they

relate to the effectiveness of the Group’s

risk management systems, internal control

processes and ﬁnancial reporting. Its key

responsibilities include:

–

Reviewing the integrity of the annual

and interim as well as any formal

announcements relating to the Group’s

ﬁnancial performance.

–

Reviewing and challenging key

accounting judgements and narrative

disclosures within the ﬁnancial

statements.

–

Reviewing and assessing the

effectiveness of internal control systems,

including ﬁnancial and operational

controls, in addition to the framework

for risk management.

–

Performing a robust assessment of

the Company’s management processes,

including the identiﬁcation and mitigation

of principal and emerging risks.

–

Reviewing the internal audit programme

and any signiﬁcant ﬁndings, as well as

the effectiveness and independence

of the Internal Audit function.

–

Considers reports from the external

auditor and management’s response to

their recommendations. It assesses the

quality of the external auditor, considers

their appointment, terms of engagement

and their remuneration. It monitors the

independence of the auditor and the

provision of non-audit services.

The formal terms of reference of the Committee

are available at www.rank.com or by written request

to the Company Secretary, who acts as secretary to

the Committee.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

109

Audit Committee Report

Key activities during

the year

–

Considered and assessed all accounting

judgements made in the preparation of

the ﬁnancial statements including items

of signiﬁcant impact.

–

Continued to assess and monitor

the principal and emerging risks

for the Group, particularly in light

of the uncertain macroeconomic

conditions and lower than expected

business performance.

–

Assessed the Group’s plans to implement

improvements to its ﬁnancial control

framework, which formally documents

the Group’s ﬁnancial control processes,

risks and controls.

–

Assessed disclosure requirements and

assurance programme to support the

Group’s reporting against the Task Force

on Climate-related Financial Disclosures

(‘TCFD’) and considered the impact of

climate related matters on the key

ﬁnancial judgements, concluding they

had immaterial impact at 30 June 2023.

–

Considered the BEIS consultation on

‘Restoring trust in Audit and Corporate

Governance’ and its potential impact

on the Group.

–

Considered the impact of compliance

and whistleblowing reports.

–

Considered the external quality

assessment of the Group’s Internal

Audit function.

–

Assessed the liquidity arrangements

for the Group, with a particular focus

on the maturity of the Group’s term loan

and revolving credit facilities, including

the reﬁnancing process.

–

Rank’s 30 June 2022 external audit

was subject to the Financial Reporting

Council’s (‘FRC’s’) audit quality

inspections of auditors, as part of

the FRC’s normal cycle of review.

Dear shareholders

I am pleased to present the Audit

Committee Report for the 2022/23 ﬁnancial

year. During the year, the Committee has

continued to carry out a key role within the

Group’s governance framework, supporting

the Board in monitoring and reviewing the

systems for risk management, internal

control and ﬁnancial reporting.

Key activities

During the year the Committee’s core

duties remained largely unchanged and

the regular focus on ﬁnancial reporting,

risk management and internal controls

remained in place.

Key matters that formed committee

discussions during the year included the

key accounting judgements made in the

preparation of the ﬁnancial statements, the

identiﬁcation and management of Group’s

principal and emerging risks, the Group’s

liquidity requirements as part of the

reﬁnancing exercise, and the various

regulatory and disclosure requirements

that will impact the Group, particularly

requirements in respect to Task Force

on Climate-related Financial Disclosure

(TCFD) and Corporate Governance reform.

We received regular updates from the Risk

Committee and considered and assessed

the principal risks to the Group, both

existing and emerging, particularly

in light of the ongoing macroeconomic

conditions and the lower than expected

business performance. Following the

robust assessment of the principal risks as

reported last year, the committee concluded

the vast majority of risks remain unchanged,

however the addition of liquidity and

funding as a principal risk (as reported

in our interim statements January 2023)

reﬂects the updated liquidity and funding

requirements of the Group in the context

of more volatile debt markets.

The performance of the business and

associated risks again contributed to our

work on the long-term prospects of the

business. The Committee reviewed

management’s assessment of the going

concern assumption and the viability

statement. The review included

consideration of forecasted cash ﬂows

aligned to the Group’s strategic plan,

downside scenarios and reverse stress test

scenarios to ensure there was appropriate

liquidity and covenant headroom.

For the purposes of the Going Concern

assessment, a 12-month forecast period

from the date of the approval of the

ﬁnancial statements was considered,

including the results of the reverse stress

test scenario. A longer period of three

years was used for assessing viability,

which is consistent with the Group’s

strategic planning period. The Committee

conﬁrmed that preparing the ﬁnancial

statements on a Going Concern basis

continues to be appropriate and

recommended the approval of the viability

statement as set on pages 88 to 89.

The Committee reviewed managements’

impairment assessment, utilising the

same ﬁnancial forecasts as the going

concern and viability statement, and is

satisﬁed that the carrying value of assets

is appropriate at 30 June 2023.

The Committee considered the presentation

and disclosure of the separately disclosed

items which were recognised in the period.

The Committee reviewed the nature of

these items, with reference to the Group’s

accounting policy, and concluded the

classiﬁcation and disclosure of the items

was appropriate and the policy had been

consistently applied across ﬁnancial years.

The Committee also assessed the

ﬁnancial controls framework, including

management’s plans to improve the

Group’s ﬁnancial control processes, risks

and mitigating controls. More information

can we found below under the Internal

Controls section of this report.

The Committee assessed and approved

the TCFD disclosures that formed part of

the Annual Report and Accounts 2023 and

ensured there was appropriate oversight of

climate related considerations aligned with

Group strategy and accounting processes.

During the year the Committee engaged

an external third-party, the Chartered

Institute of Internal Auditors (CIIA) to

perform an external quality assessment

of the Internal Audit function. The review

assessed Internal Audit against the

International Professional Practices

Framework and a detailed report was

prepared and presented to the Committee.

The Rank Group Plc

Annual Report 2023

110

Audit Committee Report

Continued

The Committee discussed the ﬁndings

from the assessment, recognising the

strengths of the internal audit department

and the recommendations made, which

sought to further improve its alignment

to the standards of the Institute Internal

Audit Code, as well as enhancements

to the operations of the internal audit

function. The Committee, recognising

the recommendations would enhance the

effectiveness of the internal audit function

requested these were implemented in the

forthcoming ﬁnancial year.

The Committee reviewed the outcomes

and feedback received from various

Gambling Commission assessments

across the business during the year. The

Committee was pleased to see the positive

outcomes and management’s response,

which led to changes to policies and

practices to better protect customers.

During the year, the Committee received

and discussed fraud and whistleblowing

reports. We considered whether the

appropriate processes and levels of

accountability were in place to effectively

manage the reports received. The

Committee was comfortable that there was

and that improvements were being made.

Internal controls

The Board has overall responsibility

for the risk management framework,

as explained further on page 80.

It delegates responsibility for reviewing

the effectiveness of the Group’s systems

of internal control to the Committee.

This covers all material controls including

ﬁnancial, operational and compliance

controls and risk management systems.

During the year, we received detailed

reports from each of the three lines of

defence so as to enable us to maintain

oversight and discuss the risks and

challenges to the Group. In particular,

the Committee reviewed the following:

–

Enterprise risk management:

We considered the manner in which

the risk management framework has

evolved and the overall appetite for risk.

We reviewed the risk management

methodology and conﬁrmed that it

continues to be appropriate. We also

considered the Group risk register in

respect of both current and emerging

risks and challenged the Executive

Directors on such risks and the their

mitigating actions. The Group’s principal

and emerging risks are set out on

pages 81 to 87.

–

Legal and regulatory:

Reﬂective of the regulatory environment

in which Rank operates, we continued

to examine the effectiveness of the

Company’s framework of compliance

controls. This included internal audit

reviews, reports on anti-money

laundering from the Nominated Ofﬁcer,

updates on material regulatory matters

from the director of compliance and

responsible gambling, taking account of

summarised reports from and guidance

issued by regulators (including following

compliance assessments), and reviews

of progress made on areas requiring

improvement. The Committee also

discussed the status of material litigation

and regulatory matters affecting the

Company, including any ﬁnancial

impact and/or disclosure requirements.

–

Health and safety:

We considered during the year ongoing

health and safety projects for the venues

estate. We also received reports from

the Group’s Head of Health and Safety

on relevant data and trends, monitoring

programme outputs and any potential

regulatory matters, including reports

made under the Reporting of Injuries,

Diseases and Dangerous Occurrences

Regulations 2013 (RIDDOR).

–

Information security, data privacy

and disaster recovery:

We considered during the year progress

made in respect of information security

and data privacy controls. This included

a review of the speciﬁc key risk indicators

for these areas and updates on trends

relating to data compliance further

to the Group’s monitoring programme.

The Committee also received updates

on the Group’s approach to information

security and disaster recovery

respectively from the Director of IT

Security and the Chief Information

Ofﬁcer. The updates provided an

overview of the Company’s critical

systems, areas of key risk (and mitigation,

as appropriate) and development

roadmaps. The Committee also received

reports from the Data Protection Ofﬁcer

on relevant data and trends, monitoring

programme outputs, ongoing projects

and any potential regulatory matters.

“

The Committee reviewed

the outcomes and

feedback received from

various Gambling

Commission

assessments across the

business during the year.

The Committee was

pleased to see the

positive outcomes and

management’s response,

which led to changes

to policies and practices

to better protect

customers.”

Karen Whitworth

Chair of the Audit Committee

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

111

–

Code of conduct and whistleblowing:

We reconﬁrmed the ongoing

appropriateness of the Group-wide

whistleblowing policy and procedure,

which is operated by an external

third-party provider, Safecall. The service

provides a multilingual communication

channel, and enables employees and

other stakeholders to report in conﬁdence

and, if they wish, anonymously, to

Safecall, which then submits reports

to the allocated appropriate individual

within the business for investigation

as necessary. Reports received during

the year were kept strictly conﬁdential

and the concerns identiﬁed were

referred to appropriate managers

within the Group for investigation and

resolution. We received an analysis of

all reports submitted during the year.

The Company’s code of conduct is

available on www.rank.com.

–

Financial Controls Framework:

We reviewed the methodology, scope

and planned approach to strengthen

the Rank ﬁnancial control environment,

through the delivery of a Group Financial

Control Framework, which will ensure

Rank have appropriate controls over

all aspects of the Group ﬁnancial

statements. Progress is well underway

in this area and this is a key step in being

prepared for the expected Corporate

Governance reform that will emerge

in the coming years.

Internal audit

The Group’s internal audit function forms

the primary source of internal assurance

to the Committee via the delivery of the

internal audit plan, which is structured to

align with the Group’s strategic priorities

and key risks and is developed by internal

audit with input from management and

the Committee. Its role is to provide

independent, objective assurance and

consulting services designed to add and

protect value by improving the Group’s

operations. Internal audit assists the

Group in accomplishing its objectives

by bringing a systematic, disciplined

approach to evaluate and improve the

effectiveness of risk management, control

and governance processes. The internal

audit function is governed by its Group

Internal Audit Charter (‘GIAC’), which the

Committee reviews annually to ensure it

remains appropriate for the function and

organisation, and that the function can

discharge its responsibilities fully.

Each year, the Committee reviews

and approves the internal audit plan.

The plan is kept under review, depending

on operational or other business

requirements, with any changes being

discussed and agreed with the Committee.

The Director of Internal Audit submits

reports on completed audits to each

Committee meeting.

The ﬁndings are discussed by the

Committee, together with any implications

arising from such ﬁndings on the broader

control environment. Recommendations

arising from internal audit reviews are

discussed and agreed with the relevant

business area for implementation of

appropriate corrective measures and the

Committee monitors senior management’s

resolution of identiﬁed issues. During the

year, a number of control improvements

were observed and the Committee

challenged senior management to ensure

certain key changes were made to the

control environment.

The work undertaken by internal audit

during the year included: review of the

IT active directory, Rank Interactive

marketing compliance review, IT perimeter

security review, IT systems development

lifecycle, a payroll follow-up audit and a

review of high value customer controls in

Rank Interactive. A number of individual

venue audits were also completed during

the period, focusing on regulatory and

licencing compliance, cash management

and gaming controls. In addition to the

above, the internal audit team also assisted

with ad hoc controls improvement work

that arose during the year.

During the year the Committee reviewed

the skills and depth of the internal audit

team and approved the recruitment of

additional resources, including a

specialist IT auditor.

“

We reconfirmed the

ongoing appropriateness

of the Group-wide

whistleblowing policy

and procedure, which is

operated by an external

third-party provider,

Safecall. The service

provides a multilingual

communication channel,

and enables employees

and other stakeholders

to report in confidence

and, if they wish,

anonymously.”

Karen Whitworth

Chair of the Audit Committee

The Rank Group Plc

Annual Report 2023

112

Audit Committee Report

Continued

The planned external quality assessment

of the internal audit function was

performed during the year. The outcome

of that assessment was that the function

is ﬁt-for-purpose and it is aligned to the

requirements of the standards of the

Institute Internal Audit.

External auditor

and the external audit

Ernst & Young LLP (‘EY’) has been the

Company’s external auditor since 2010.

Following an audit tender process

conducted by the Committee in accordance

with its regulatory requirements which

concluded in June 2019 (the process for

which was detailed in the 2019 Annual

Report), EY’s re-appointment as the auditor

of the Group was approved by shareholders

at the 2019 Annual General Meeting (and at

each subsequent Annual General Meeting).

There was a change of external audit

partner in 2019 following completion of

the 2018/19 external audit. There were no

contractual or similar obligations restricting

the Group’s choice of external auditor.

EY is engaged to express an opinion

on the ﬁnancial statements. It reviews the

data contained in the ﬁnancial statements

to the extent necessary to express its

opinion. It discusses with management

the reporting of operational results and

the ﬁnancial position of the Group and

presents ﬁndings to the Committee. The

Directors in ofﬁce at the date of this report

are not aware of any relevant information

that has not been made available to EY and

each Director has taken steps to be aware

of all such information and to ensure it

is available to EY. EY’s audit report is

published on pages 154 to 163.

During the year, Rank’s 30 June 2022

external audit was subject to the Financial

Reporting Council’s (‘FRC’s’) audit quality

inspection of auditors, as part of the FRCs

normal cycle of review. I am pleased to

report the outcome received a rating of

‘Good’, being the highest rating possible.

In order to assess the independence

and effectiveness of the external auditor

(including its objectivity, mindset and

level of professional scepticism), the

Committee carried out an assessment.

This was facilitated by use of a

questionnaire which posed questions in

relation to different aspects of the external

audit process, including the planning,

execution and quality of the audit.

Feedback was sought from members

of the Committee and senior management

of the business areas subject to the audit.

The feedback was considered, discussed

and summarised by management and

reported to the Committee and Board.

The Committee Chair also discussed the

feedback with the external audit partner.

Having conducted such review, and

reviewed overall performance, we have

concluded that EY has demonstrated

appropriate qualiﬁcations and expertise

throughout the period under review, and

that the audit process was effective.

Non-audit services

The Committee oversees the nature and

amount of any non-audit work undertaken

by the external auditor to ensure that

it remains independent. Consequently,

we are required to approve in advance

all non-audit services, with any non-audit

services below such amount being within

the delegated authority of the Chief

Financial Ofﬁcer (although in practice

he would still notify these items to the

Committee). When seeking external

accountancy advice in relation to non-audit

matters, the Group’s policy is to invite

competitive tenders where appropriate.

It is also the Group’s policy to balance the

need to maintain audit independence with

the desirability of taking advice from the

leading ﬁrm in relation to the matter

concerned and being efﬁcient.

The total non-audit fees paid to EY during

the period under review was €8,000

(2022: £35,314) (including interim fees).

Rank has used the services of other

accounting ﬁrms for non-audit work

during the period under review.

Fair, balanced and understandable

One of the key compliance requirements

in relation to a group’s annual report and

accounts is that, taken as a whole, they are

fair, balanced and understandable.

The coordination and review of Group-wide

contributions to Rank’s Annual Report and

Accounts follows a well-established

process, which is performed in parallel

with the formal process undertaken by the

external auditor. A summary of the process

is as follows:

–

A qualiﬁed and appropriately

experienced senior management team

lead the process, under the direction of

the CFO. The team primarily comprises

the Group Finance Director, Company

Secretary, and the Director of Investor

Relations and ESG.

–

A comprehensive review and veriﬁcation

process assesses the factual content of the

Annual Report and Accounts and ensures

consistency across various sections.

–

A common understanding exists across

the senior management team which

ensures consistency and overall balance

of the report.

–

A transparent process to ensure

disclosure of all relevant information

to the external auditor.

–

A near-ﬁnal draft of the report is reviewed

by the Committee.

–

Formal approval of the Annual Report and

Accounts is given by a committee of the

Board (usually the Finance Committee).

Taking this approach enabled the

Committee to recommend to the Board,

and then the Board itself, to conﬁrm

that the Company’s 2023 Annual Report

taken as a whole is fair, balanced and

understandable and provides the

information necessary for shareholders

to assess the Company’s position and

performance, business model and strategy.

Key judgements and financial

reporting matters

The Committee assesses and challenges

whether during the year suitable

accounting policies have been adopted

and whether management has made

appropriate estimates and judgements.

Key accounting judgements considered,

conclusions reached and their ﬁnancial

impacts during the year under review

are set out in the table on page 114.

We discussed with the external auditor

the signiﬁcant issues addressed by the

Committee during the year and the

areas of particular focus, as described

in the independent auditor’s report

on pages 154 to 163.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

113

Key judgements and ﬁnancial reporting matters 2022/23

Audit Committee review and conclusions

Going concern and viability statement

The Directors must determine that the business is a going

concern for the period up to 31 August 2024 from the date of

signing the accounts. Furthermore, the Directors are required

to make a statement in the Annual Report as to the longer-term

viability of the Group. This has been analysed in detail, including

the downside scenarios modelled in the viability statement in

light of trading performance during the year.

The Committee reviewed management’s assessment of the going

concern assumption and the viability statement. The review

included consideration of forecasted cash ﬂows aligned to the

Group’s strategic plan, including downside scenarios and reverse

stress test scenarios, to ensure there was appropriate liquidity

and covenant headroom. Consideration was given to the maturity

proﬁle of the Group’s revolving credit facilities, and the

Committee took time to understand and challenge, where

necessary, signiﬁcant judgements and assumptions in the

modelling, the reverse stress test models and covenant and

liquidity headroom. Furthermore, the Committee evaluated

management’s work in conducting a robust assessment of the

Group’s longer-term viability, afﬁrmed the reasonableness of the

assumptions and considered whether a viability period of three

ﬁnancial years remained most appropriate considering the

debt maturity proﬁle and the ability of the Group to reﬁnance.

The Directors were able to conﬁrm that it was appropriate to

prepare the ﬁnancial statements on a going concern basis and

recommended the approval of the viability statement to the Board.

Further detail can be found on pages 88 and 89.

Impairment review

For goodwill and indeﬁnite-life assets, the Group performs

an annual impairment review. In addition, the Group reviews

assets that are subject to amortisation or depreciation for events

or changes in circumstances that indicate that the carrying

amount of an asset or cash-generating unit may not be

recoverable. If an asset has previously been impaired the Group

considers whether there has been a change in circumstances

or event that may indicate the impairment is no longer required.

The Group considers each venue to be a cash-generating unit and

the review covers approximately 130 individual cash-generating

units (‘CGU’), with goodwill and indeﬁnite life assets considered

at a group of CGU level.

The Committee reviewed management’s impairment review

process including, where applicable, the potential indicators

of impairment and/or reversal, cash ﬂow projections aligned to

the strategic plan, growth rates and discount rates used to derive

a value in use (‘VIU’), multiples used in VIU, the sensitivity to

assumptions made, and used VIU for all CGUs consistent with

the prior year.

The Committee reviewed and agreed the value of impairment

charges and reversals recognised in 2022/23 and reviewed

the disclosures including the sensitivity disclosures of changes

in key assumptions. Further details are disclosed in note 13

on pages 192 to 195.

Treatment of separately disclosed items (‘SDIs’)

The Group separately discloses certain costs and income that

impair the visibility of the underlying performance and trends

between periods. The separately disclosed items are material and

infrequent in nature and/or do not relate to underlying business

performance. Judgement is required in determining whether

an item should be classiﬁed as an SDI or included within the

underlying results.

The Committee reviewed the presentation treatment of SDIs

and agreed that the items listed in note 4 are appropriate.

The Committee noted that from a quality of earnings perspective,

both accretive and dilutive impacts had been recorded in both

the current and prior years.

Compliance with laws and regulations

The Group operates in an evolving regulatory environment

with increasingly complex laws and regulations, particularly

gambling-related regulations.

The Committee reviewed management’s approach to complying

with laws and regulations including assessing the potential

ﬁnancial impact, accounting and disclosure for any potential

non-compliance.

Taxation

The Group holds provisions for certain tax matters, in addition

to the normal provisions for corporation tax.

In assessing the appropriateness of indirect tax provisions, the

Group must estimate the likely outcome of uncertain tax positions

where judgement is subject to interpretation and remains to be

agreed with the relevant authority.

At both the half and the full year, the Committee considered the

Group’s approach to tax provisioning, in order to satisfy itself how

management came to its best estimate of the likely outcome.

The Committee received and considered an update paper covering

the Group’s ongoing direct and indirect tax matters. This covered

continuing operations where tax returns submitted have been,

or are likely to be, challenged by the relevant tax authority.

The Committee considered that management’s best estimate

of tax liabilities is appropriate.

The Rank Group Plc

Annual Report 2023

114

Audit Committee Report

Continued

Governance

All members of the Committee are

independent Non-Executive Directors

and the Board is satisﬁed that they have

signiﬁcant knowledge and business

experience in ﬁnancial reporting,

risk management, internal control

and strategic management. In addition,

I meet the requirement to bring recent

and relevant ﬁnancial experience to the

Committee and further information about

my experience can be found on page 98.

I can conﬁrm that the Board is satisﬁed

that the Committee has the resources and

expertise to fulﬁl its responsibilities and,

has competence relevant to the sector

in which the Company operates.

Audit Committee evaluation

It is incumbent on the Board to ensure

that a formal and rigorous review of the

effectiveness of the Committee is

conducted each year. During 2022/23,

Rank’s evaluation exercise focused at

Board level, facilitated externally by

Lintstock Limited. As part of the process,

the review commented on whether the

Committee was operating effectively

and concluded that this was case, having

received an overall rating of high from the

review. The Committee, in its broad role

and remit remains appropriate for the

current needs of the business,

The Committee’s progress against last

year’s actions are set out below, along with

focus areas for the year ahead.

Progress on 2021/22 agreed focus

areas during the year.

1. Agreed actions

Supporting a review of Group ﬁnancial

controls following the arrival of Richard

Harris as Chief Financial Ofﬁcer and as

the Group further considers the potential

impact of Corporate Governance reform

(including the proposed introduction of an

audit and assurance policy) and feedback

from the BEIS benchmarking work.

Progress made during 2022/23

The Committee received a detailed paper

outlining the ﬁnancial controls framework

and which proposed some enhancements

to the framework. The Committee were

also kept informed of the changes within

the ﬁnancial controls team, and which

saw further controls experience added

into the team. This allowed the Committee

to ensure it remains ﬁt for purpose and

has the ability to manage the outcomes

of the FRC’s consultation in light of the

corporate reforms.

2. Agreed actions

Continuing to build on the relationship

and develop efﬁcient ways of working with

the external auditor.

Progress made during 2022/23

The Committee Chair and the Chief

Financial Ofﬁcer held regular meetings

with the external audit partner during the

year. A particular focus this year has been

the realignment of the audit planning

work for our interim and year end process.

The changes have been positive and has

enhanced the efﬁciencies in our

collaboration with our external auditor.

The relationship between the support

functions and the external auditors were

considered to have an excellent balance

between supportive and challenging.

3. Agreed actions

Ensuring there is clear prioritisation for

the Committee in relation to its work for

the forthcoming year, bearing in mind

in particular the current macroeconomic

conditions impacting the Group.

Progress made during 2022/23

The Committee Chair and the Chief

Financial Ofﬁcer met regularly through

the year to discuss matters of priority

in advance of committee meetings.

This ensured we had a balanced agenda

and one that was managed efﬁciently

and allowing for adequate challenge

and discussion.

Focus for 2023/24 review

Following the outcomes of this year’s review,

we agreed that our focus for the year ahead

should be to further improve effectiveness

of the Committee and consideration is being

given to add another ﬁnancially qualiﬁed

non-executive director to the Committee.

In concluding this report, I would like to

recognise and thank the senior management

and ﬁnance team, the internal audit team

and our auditors, EY for their commitment

and valuable contributions over the past

twelve months.

I look forward to meeting shareholders at

the forthcoming Annual General Meeting

when I will be happy to take questions on

this report and our work during the year.

Karen Whitworth

Chair of the Audit Committee

“

All members of the

Committee are

independent Non-

Executive Directors and

the Board believes that

Committee has the

resources and expertise

to fulfil its responsibilities

and effective oversight

required of the Group’s

risk management,

internal controls and

financial reporting.”

Karen Whitworth

Chair of the Audit Committee

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

115

2022/23 activity

Area of focus

Matters discussed

Frequency

Financial reporting

Reviewed the integrity of all draft ﬁnancial statements (including narrative).

Reviewed accounting developments and their impacts and signiﬁcant accounting issues.

Reviewed and recommended approval of interim and preliminary results announcements.

Reviewed Group accounting policies and reporting practices.

Considered approval process for conﬁrming and recommending to the Board that

the 2022 Annual Report is fair, balanced and understandable.

Reviewed and recommended approval of the 2022 Annual Report, as required

by the Board.

Reviewed appropriateness of accounting policies and going concern assumptions.

Reviewed and recommended inclusion of the viability and going concern statements

in the Annual Report.

Reviewed TCFD disclosures and compliance with ESEF/XBRL requirements.

Reviewed Director and ofﬁcer expenses.

Internal audit

Monitored the effectiveness of the internal audit function.

Reviewed major audit ﬁndings and approved remediation plans.

Reviewed the 2022/23 annual audit plan.

Reviewed the scope of audit coverage and approved planned work for 2023/24.

External audit

Considered the external auditor’s reports and views.

Reviewed the objectivity, independence and expertise of the external auditor.

Considered the Auditor’s Report on the 2021/22 annual results.

Assessed the effectiveness of the 2021/22 external audit.

Reviewed and approved the 2022/23 annual external audit plan and fee proposal.

Considered the initial results of the 2022/23 external audit.

Reviewed audit and non-audit fees incurred during 2022/23.

Risk and internal control

Oversaw the implementation of changes to internal processes as a result of matters

reported as key events to regulatory bodies, and guidance published by regulatory

bodies as learnings for the gaming industry.

Reviewed risk management reports and Risk Committee updates.

Reviewed and assessed the corporate risk register (including emerging risks).

Reviewed and monitored developments in relation to health and safety, information

security and data protection.

Reviewed anti-money-laundering matters and matters relating to source of funds

and enhanced due diligence.

Reviewed the risk management framework across the Group and the internal governance

structure (further detail on Rank’s approach to the management of risk, its principal

risks and uncertainties and the controls in place to mitigate them can be found on

pages 80 to 87).

Governance and other

Received corporate governance updates.

Considered and approved tax strategy and reviewed tax matters.

A&P

Met privately with the Director of Internal Audit and the external auditors.

Reviewed notiﬁcations made under the Group-wide whistleblowing policy and procedure,

ensuring that appropriate actions were taken following investigation of notiﬁcations,

and reviewed notiﬁcations made in relation to the code of conduct, acknowledging

the ongoing need for a review of the same.

Considered material litigation and regulatory matters.

B&P

Reviewed the Committee’s terms of reference and conﬁrmed adherence during 2022/23.

Reviewed feedback and recommendations following Committee evaluation.

Reviewed internal ﬁnancial controls.

Key

A Annual

B Biannual

Q Quarterly

P Periodically

The Rank Group Plc

Annual Report 2023

116

Audit Committee Report

Continued

“

The Committee is focused on

embedding ESG across the business

and support the long-term success

and sustainability of Rank in the

interests of all Rank’s stakeholders.”

Katie McAlister

Chair of the ESG & Safer Gambling Committee

Committee membership and attendance

Appointed to Committee

Attendance

Current members

Katie McAlister (Chair)

April 2021

4/4

Lucinda Charles-Jones

June 2022

4/4

John O’Reilly

May 2018

4/4

Alex Thursby

October 2019

4/4

Karen Whitworth

November 2019

4/4

Other members during the year

Steven Esom²

March 2016

2/2

Katie McAlister was appointed Chair with effect 1 February 2022.

Steven Esom stepped down from the Committee in December 2022 following his resignation from the Board.

Meeting and attendees

All Committee members attended four scheduled meetings during the year.

The Company Secretary, the Director of Investor Relations and ESG, the Director of

Compliance & Responsible Gambling, the Director of Public Affairs and the Managing

Directors for Grosvenor, Mecca, Rank Interactive and International are regular attendees.

Role and responsibilities

The Committee is responsible for assisting

the Company in the formulation and

monitoring of its ESG strategy. The

Committee also has a particular focus on

the Company’s approach to safer gambling.

Its responsibilities include:

–

Approving the Company’s ESG and safer

gambling strategy.

–

Reviewing the Company’s performance

against the strategy, the effectiveness of

the strategy and the governance in place

to ensure successful delivery.

–

Reviewing the effectiveness of Rank’s

systems for identifying and interacting

with customers who are at risk of

becoming problem gamblers.

–

Reviewing the results of research projects.

–

Reviewing how the strategy is received

and regarded by the Company’s

stakeholders and other interested parties.

–

Approving all ESG reporting.

–

Approving the appointment of any

external third party for assurance testing

in relation to work undertaken in

connection with the strategy.

The formal terms of reference of the Committee

are available at www.rank.com or by written request

to the Company Secretary, who acts as secretary to

the Committee.

Key activities during

the year

–

Monitored and challenged the business

in respect of progress against measures

published in the Sustainability Report

2022, which was approved in August 2022.

–

Considered feedback from stakeholders

of the Sustainability Report 2022.

–

Oversaw the continued development

and implementation of the governance

structure in support of the strategy,

including establishing key performance

indicators to measure meaningful

progress.

–

Considered initiatives to mitigate the

‘cost of living’ impact on colleagues,

customers and communities.

–

Discussed and further developed further

management’s approach to Task Force

on Climate-related Disclosures (‘TCFD’)

reporting framework.

–

Reviewed and monitored delivery of

safer gambling initiatives in each area

of the business.

–

Considered the outcomes of the UK

Government’s publication of its White

Paper on gambling legislative reforms.

–

Discussed Rank’s contribution to

developments across the industry,

including consultation responses,

working with trade associations and

discussions with Government’s review

of gambling legislation.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

117

ESG and Safer Gambling

Committee Report

Dear shareholders

I am pleased to provide a summary of the

work undertaken by the Committee over

the past 12 months and present the evolution

of our ESG strategy, progress against our

objectives and detail on our plan to reach

net zero by 2050.

The Group is committed to ensuring the

sustainability of its operations continues

to build a more resilient and responsible

business. How we identify and consider

ESG risk and opportunity is critical to the

success of our business and meeting our

stakeholders expectations for transparency

and disclosure.

I was pleased with the good progress made

during the year following the publication

of our full 2022 Sustainability Report in

September 2022, alongside the 2022

Annual Report and Accounts. This provided

the foundations to accelerate Rank’s ESG

strategy during 2022/23 and I am delighted

to publish our 2023 Sustainability Report

alongside this report and made available

on Rank’s website, www.rank.com.

Key activities

In 2021 the Committee determined that

it would provide rigour, support and

challenge to the business as it developed

and implemented its new ESG strategy.

During 2022/23, we have continued to

embed and strengthen our ESG focus into

each of the business areas, drawing on

the outcomes of the materiality assessment

carried out in 2021. During the year, the

Committee also approved eight baseline

key performance indicators (‘KPIs’) across

the four key ESG focus areas that underpin

the strategy as follows:

Customer experience – providing a

safe, secure environment and personal

experience, creating and maintaining

good gambling behaviours and

protecting vulnerable customers.

KPIs – Customer Net Promoter Scores;

Customer responses to Safer Gambling

questions; Employee responses to safer

gambling questions; and Percentage of

customers using safer gambling tools.

Colleague experience – educating our

people to enable and encourage positive

gaming behaviours whilst creating a

fair, inclusive and inspiring working

environment.

KPIs – Employee Net Promoter Score;

and Percentage of women in senior

leadership team.

Environmental management – ensuring

that our operations minimise any

negative impacts that Rank may have

on the environment and reducing our

carbon emissions wherever possible.

KPI – Energy use as an intensity ratio

(tCO

per £m Net Gaming Revenue).

Community engagement – providing

an essential social outlet for customers,

generating lasting community spirit,

driving community action and

developing a genuine social legacy.

KPI – Total charitable contributions.

Each focus area has a supporting

performance measure as well as the

primary KPIs shown above.

ESG initiatives

The Committee received business

updates during the year to assess how the

Company’s ESG objectives aligned with

the corporate and strategic objectives, see

pages 30 to 41 for more information on the

Group’s strategic intents. The Committee

is comfortable that Rank is progressing its

development of ESG initiatives in support

of the corporate strategy, and that this

will enable the business to be managed

in a sustainable and responsible way.

The Committee expects continued

development in each of the business areas

and to drive ESG considerations across all

business decision-making.

Working with each of the business

managing directors, the Committee

has sought to further encourage ESG

considerations across internal reporting.

Such focus has embedded the necessity

for each business area to ensure ESG

alignment with the corporate strategic

objectives and drive the effective delivery

of the strategy and of initiatives that

underpin it.

In continuing to develop its approach

during the year, the business has ensured

that the set four focus areas (Customers,

Colleagues, Environment and

Communities) were measurable and

challenged the business to determine

the appropriate KPIs. Reporting progress

against eight principle KPIs to the

Committee will provide a greater

understanding of the Company’s ability

to track and evaluate progress, and allow

Board-level oversight of performance

against strategy, in line with global

best practice.

It was pleasing to see the initiatives

in each business area and the Committee

is assured that the underpinning People

& Culture strategy is developing within

each business area, particularly the

focus on more diverse leadership teams.

Also pleasing was the immediate impact

on colleague engagement following the

appointment of the Chief People Ofﬁcer

in September 2022, as well as improving

our diversity at the executive level. See

page 46 and 102 for more information on

insights into Rank’s culture and colleague

engagement in the year. The charitable

work in all of Rank’s areas of business for

its local communities, across all of Rank’s

jurisdictional locations was also positive

to see, with strong partnerships, making

important differences to Rank’s local

communities, see page 47 for more on this.

The Committee oversaw executive

management’s carbon management

work through the newly formed Net Zero

Working Group (‘NZWG’) and the progress

made to develop its reporting framework

in line with the Task Force on Climate-

related Financial Disclosures (‘TCFD’).

The Committee considered the

recommendations made to set Rank

on a net zero pathway, which sets out a

measured approach, and the establishment

of an interim emissions reduction target

to be achieved by 2035, alongside the

longer-term target of achieving net zero by

2050. The Committee has worked with the

Audit Committee in determining the TCFD

aligned disclosures set out in this Annual

Report, along with the Remuneration

Committee to link sustainability

performance to executive remuneration

that further embeds the imperative of

responsible operating practices into

Rank’s core culture.

Safer gambling initiatives

Safer gambling remains the Group’s

primary focus area. The Committee has

ensured that the importance of safer

gambling within Rank’s wider ESG

framework is not diminished. We are

comfortable that this has not happened.

During the year the Committee welcomed

reports from the managing directors of each

business area to provide updates on safer

gambling initiatives. These initiatives take

a ‘customer-ﬁrst’ approach to increasing

protection, as the Group continues to evolve

its user journeys and deliver targeted

improvements for those players who need

our support. The Committee has considered

new initiatives presented by management

as well as those introduced further to the

Company’s own monitoring work or as

required by our regulators.

The Rank Group Plc

Annual Report 2023

118

ESG and Safer Gambling Committee Report

Continued

We have also considered changes resulting

from new regulatory requirements and

industry commitments.

In addition, the Committee welcomed

further proposals to strengthen a safer

gambling culture throughout the Group.

The aim of this work is to instil a consistent

approach to the processes and behaviours

our colleagues employ to achieve Rank’s

purpose, and deliver exciting and

entertaining experiences within a safe

environment. To best equip our colleagues

with the skills and understanding to

recognise problem gambling, we have

conducted extensive employee training.

Every employee must complete mandatory

safer gambling training on an annual basis,

with progress being monitored through

our online platform. Additional training

is provided as required or according to

a particular role’s needs. We have engaged

GamCare to provide bespoke safer

gambling training on an ongoing basis

to all customer-facing colleagues.

During the year, GamCare conducted an

assessment of our approach against their

Safer Gambling Standard for all Rank’s

UK facing businesses. Mecca and Rank

Interactive received conﬁrmation that they

have been awarded Advanced Level 2

accreditation. Grosvenor’s accreditation

is ongoing and likely to be determined

during the ﬁrst quarter of 2023/24.

It was pleasing to see this year’s successful

regulatory compliance assessments, and

management’s positive response to these

assessments with changes made in the

year to policies and practices to better

protect our customers.

Safer gambling horizon scanning

and industry collaboration

The Committee regards safer gambling

as a high priority topic of the Company’s

stakeholders and an important part of

its work is to consider their views on the

Company’s approach. The Committee

recognises that the Company cannot

simply look at the initiatives it has in-train

as a reaction to regulation, but must also

proactively consider customer, regulator,

colleague, shareholder, political and wider

public sentiment in its plans. The

Committee receives regular reports from

the Director of Public Affairs to ensure

that it remains up-to-date on external

sentiment, inﬂuences, developments

and political change. It challenges the

business to ensure that it considers such

views in all projects and initiatives across

all workstreams.

During the year, the Director of Public

Affairs presented regular updates to the

Committee on Rank’s ongoing contribution

to the Government’s review of gambling

legislation in the UK. Following the

long-awaited publication of the

Government’s White Paper on gambling

legislative reforms in late April, he kept the

Committee informed of the consultation

process as regulator’s consider the

implementation of the legislative reforms

(see the Chief Executive’s summary for more

information on page 28). The Committee

will continue to consider stakeholder views

and those of the industry and media

during this next phase of consultation.

Rank’s contributions to the Government’s

review have also extended to shaping

responses from the Casino Chapter within

the Betting and Gaming Council (‘BGC’),

the BGC itself and also the Bingo

Association, both of which are important

voices in respect of regulatory change.

We continue to have representation on the

Bingo Association and BGC’s committees

and their working groups, including

all those speciﬁc to land-based gaming.

We recognise the importance of our

contributions aligning with our industry

peers and where appropriate, we are

working hard to ensure that Rank’s

proposals and arguments are in tune

with our peers and operators.

Research, education, treatment

(‘RET’)

The proportion of our RET contributions

during the year was maintained at the

same level as the previous year. As well

as contributing to GambleAware, such

contributions included payments to YGAM

and GamCare as part of Rank’s four-year

commitment to industry Safer Gambling

Commitments. We are committed to

maintaining the same proportion of RET

contributions in respect of the forthcoming

year, although the Committee is aware that

the approach to RET payments is being

considered within the Government’s

review of gambling legislation.

“

Rank’s contributions to

the Government’s review

have also extended to

shaping responses

from the Casino Chapter

within the Betting and

Gaming Council (‘BGC’),

the BGC itself and also the

Bingo Association, both

of which are important

voices in respect of

regulatory change.”

Katie McAlister

Chair of the ESG & Safer

Gambling Committee

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

119

Climate change, net zero planning

and Task Force on Climate-related

Financial Disclosures

There has been increasing interest from

the investment community on how climate

change will impact companies. We

recognise that there are both internal and

external expectations on us to establish

a clear emissions reduction strategy in

line with international climate change

targets and we are working with

consultant partners in order to set Rank

on a credible carbon net zero pathway.

More detail on this is set out in the 2023

Sustainability Report.

The Committee is also cognisant of

the new requirements under Listing Rule

9.8.6R, which the Group is required to

adopt this year, to include a statement

in this Annual Report setting out whether

our climate-related ﬁnancial disclosures

are consistent with the recommendations

of the TCFD. Our disclosures can be found

on pages 62 to 70 with the compliance

statement found on pages 69 to 70 of this

Annual Report. The Committee has

worked alongside the Audit Committee

to ensure the integrity of the Committee’s

climate-related risk process, as well as

reviewing the recognition, measurement,

presentation and disclosure of climate-

related matters (including impact

on the Group).

ESG & Safer Gambling

Committee evaluation

It is incumbent on the Board to ensure

that a formal and rigorous review of

the effectiveness of the Committee is

conducted each year. This year, Rank’s

evaluation exercise focused at Board level,

facilitated externally by Lintstock Limited.

As part of the process, commentary

included whether the Committee was

operating effectively. I am pleased to report

the Committee is performing effectively

and as a result, our ESG objectives are

becoming increasingly clearer. The

Committee will continue to work with

management to maintain and improve

the focus on ESG across all areas of the

business, whilst ensuring safer gambling

initiatives remain the primary focus.

The Committee’s progress against last

year’s actions and focus for the year ahead

are set out below.

Progress on 2021/22 agreed focus

areas during the year.

1. Agreed actions

To develop the Committee’s meeting

agendas further in-line with the newly

developed focus areas of Customer

Experience, Colleague Experience,

Environmental Management and

Community Engagement and their

associated KPIs.

Progress made during 2022/23

The Committee ensured all business

reporting was focused on the key priorities

and developments against that of the

customer experience, colleague experience,

environmental management and

community engagement.

2. Agreed actions

To ensure clear accountability for reporting

under the new KPIs, delivery of actions

and tracking of progress.

Progress made during 2021/22

The Committee approved eight baseline

KPIs across the four key priorities (as set

out above) which underpin the strategy.

Also approved were four KPIs for

remuneration target measures – see the

Remuneration Report for details on how

this was implemented in the year on

page 137.

Focus areas for 2023/24

Whilst there were no particular outcomes

for the Committee evaluation this year,

we continue to focus on the development

and monitoring of management’s ESG

initiatives, and measure achievement

through appropriate KPIs. The Committee

concluded the focus for the year ahead

should continue to keep management

accountable for all areas of ESG and

ensure Remuneration and Audit

Committee KPI’s align.

To maintain the focus and continued

development of ESG reporting on the

four focused areas of customer

experience, colleague experience,

environmental management and

community engagement.

To continue to evolve and measure

management’s delivery of ESG

initiatives under the four KPIs.

3. To assess and monitor the development

of the net zero plan.

In conclusion

Rank recognises the importance of

continuing to strengthen ESG across

all Rank’s operations and to ensure a

sustainable and resilient business which

operates in the interests of all our

stakeholders. By working closely with

our Board colleagues and all of Rank’s

Committees, the Committee is looking

to thread ESG into all areas of the business.

The increased clarity to measure progress

through the KPI measures will be critical

to aid the Committee in ensuring Rank

remains aligned to its strategy and one

that protects shareholder value, creates

opportunities for growth and innovation

and sets Rank’s long-term success.

We remain committed to providing a

safe gambling environment for customers

to enjoy the services that we offer. We aim

to work constructively with regulators,

particularly in light of the White Paper,

to ensure ongoing compliance with

regulatory requirements and our

alignment with our industry peers

and continue to develop a collaborative

approach to safer gambling matters such

as improving the identiﬁcation of

vulnerable customers. As Rank continues

to focus and strengthen its cultural values

throughout the organisation this will

ensure that safer gambling underpins

all aspects of our decision-making.

On behalf of the Committee, I look forward

to reporting on the further progress and

continued development that will be made

over the forthcoming year that will support

our ESG strategy and agenda. I will be happy

to an answer any questions on this report

at the forthcoming Annual General Meeting.

Katie McAlister

Chair of the ESG & Safer Gambling

Committee

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Annual Report 2023

120

ESG and Safer Gambling Committee Report

Continued

“

Alongside providing oversight for

material projects, estate management

and other approvals, the Committee has

reviewed the policy for managing energy

costs in the context of an unprecedented

market backdrop.”

Alex Thursby

Chair of the Nominations Committee

Committee membership and attendance

Appointed to Committee

Attendance

Current members

Alex Thursby (Chair)

October 2019

9/9

Richard Harris

May 2022

9/9

John O’Reilly

May 2018

9/9

Meeting and attendees

All Committee members attended nine scheduled meetings and two additional

meetings convened during the year. The Company Secretary also attended

all Committee meetings.

Role and responsibilities

The Finance Committee is authorised by

the Board to approve capital expenditure,

make ﬁnancing decisions and approve

contractual commitments for the Group up

to authorised limits. It also approves all of

the Group’s insurance cover and reviews

Non-Executive Director fees. The

Committee acts as the Board’s disclosure

committee for the purposes of the Market

Abuse Regulation which came into force

on 3 July 2016 and considers the materiality

of information and determines disclosure

obligations on a timely basis of all such

information to regulatory authorities

including the London Stock Exchange.

The formal terms of reference of the Committee

are available at www.rank.com or by written request

to the Company Secretary, who acts as secretary to

the Committee.

Key activities during

the year

–

Approved regulatory news statements

(on authority delegated from the Board).

–

Reviewed matters relating to key

contracts and spend proposals for

projects such as LED lighting rollout

in our UK venues businesses.

–

Reviewed and approved estate

management proposals including lease

renewals and the appointment of a new

management provider that will support

better asset management across our

estate, including improvements in

energy efﬁciency.

–

Reviewed share administration proposals.

–

Reviewed and approved proposals for

Group insurance renewal.

–

Reviewed Non-Executive Director fees

and, following careful consideration,

approved increases. See the Remuneration

report on page 147 for more information).

–

Reviewed the Committee’s terms

of reference.

–

Provided oversight of subsidiary board

composition, reviewed directorships,

worked to ensure compliance

requirements for board composition

were met locally.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

121

Finance Committee Report

Dear shareholders

During the year, the Committee continued

to provide an important level of oversight

for material contracts and business projects,

estate management and other approvals

in accordance with its delegated level

of authority, considering all critical issues

ahead of their presentation to the Board.

Estate management

and capital investment

During the year under review, the

Committee focused in particular on

supporting executive proposals relating

to estate management, including the

regearing of leases to improve terms

during the year and difﬁcult but necessary

decisions made on club closures in line

with the Group’s strategic plan.

Capital investment

and material contracts

During the year we took the decision

to change our facilities management

provider. The new provider will support

improved asset management across the

estate, provide improved preventative

maintenance, identify equipment that

needs replacing and ensure our venues

are operating in an energy efﬁcient way.

The Committee discussed and considered

key agreements and investment proposals,

cognisant of the need to ensure alignment

against strategic aims. Approved capital

investments in the year sought to leverage

against investments already made, such

as the proprietary digital platform.

Utilities and environmental impact

The Committee reviewed the policy for

managing energy costs in the context

of an unprecedented market backdrop.

It considered the options available to the

Company in seeking to mitigate that impact

and management’s preferred approach,

including Rank’s energy buying policy,

the signing of a power purchase agreement

and the switch to using renewable

electricity sources. The Committee referred

these matters to the Board and provided

updates to the Board as appropriate.

Finance Committee evaluation

It is incumbent on the Board to ensure

that a formal and rigorous review of the

effectiveness of the Committee is

conducted each year.

This year, Rank’s evaluation exercise

focused at Board level, facilitated externally

by Lintstock Limited. As part of the process,

commentary included whether the

Committee was operating effectively. It was

concluded the Committee is performing

effectively and in particular, allowing for

early consideration and groundwork on

matters ahead of Board discussions.

The Committee’s progress against last

year’s actions are set out below.

Progress on 2021/22 agreed focus

areas during the year.

Agreed action

To continue to evaluate its role over the

course of the year to ensure that its place

within the Company’s governance structure

remains appropriate and effective.

Progress made during 2022/23

The Committee allowed for early

discussion of key business proposals and,

as a result, was able to make informed

recommendations to the Board for further

discussion and decision-making. By taking

this approach, the Committee demonstrated

a proactive approach in handling business

matters and allowed the Board to have

well-considered options.

Focus areas for 2023/24

Whilst there were no speciﬁc areas

identiﬁed for the Committee to focus on,

it should continue to evaluate its role and

relevance in the governance structure.

In particular, whether taking a proactive

approach on handling business matters

ahead of Board discussions, it continues

to add value and support well-considered

Board decisions.

I would of course be happy to answer any

questions about the role of the Committee

and its activities during the year under

review at the forthcoming Annual

General Meeting.

Alex Thursby

Chair of the Finance Committee

The Rank Group Plc

Annual Report 2023

122

Finance Committee Report

Continued

“

The Committee’s decision-making

on remuneration outcomes has been

shaped by the overall financial

performance and the delivery of our

Environmental, Social and Governance

strategy over the financial year.”

Lucinda Charles-Jones

Chair of the Remuneration Committee

Committee membership and attendance

Appointed to Committee

Attendance

Current members

Lucinda Charles-Jones (Chair)

June 2022

4/4

Karen Whitworth

November 2019

4/4

Katie McAlister

April 2021

4/4

Other members during the year

Steven Esom²

March 2016

2/2

Lucinda Charles-Jones was appointed Chair of the Committee in January 2023.

Steven Esom stepped down from the Committee in December 2022 following his resignation from the Board.

Meeting and attendees

All Committee members attended four scheduled meetings and one additional meeting

that was convened during the year to discuss executive salaries and ESG targets. The

Committee also discussed matters outside of meetings to approve remuneration for new

appointments and adjustments which had already been discussed at meetings in respect

of salaries and discretionary bonuses. The Committee also met separately to discuss

matters without the presence of management.

The Company Secretary, Chair and Chief Executive attend meetings of the Committee,

except for matters that relate to their remuneration. Also, in regular attendance are the

Chief People Ofﬁcer, the Reward Director, and Alvarez & Marsal as external advisors

to the Committee.

Role and responsibilities

The role of the Committee is primarily to

assist the Board in setting the remuneration

packages for the Company’s Executive

Directors and other Executive Committee

members. Its key responsibilities are to:

–

Set the Remuneration Policy.

–

Ensure that the Remuneration Policy

operates to align the interests of

management with those of shareholders.

–

Within the terms of the Remuneration

Policy (as applicable) and in consultation

with the Chair and/or Chief Executive

as appropriate, determine the total

individual remuneration package of each

Executive Director and other Executive

Committee members.

–

Approve the design of, and determine

targets for, any performance-related

pay and share incentive schemes for

approval by the Board and shareholders

(as appropriate) and the total annual

payments made under such schemes.

–

Review pay and conditions across the

Group and the alignment of incentives

and rewards with culture.

The formal terms of reference of the Committee

are available at www.rank.com or by written request

to the Company Secretary, who acts as secretary to

the Committee.

Key activities during

the year

–

Determined operation of the 2022/23

annual bonus and the 2022/23

LTIP award.

–

Conﬁrmed the ﬁnal vesting of the

2017/18 four-year block award and 2021

LTIP award.

–

Continued to keep the wider workforce

remuneration arrangements under review.

–

Approved remuneration for new

members of the Executive Committee.

–

Determined four ESG KPI measures

to align ESG with remuneration.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

123

Remuneration Committee Report

Dear shareholders

On behalf of the Board, I am pleased to

present Rank’s Remuneration Committee

Report for the year ended 30 June 2023,

my ﬁrst as Chair of the Committee.

The Report has been prepared in

accordance with the Large and Medium-

sized Companies and Groups (Accounts

and Reports) (Amendment) Regulations

2013 (as amended) (the ‘2013

Regulations’). It comprises my annual

statement, our Directors’ Remuneration

Policy, which was approved at the Annual

General Meeting held on 14 October 2021

(‘Policy’) and our Annual Report on

Remuneration, which is presented in line

with the Policy. This statement and the

Annual Report on Remuneration are

subject to an advisory vote at the 2023

Annual General Meeting.

Overview of 2022/23

As mentioned earlier in this Annual

Report, it has been a challenging year,

in particular for our UK venues businesses.

The Group’s underlying operating proﬁt

of £20.3m reﬂected lower than expected

performance, particularly in the ﬁrst half

of the year. UK consumers’ discretionary

expenditure continued to be impacted

by inﬂationary pressures, volatile energy

markets and higher interest rates. In

addition, there has been a slow return of

overseas customers to our London casinos

and the Group has faced signiﬁcant cost

pressures. The Committee’s decision-

making on the remuneration outcomes

for Executive Directors has been shaped

by the overall ﬁnancial performance for

the full ﬁnancial year.

While we saw a number of changes at an

Executive Director and senior management

level in the prior year, this year we

welcomed our new Chief People Ofﬁcer.

We recognise the key challenges and

opportunities for our business and we

continue to ensure that the Executive

Directors, and the senior management team,

remain appropriately incentivised to achieve

our strategic goals. More information on

how we aligned our approach to Executive

remuneration with the wider workforce

is outlined on page 147.

Alignment with strategy

The Committee has taken the opportunity

to further align bonus and long-term

incentive opportunities with both our

strategic plan, our purpose and values,

and shareholder experience.

This has included a revision to both the

bonus and long-term incentive performance

conditions for 2023/24, taking a more

quantative approach to the assessment

of ESG outcomes, the inclusion of a Net

Gaming Revenue (‘NGR’) measure in the

bonus plan and the inclusion of a broader

FTSE index relative total shareholder

return (‘TSR’) measure in the long-term

incentive plan.

Alignment with our wider workforce

In shaping remuneration decision-making

and outcomes, the Committee has sought

to achieve remuneration practices which

align with the wider workforce.

Base salaries

The Committee reviewed Executive

Director, Executive Committee and other

senior management salaries during the

year and the overall increase for the wider

workforce pay review, mindful of current

cost pressures and challenges experienced

throughout the year, in particular around

talent retention.

The Committee determined to increase

the Chief Executive’s salary by 4%, which

is below the overall average increase of

7.5% awarded to the wider workforce.

For the Chief Financial Ofﬁcer, in his ﬁrst

full year since his appointment in May 2022,

the Committee determined to increase

his salary by 5% reﬂecting the positioning

of his salary against market, this increase

is in line with the increase for the wider

management team and lower than the

average increase for the wider workforce.

All increases were applied with effect

from 1 April 2023.

Pension

With effect from 1 January 2023,

the Chief Executive’s payments in lieu of

pension were reduced from 10% of salary

(less the lower earnings limit), a level that

was agreed under his service agreement

when he joined Rank, to the rate currently

available to the majority of our UK

employees of 3% of salary (less the lower

earnings limit) and below the up to 10%

of salary contribution offered to

management. The Chief Financial Ofﬁcer’s

payments in lieu of pension were agreed

at 3% (less the lower earnings limit) when

he joined the Company in May 2022.

2022/23 annual bonus scheme

Considering both ﬁnancial performance

and progress against our Environmental,

Social and Governance (‘ESG’) key

performance indicators, the Committee

proposed to pay a bonus equivalent to

8.9% of maximum opportunity to the

Executive Directors.

Whilst the stretching ﬁnancial

performance targets were not met,

the Group has made strong progress in

delivering across the ESG key performance

indicators, in particular both employee

engagement and certain safer gambling

measures. Based on the targets that were

set, the Committee has therefore

determined to pay bonus at 59% of the

maximum opportunity for the proportion

of bonus subject to ESG improvements.

Further details of measures and outcomes

are disclosed on page 137 of this report.

This would have resulted in a bonus

of £71,553 to John O’Reilly and £39,544

to Richard Harris.

However, notwithstanding the importance

of ESG as a strong foundation in the

business and the strong performance

against the targets set for 2022/23,

having discussed this with the Executive

Directors, both John O’Reilly and Richard

Harris have elected to accept only 50%

of the proposed award. This is on the basis

that the 2022/23 bonus schemes for senior

management are primarily determined by

performance against the ﬁnancial targets

set for the Executive Directors, with any

resulting payments relating to 2022/23

performance only being made on a

discretionary basis to recognise

exceptional individual contribution

and for the retention of key talent.

This therefore results in a bonus

of £35,777 to John O’Reilly and £19,772

to Richard Harris.

Further details on the measures and

outcomes are disclosed on page 137

of the report.

2023/24 bonus scheme

Further to the inclusion of an ESG measure

last year, an additional ﬁnancial measure

of Net Gaming Revenue will be included

in the bonus scheme for 2023/24 and will

represent 10% of the bonus opportunity.

75% will be subject to achievement of our

adjusted earnings before interest and tax.

The remaining 15% of the maximum bonus

opportunity will continue to be based on

ESG targets and as part of the evolution and

embedding of the ESG strategy, these will

now be quantitative measures. This remains

a key area of focus for the Committee as

we are keen to ensure that ESG measures

applied to bonus opportunities are robust,

are clearly linked to implementation of the

Company’s strategy and are reﬂective of the

industry in which we operate. With this

in mind, an overarching safer gambling

assessment will continue to apply in

considering bonus outcomes.

The Rank Group Plc

Annual Report 2023

124

Remuneration Committee Report

Continued

2020 LTIP award

Based on the challenging targets set and

subsequent performance of the Group in

2022/23, the ﬁrst award made under the

2020 LTIP award granted to John O’Reilly

in December 2020 will lapse in full. Full

details of the measures and outcomes are

disclosed on page 138.

Proposed LTIP grant under

the 2020 LTIP during 2023/24

It is intended that an annual LTIP award

will be made to Executive Directors in

2023/24. This is the fourth award under

the 2020 LTIP.

The structure of the award remains

unchanged from the previous three awards,

with 40% of the award conditional on

relative total shareholder return, 30%

on underlying earnings per share and

30% based on strategic measures including

NGR growth in venues and digital, as well

as proﬁtability improvements.

To better align outcomes with shareholder

experience, vesting of the TSR performance

condition will be subject to relative

performance to both our industry peer

group and the companies comprising

the broader FTSE 250 index (excluding

investment trusts).

In line with our policy, the Chief Executive

will receive an award at 200% of salary

and the Chief Financial Ofﬁcer will receive

an award at 150% of salary, with such

awards to be made within six weeks of

the date on which the results for 2022/23

are announced.

The performance conditions will be based

on performance in the 2025/26 ﬁnancial

year. Further details can be found on

page 147. The awards will vest, subject

to meeting the performance targets

and continued employment, on the third

anniversary of grant, and will be subject

to a two-year post-vesting holding period.

Board change

Steven Esom resigned as a Non-Executive

Director on 31 December 2022. He did not

receive any payment in lieu of notice or

any payment for loss of ofﬁce in accordance

with the Policy.

Workforce engagement

As well as being appointed Chair of this

Committee, I was also appointed as the

Non-Executive Director with designated

responsibility for workforce engagement

in place of Steven Esom. This subject is

covered in more detail on page 102 of this

Report. When attending the workforce

engagement forums I ensured that I

was available to discuss executive

remuneration with colleagues and was

able to report back to the Committee and

Board as appropriate, having taken the

opportunities to engage in person this

year both in the UK and Spain with our

colleagues and without senior management

present. As part of engaging with our

colleagues on remuneration, I also recorded

a podcast on the role of the Remuneration

Committee and how it operates which was

available to all our colleagues across the

business. The Chief Executive also

responded to questions from colleagues in

relation to executive remuneration and the

approach being taken to wider Company pay

as part of his regular Town Hall sessions.

We continue to consider ways to improve

further the level of engagement in this

regard in the coming year.

Looking ahead

Over the course of the next ﬁnancial year

the Committee will be reviewing the

Remuneration Policy and will engage with

shareholders and wider stakeholders on

any key changes before this is presented

to the Annual General Meeting in 2024

for shareholder approval.

Our current Remuneration Policy is

designed to be simple and transparent and

to promote effective stewardship that is

vital to the delivery of the Group’s objectives

in line with its purpose. The Committee

will continue to provide clarity on how pay

and performance is reported at Rank and

how decisions made by the Committee

support the strategic direction of the Group.

We remain mindful of investor views on

remuneration, and strive to ensure that

management is appropriately incentivised

to achieve our strategic goals.

I look forward to receiving your support

at our 2023 Annual General Meeting,

where I will be available to respond to any

questions shareholders may have on this

report or in relation to any of the

Committee’s activities. Equally, if you

would like to discuss any aspect of our

Remuneration Policy at any time, please

feel free to contact me through the

Company Secretary.

Lucinda Charles-Jones

Chair of the Remuneration Committee

“

Inclusion of Net Gaming

Revenue in our annual

bonus plan further aligns

incentives with our short-

and long-term strategy to

deliver profitable growth.”

Lucinda Charles-Jones

Chair of the Remuneration Committee

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

125

Net gaming revenue

681.9

Underlying Operating Profit

19.1

Earnings per share

20.4

Employee engagement

score increased to

Safer gambling

Key financial

and strategic highlights

Aligning incentives with strategy

Plan

Measures for FY23

Strategic Pillars

Bonus

Adjusted EBIT

and ESG KPIs.

1, 2, 3, 4, 5

Long-term incentives

Earnings per share,

Relative Total Shareholder

Return and Strategic

objectives (Digital NGR,

Venues NGR, EBIT %).

1, 2, 3, 5

Aligning outcomes with the wider workforce

Executive Directors

Management

All employees

Salary

4% increase in salary

for the Chief Executive.

5% increase in

salary for the Chief

Financial Ofﬁcer.

The average increase

in salary applied in

2023 across the Group

was 5%.

The average increase

in salary applied in

2023 across the Group

was 7.5%.

Bonus

Bonus aligned to

adjusted EBIT and ESG

outcomes, with a safer

gambling underpin.

Bonus focus on

adjusted EBIT and

personal contribution

for management,

with a safer gambling

underpin.

Adjusted EBIT and

scorecard measures,

including employee

engagement and

safer gambling.

LTIP

0% vesting based

on the outcomes of the

rTSR, EPS and strategic

objectives targets.

0% vesting based

on the outcomes of

the for rTSR, EPS and

strategic objectives

targets for eligible

senior leadership.

Not applicable.

The Rank Group Plc

Annual Report 2023

126

Remuneration at a glance

2023 Outcomes

Plan

Outcome

Bonus

8.9%

of maximum awarded to the Chief Executive and Chief Financial Ofﬁcer.

Long term incentives

0% vesting of the Chief Executive award

1. Both the Chief Executive and Chief Financial Ofﬁcer have elected to accept only 50% of the proposed award, resulting in 4.5% of maximum payable.

2. The Chief Financial Ofﬁcer did not have an award to vest.

2023 Pay scenarios and outcome

Fixed pay

Annual bonus

Long-term incentives (‘LTIP’)

Chief Executive

Minimum

100%

£585

£1,501

39%

26%

£2,418

24%

35%

33%

43%

£2,993

20%

27%

53%

Target

Maximum

£620

94%

Outcome

Maximum

1,000

2,000

3,000

£000s

Minimum:

comprises the value of ﬁxed pay of base salary, allowances and value of beneﬁts.

Target:

Minimum plus assumes half of the bonus is earned and the LTIP vests at 50%.

Maximum:

Minimum plus assumes full bonus is earned and the LTIP vests in full.

Maximum with 50% share price growth:

maximum pay and the impact of an assumed 50% share price growth on the LTIP.

Chief Financial Officer

Minimum

100%

£386

£608

63%

37%

£830

47%

53%

£405

95%

Target

Maximum

Outcome

£000s

1,000

2,000

3,000

Minimum:

comprises the value of ﬁxed pay of base salary, allowances and value of beneﬁts.

Target:

Minimum plus assumes half of the bonus is earned.

Maximum:

Minimum plus assumes full bonus is earned.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

127

Introduction to

Remuneration Policy

This report sets out the Policy for

the Company, which was prepared in

accordance with the 2013 Regulations.

The Policy was approved by shareholders

at the Company’s Annual General Meeting

on 14 October 2021 receiving a 90.52%

vote in favour and took effect on that date.

The Policy has been reproduced below

for information purposes and updated to

reﬂect the passage of time, such as change

in tense and page references and the

Executive Directors’ current remuneration

packages for the purposes of the charts

illustrating the application of the Policy

in the coming year.

The Committee reviews the Group’s

overall remuneration philosophy and

structure each year to ensure that the

framework remains effective in supporting

the Group’s strategic objectives and fairly

rewards individuals for the contribution

that they make to the business, having

regard to the size and complexity of the

Group’s operations and the need to

motivate our employees. It recognises

that the performance of the Company is

dependent upon the quality of its Directors,

senior executives and employees and that

the Group therefore seeks to attract, retain

and motivate skilled Directors and senior

executives of the highest calibre. In order

to attract such individuals, the Committee

needs to ensure that the remuneration

packages properly reﬂect an individual’s

duties and responsibilities, are appropriate

and competitive (not paying more than

is necessary), sensitive to pay elsewhere

within the Group and directly linked

to performance.

As part of its review of the Remuneration

Policy, the Committee has considered the

factors set out in provision 40 of the 2018

UK Corporate Governance Code. In our

view, the Policy addresses those factors

as set out below:

Clarity

Our Policy is clearly disclosed each year

in the Annual Report and engagement

is sought from shareholders. Our Policy

is well understood by our Executive

Directors and the Committee receives

regular updates on workforce pay and

beneﬁts during the year from management.

The Committee and Board as a whole also

receive updates from the non-executive

director responsible for workforce

engagement (who is also the chair of

the Committee) to ensure transparency

and effective engagement.

Simplicity

A key objective of the Committee is to

ensure that our executive remuneration

policies and practices are easily understood

and straightforward to communicate and

operate. Our remuneration structure is

comprised of ﬁxed and variable

remuneration, with the performance

conditions for variable elements clearly

communicated to, and understood by,

participants. The move to annual awards

under the 2020 LTIP removed one of the

more previously complex elements.

Risk

The Committee is mindful of the need

to ensure that risks arising in connection

with remuneration arrangements are

identiﬁed and mitigated. Our Policy has

been designed with this in mind, to ensure

that inappropriate risk-taking is

discouraged and will not be rewarded.

It does so by means of: (i) the balanced use

of both short- and long-term incentives;

(ii) the emphasis on equity in our incentive

plans, together with deferral of part of the

annual bonus, the two-year post-vesting

Alignment with Provision 40

holding period in the 2020 LTIP and

in-employment and post-cessation

shareholding guidelines; and (iii) malus/

clawback provisions, which speciﬁcally

include reference to failure in risk

management. The Committee also has

overriding discretion to reduce awards

where outturns are not a fair and accurate

reﬂection of business performance.

Predictability

Our incentive plans are subject to

individual caps, with our share plans also

subject to market-standard dilution limits.

Please see page 132 for more information

on potential reward possibilities for

different levels of performance. Where

discretion may be exercised, this is clearly

stated in the Policy.

Proportionality

The Committee is mindful of the need

to ensure that outcomes do not reward

poor performance and the Policy enables

meaningful and appropriate targets to be

set with a signiﬁcant proportion linked to

long-term shareholder value. Discretions

available to the Committee ensure that

awards can be reduced if necessary to

ensure that outcomes represent a fair and

accurate reﬂection of business performance.

Alignment to culture

The Committee ensures that measures

used in our incentive structure are aligned

with Rank’s business strategy and values,

for example the inclusion of ESG targets

and a safer gambling measure in bonus

objectives, an underpin when considering

Executive outcomes.

The Rank Group Plc

Annual Report 2023

128

Remuneration Policy

Remuneration Policy table

The key components of Executive Directors’ remuneration

are summarised below:

Base salary and benefits

Base salary

Component and link to business strategy

To attract and retain skilled, high-calibre individuals to deliver

the Group’s strategy.

Operation

Base salaries are typically reviewed annually, with any change

normally effective from 1 April. Any increases take into account:

–

The role’s scope, responsibility and accountabilities;

–

Market positioning, including pay levels at other gaming operators;

–

General rates of increase across the Group; and

–

The performance and effectiveness of the individual

and the Group.

Performance metrics

Not applicable, although the individual’s performance will be

taken into account when determining the level of increase, if any.

Maximum opportunity

While there is no maximum annual increase, ordinarily any

increases in Executive Directors’ base salaries will be limited,

in percentage of base salary terms, to those received by the wider

workforce during the year.

Where the Committee considers it necessary or appropriate,

larger increases may be awarded in individual circumstances,

such as a change in scope or responsibility or alignment to

market levels.

For new Executive Director hires, the Committee has the

ﬂexibility to set the salary at a below-market level initially

and to realign it over the following years as the individual

gains experience in the role. In exceptional circumstances,

the Committee may agree to pay above-market levels to secure

or retain an individual who is considered by the Committee to

possess signiﬁcant and relevant experience which is critical

to the delivery of the Group’s strategy.

Insured and other benefits

Component and link to business strategy

Insured and other beneﬁts are offered to Executive Directors

as part of a competitive remuneration package.

Operation

Insured beneﬁts may comprise private healthcare insurance

for Executive Directors and dependants, life assurance and

permanent health insurance.

Other beneﬁts comprise a cash car allowance and the fuel cost

of all mileage (private and business). The amount of the cash car

allowance is reviewed periodically by the Committee in the light

of market conditions.

Other beneﬁts, in line with the provision to other employees,

may be offered as appropriate and travel and related expenses

may be reimbursed.

The Committee retains the discretion to offer relocation

assistance in the form of an allowance or otherwise to support

the movement of executive talent across the business. If provided,

the Committee aims to ensure payments are not excessive and

support business needs. As such, relocation assistance will be

reviewed on a case-by-case basis taking into account factors such

as the individual’s circumstances and the geographies involved,

meaning that there is no prescribed formula for calculating the

level or structure of payments. Tax equalisation and overseas

tax advisory fees may be payable.

Executive Directors may participate in HMRC-approved

all-employee schemes up to HMRC limits.

Performance metrics

Not applicable.

Maximum opportunity

It is anticipated that the provision of insured and other beneﬁts

will not form a signiﬁcant part of the package in ﬁnancial terms.

The cost of the beneﬁts provided may change in accordance

with market conditions or in the event of the payment of

relocation assistance.

Retirement provisions

Component and link to business strategy

Rewards sustained contribution and encourages retention

of Executive Directors.

Operation

Executive Directors are offered membership of the Rank Group

Retirement Savings Plan (the ‘Pension Plan’) or a cash allowance

of equivalent value to the employer’s contribution to the Pension

Plan. An Executive Director may be automatically enrolled in

The Rank Group NEST Workplace Pension Scheme (the ‘Pension

Scheme’) in accordance with the Company’s obligations under

the Pensions Act 2008.

Performance metrics

Not applicable.

Maximum opportunity

For all Executive Director appointments, the maximum pension

contribution (deﬁned contribution or cash allowance) will be

aligned with the majority of the wider workforce (which is currently

3% of base salary) and less the pensions lower earnings limit.

The Chief Executive’s pension allowance was aligned with the

majority of the wider workforce with effect from 1 January 2023.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

129

Annual bonus and performance shares

Annual bonus

Component and link to business strategy

Motivates the achievement of annual strategic, ﬁnancial and

personal performance. Rewards individual contribution to the

success of the Group.

Operation

Rank operates an annual bonus scheme in which Executive

Directors participate.

The bonus is based on stretching targets set annually. Bonus

payouts are determined by the Committee after the year end

following the Committee’s assessment of performance relative

to the targets set.

Any cash bonuses earned by the Executive Directors will be

subject to a six-month deferral period and will be paid in the

December following the 30 June ﬁnancial year end. Any bonus

earned by the Chief Executive above 100% of base salary, and

80% of base salary for other Executive Directors, will be deferred

into shares under the Rank Group 2020 Deferred Bonus Plan

(‘the DBP’) for a period of two years and will normally be settled

in shares, but may be settled in cash in accordance with the

rules of the DBP.

The Committee retains the discretion to override formulaic

bonus outcomes, both upward and downward, where necessary,

to take account of overall or underlying Company performance

and to allow the Committee to assess the quality of earnings over

the year. The Committee will consult with major shareholders

prior to the exercise of any upward discretion.

Recovery and withholding provisions apply up to the end of the

second ﬁnancial year following the year in respect of which the

award was granted in the event of a material misstatement, an act

of gross misconduct, an error in the assessment of performance

targets, a material ﬁnancial loss to the Group or a material

deterioration in Group proﬁts which is inconsistent with

the ﬁnancial performance of the gaming industry, serious

reputational damage, failure in risk management or

corporate failure.

Dividend equivalents may be paid in respect of a vested

DBP award (normally in shares, but may be settled in cash in

accordance with the rules of the DBP) by reference to dividends

with record dates arising during the awards vesting period.

Performance metrics

The bonus will be based at least 50% on the achievement of

ﬁnancial performance targets and may, from time to time as

considered appropriate by the Committee, include non-ﬁnancial

measures and strategic and/or personal objectives.

Performance below threshold will result in zero payment.

Up to 25% of the maximum opportunity may be payable for

achieving a threshold level of performance. A full description

of the performance measures in place and performance against

them will be provided in the annual remuneration report on

a retrospective basis, to the extent they are not considered

to be commercially sensitive.

Maximum opportunity

Chief Executive: 150% of base salary.

Other Executive Directors: 120% of base salary.

Performance shares

Long-term Incentive Plan

Component and link to business strategy

The long-term incentive plan is intended to align the interests

of the Executive Directors and shareholders through the creation

of shareholder value over the long term.

Operation

Awards are normally granted annually.

Vesting is usually on the third anniversary of the date of grant,

dependent on the achievement of stretching performance

conditions measured over a period of three ﬁnancial years and

will normally be settled in shares, but may be settled in cash

in accordance with the rules of the LTIP.

Executive Directors are required to retain vested LTIP shares,

net of tax, for a further period of two years. During this two-year

period, awards would lapse/shares would be forfeited if the

Executive Director (i) was determined to be in breach of their

service agreement or (ii) is engaged by a competitor in an

executive capacity, unless the Committee exercised its discretion

to allow the Executive Director to retain the award/shares.

The Committee retains the discretion to override formulaic

vesting outcomes, both upward and downward, where necessary,

to take account of overall or underlying Company performance.

The Committee will consult with major shareholders prior to the

exercise of any upward discretion.

Recovery and withholding provisions apply up to the third

anniversary of the awards vesting in the event of a material

misstatement, an act of gross misconduct, an error in the

assessment of performance targets, a material ﬁnancial loss

to the Group or a material deterioration in Group proﬁts which

is inconsistent with the ﬁnancial performance of the gaming

industry, serious reputational damage, failure in risk

management or corporate failure.

Performance metrics

Performance targets may relate to both ﬁnancial and non-ﬁnancial

measures linked to the Group’s long-term business strategy,

including but not limited to:

–

Group or business unit proﬁt;

–

Group or business unit revenue;

–

Return on capital; and

–

Strategic objectives of the Group.

The Committee may choose different measures and weightings

between them, if it deems it appropriate, taking into account the

strategic objectives of the Company. At least 50% of the award

will be subject to ﬁnancial targets and/or relative TSR.

For each performance metric, a threshold and stretch level

of performance is set. At threshold, no more than 25% of the

relevant element vests, rising on a straight-line basis to 100%

for performance between threshold and maximum.

At the end of the applicable performance period, the Committee

will have absolute discretion to determine the extent to which the

relevant awards will vest, if at all, taking account of underlying

Group, individual and share price performance.

Maximum opportunity

The Chief Executive may receive an annual grant of up to 200%

of base salary and other Executive Directors may receive an

annual grant of up to 150% of base salary.

The Rank Group Plc

Annual Report 2023

130

Remuneration Policy

Continued

Recovery Incentive Scheme

Component and link to business strategy

To align the interests of the Executive Directors and shareholders

through the creation of mid-term shareholder value post-

COVID-19 impact.

Operation

The RIS is a one-off plan with awards granted shortly after the

2021 Annual General Meeting.

Vesting will be:

–

50% on the ﬁrst anniversary of the date of grant; and

–

50% on the second anniversary of the date of grant,

dependent on the achievement of performance conditions

measured over the 2021/22 ﬁnancial year. Vesting will normally

be settled in shares but may be settled in cash in accordance with

the rules of the RIS.

Executive Directors are required to retain vested RIS shares,

net of tax, until the later of six months following the vesting of the

relevant award and the announcement of results for the six-month

period commencing immediately prior to the relevant vesting

date. During this holding period, awards would lapse/shares

would be forfeited if the Executive Director (i) was determined

to be in breach of their service agreement or (ii) is engaged

by a competitor in an executive capacity, unless the Committee

exercised its discretion to allow the Executive Director to retain

the award/shares.

The Committee retains the discretion to override formulaic

vesting outcomes, both upward and downward, where necessary,

to take account of overall or underlying Company performance.

The Committee will consult with major shareholders prior to

the exercise of any upward discretion.

Recovery and withholding provisions apply in the event of

a material misstatement, an act of gross misconduct, an error

in the assessment of performance targets, a material ﬁnancial

loss to the Group or a material deterioration in Group proﬁts

which is inconsistent with the ﬁnancial performance of the

gaming industry, serious reputational damage, failure in risk

management or corporate failure.

Performance metrics

Performance targets will be set by reference to:

–

net gaming revenue; and

–

proﬁts after tax, with both targets needed to be met for vesting

to occur.

At the end of the applicable performance period, the Committee

will have absolute discretion to determine the extent to which the

relevant awards will vest, if at all, taking account of underlying

Group, individual, ESG (Environmental, Social and Governance)

and share price performance.

Maximum opportunity

The Chief Executive and Chief Financial Ofﬁcer may receive a

one-off grant of up to 100% of base salary in ﬁnancial year 2021/22.

In-employment and post-employment

shareholding requirement

In-employment shareholding requirement

Component and link to business strategy

To create greater alignment between Executive Directors

and shareholders.

Operation

Subject to there being sufﬁcient free ﬂoat, Executive Directors

are required to build a shareholding of 200% of base salary

within ﬁve years of appointment. Shares subject to unvested

deferred bonus awards and vested but unexercised deferred

bonus awards, RIS and LTIP awards may be included on a

net-of-tax basis.

Performance metrics

Not applicable.

Maximum opportunity

Not applicable.

Post-employment shareholding requirement

Component and link to business strategy

To ensure continued alignment of the long-term interests

of Executive Directors and shareholders post-cessation.

Operation

Subject to there being sufﬁcient free ﬂoat, Executive Directors

are required to maintain a shareholding equivalent to the

in-employment shareholding requirement immediately prior to

departure (or the actual share- and award-holding on departure,

if lower) for two years post-cessation. Shares subject to unvested

deferred bonus awards and vested but unexercised deferred

bonus awards, LTIP and RIS awards may be included on a

net-of-tax basis.

The requirement will apply to shares vesting under deferred

bonus, LTIP and RIS awards made from 11 November 2020.

There are appropriate arrangements in place to ensure

enforceability.

Performance metrics

Not applicable.

Maximum opportunity

Not applicable.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

131

2024 Scenario Chart

Chief Executive Officer

Minimum

100%

38%

£583

£1,520

39%

26%

£2,457

24%

35%

33%

43%

£2,993

20%

27%

53%

Target

Maximum

Maximum with 50% share

price growth for LTIP

£000s

1,000

2,000

3,000

Chief Financial Officer

Minimum

100%

38%

24%

£402

£901

45%

25%

£1,401

29%

30%

32%

39%

£1,679

24%

26%

50%

Target

Maximum

Maximum with 50% share

price growth for LTIP

£000s

1,000

2,000

3,000

Fixed pay

Annual bonus

Long-term incentives

Minimum:

comprises the value of ﬁxed pay of base salary, allowances and value of beneﬁts.

Target:

Minimum plus assumes half of the bonus is earned and the LTIP vests at 50%.

Maximum:

Minimum plus assumes full bonus is earned and the LTIP vests in full.

Maximum with 50% share price growth:

maximum pay and the impact of an assumed 50% share price

growth on the LTIP.

Committee’s approach to setting

pay, performance measures

and targets

The Committee intends that the base

salary and total remuneration of Executive

Directors should be competitive against

other similar gaming peers and companies

of a broadly similar size. Remuneration is

benchmarked against rewards available

for equivalent roles in suitable comparator

companies, with the aim of paying neither

signiﬁcantly above nor below market levels

for each element of remuneration at target

performance levels.

The Committee also considers general

pay and the employment conditions of

all employees within the Group and is

sensitive to these, to prevailing market and

economic conditions and to governance

trends when assessing the level of salaries

and remuneration packages of Executive

Directors and other members of the

Executive Committee.

Committee discretion in operation

of variable pay schemes

The Committee operates under the

powers it has been delegated by the Board.

In addition, it complies with rules that are

either subject to shareholder approval

(the LTIP and the RIS) or approval from the

Board (the annual bonus scheme). These

rules provide the Committee with certain

discretions which serve to ensure that the

implementation of the Policy is fair, both

to the individual Executive Director and

to shareholders. The Committee also has

discretion to set components of

remuneration within a range, from time

to time. The extent of such discretion is

set out in the relevant rules, the maximum

opportunity or the performance metrics

section of the Policy. To ensure the

efﬁcient administration of the variable

incentive plans outlined above, the

Committee will apply certain operational

discretions. These include, but are not

limited to, the following:

–

Selecting the participants in the plans;

–

Determining the timing of grants

of awards and/or payments;

–

Determining the quantum of awards

and/or payments (within the limits

set out in the Policy);

–

Determining the choice of (and

adjustment of) performance measures

and targets for each incentive plan in

accordance with the Policy and the rules

of each plan;

–

Determining the extent of vesting based

on the assessment of performance and

discretion relating to measurement of

performance in certain events such as

a change of control or reconstruction;

–

Determining if awards need to be

cash-settled in exceptional

circumstances, such as for tax or

regulatory reasons or where there

is insufﬁcient free ﬂoat or where the

amount required to be withheld for

tax purposes is to be cash-settled;

–

Overriding formulaic annual bonus

outcomes, RIS and LTIP vesting

outcomes, taking account of overall

or underlying Company performance;

–

Whether malus and clawback shall

be applied to any award in the relevant

circumstances and, if so, the extent to

which they shall be applied;

–

Making appropriate adjustments

required in certain circumstances, for

instance for changes in capital structure;

–

Determining ‘good leaver’ status for

incentive plan purposes and applying

the appropriate treatment; and

–

Undertaking the annual review of

weighting of performance measures

and setting targets for the annual bonus

plan and LTIP award, where applicable,

from year to year.

The Committee will set targets for the

different components of performance-

related remuneration so that they are both

appropriate and sufﬁciently demanding in

the context of the business environment

and the challenges facing the Group. It

reviews and selects performance measures

at the beginning of each award cycle under

both the annual bonus plan and the LTIP,

being informed by the short- and long-term

priorities of the Group at the time.

The Committee considers the Group’s

key performance indicators and strategic

business plan when selecting measures

and calibrating targets. The Committee

is aware that targets for both ﬁnancial

and non-ﬁnancial measures should be

appropriately stretching yet achievable.

Details of these are included in the

Annual Report each year (other than

where they are considered by the Board

to be commercially sensitive in which case

they will be disclosed following vesting).

Factors that the Committee may consider

include the strategic plan, the annual

budget, economic conditions, individuals’

areas of responsibility, the Committee’s

expectations over the relevant period and

input from the majority shareholder.

The Rank Group Plc

Annual Report 2023

132

Remuneration Policy

Continued

If an event occurs which results in the

annual bonus plan, RIS or LTIP performance

conditions and/or targets being deemed

no longer appropriate (e.g. material

acquisition or divestment or an unforeseen

material change in gaming regulation

or taxation which was unforeseen at the

time the measures and targets were set),

the Committee will have the ability to adjust

appropriately the measures and/or targets

and alter weightings, provided that the

revised conditions are not materially less

challenging than the original conditions.

Any use of the above discretion would,

where relevant, be explained in the annual

report on remuneration and may, as

appropriate, be the subject of consultation

with the Company’s major shareholders.

Legacy arrangements

The Committee may approve payments

to satisfy commitments agreed prior to

the approval of this Policy. This includes

previous incentive awards that are

currently outstanding. The Committee may

also approve payments outside of the Policy

in order to satisfy legacy arrangements

made to an employee prior to (and not in

contemplation of) promotion to the Board.

All historic awards that were granted but

remain outstanding are eligible to vest,

based on their original award terms.

Differences in the Policy for

Executive Directors relative to the

broader employee population

The Policy in place for the Executive

Directors is informed by the structure

operated for the broader employee

population. Pay levels and components

vary by organisational level but the broad

themes and philosophy remain consistent

across the Group:

–

Salaries are reviewed annually with

regard to the same factors as those set

out in the Policy table for Executive

Directors;

–

Members of the Executive Committee

participate in an annual bonus plan

aligned with that offered to the Executive

Directors. Other members of senior

management participate in the same

plan, dependent on performance of the

Group and/or performance of business

division, according to their role and level;

–

Members of the senior management team

can be considered for awards under the

LTIP. These are intended to encourage

share ownership in the Company and

align the management team with the

strategic business plan; and

–

Eligibility for and provision of beneﬁts

and allowances varies by level and local

market practice. It is standard for senior

management to receive a Company car

allowance. Pension provision is overall

at lower contribution rates, with the

majority of the Group’s eligible

employees now being automatically

enrolled into the NEST Workplace

Pension Scheme with contributions

in line with legislative requirements.

The rate applicable to the Chief Executive

will be brought into line with effect from

1 January 2023. It should be noted that

a signiﬁcant proportion of employees

remain in the Group’s Retirement

Savings Plan, with contribution levels

higher than mandatorily required.

Remuneration for new appointments

The Committee will apply the Policy to

new Executive Directors in respect of all

components of remuneration. Base salary

and beneﬁts will be set in accordance with

the Policy and relocation assistance may

be provided for both internal and external

appointments, if necessary. In addition,

the maximum level of annual bonus which

may be earned is 150% of base salary for

the Chief Executive and 120% of base

salary for other Executive Directors.

New Executive Directors may participate

in the LTIP and receive an annual award of

up to 200% of base salary. The Committee

may also make an additional award of cash

or shares on the appointment of a new

Executive Director in order to compensate

for the forfeiture of remuneration from

a previous employer. Such awards would

be made to the extent practicable on a

comparable basis, taking account of

performance, the proportion of the

performance period remaining and the

type of award. The Committee will set

appropriate performance conditions and

vesting would be on broadly the same time

horizon as the forfeited award.

New Non-Executive Directors will be

appointed with the same remuneration

elements as the existing Non-Executive

Directors. It is not intended that variable

pay, day rates or beneﬁts in kind be offered.

Approach to termination

payments/leavers

The Group does not believe in reward for

failure. The circumstances of an Executive

Director’s termination (including the

Director’s performance) and an

individual’s duty to mitigate losses are

taken into account in every case. Rank’s

policy is to stop or reduce compensatory

payments to former Executive Directors to

the extent that they receive remuneration

from other employment during the

compensation period.

Compensatory payments are limited to

an amount equal to base salary, cash car

allowance, and pension contributions

(or cash allowance) payable under

applicable notice provisions (which shall

not in any event be more than an amount

equal to twelve months of such payments).

In addition, the Company may pay

reasonable outplacement and legal fees

where considered appropriate and may

provide a leaving gift and/or leaving event

for an Executive Director (including

payment of any tax thereon) where the

Committee feels it is appropriate to

do so, up to a maximum cost of £1,000.

The Company may also pay any statutory

entitlements or settle or compromise

claims in connection with a termination

of employment, where considered in the

best interests of the Company.

Annual bonus awards will normally lapse

in their entirety in the event an individual

is no longer employed or serving their

notice period at the time of payout. For

certain good leaver reasons, a bonus may

become payable at the discretion of the

Committee. Where the bonus is payable,

the Committee retains discretion as to

whether it is all payable in cash or whether

part of it is deferred either in cash or as

deferred bonus awards.

Deferred bonus awards held by leavers will

ordinarily be forfeited, except where the

participant is a ‘good leaver’ (due to death,

ill-health, injury, redundancy, business

transfer or other reasons at the discretion

of the Committee) in which case the

deferred bonus awards ordinarily vest on

the normal timetable. The Committee can

permit early vesting at its discretion.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

133

LTIP or RIS awards (each as applicable)

held by leavers (which in the case of the

RIS includes the participant being under

notice) will ordinarily be forfeited, except

where the participant is a ‘good leaver’

(due to death, ill-health, injury,

redundancy, business transfer or other

reasons at the discretion of the Committee),

in which case their LTIP or RIS award

will ordinarily vest on normal timetable.

The extent to which an LTIP or RIS award

will vest in these situations will depend

upon two factors: (i) the extent to which

the performance conditions (if any) have,

in the opinion of the Committee, been

satisﬁed over the original performance

measurement period; and (ii) pro-rating

Provision

Detailed terms

Remuneration

–

Base salary

– Pension

–

Cash car allowance

–

Private health insurance for Director and dependants

–

Life assurance

–

Permanent health insurance

–

Participation in annual bonus plan, subject to plan rules

–

Participation in other incentive plans, subject to plan rules

–

25 days’ paid annual leave, increasing to 30 days with length of service

Notice period

Six months’ notice from both the Company and the Director

Termination payment

Payment in lieu of notice equal to:

–

Six months’ base salary

–

Cash car allowance

–

Pension supplement

–

All of the above would be paid in monthly instalments, subject to an obligation on the part of the

Director to mitigate his/her loss such that payments would either reduce, or cease completely,

in the event that the Director gained new employment

Restrictive covenants

During employment and for six months after leaving

Copies of the Executive Directors’ service contracts are available for inspection at the Company’s registered ofﬁce.

Service agreements outline the components of remuneration paid to the individual Executive Director but do not prescribe how

remuneration levels may be adjusted from year to year.

Length of service (as at 30 June 2023) for Executive Directors who served on the Board during the year, together with the date of their

respective service agreements, is as follows:

Position

Name

Date of contract/Commencement date

Length of Board service

Chief Executive

John O’Reilly

30 April 2018/

7 May 2018

5 years 2 months

Chief Financial Ofﬁcer

Richard Harris

20 December 2021/

1 May 2022

1 year 2 months

of the award to reﬂect the proportion of

the normal vesting period spent in service.

The Committee can decide to pro-rate an

LTIP or RIS award to a lesser extent

(including as to nil) if it regards it as

appropriate to do so in the circumstances.

In addition, awards/shares will ordinarily

be forfeited during the approximately

six-month holding period for the RIS

awards and the two-year holding period for

the LTIP awards if the Executive Director

(i) was determined to be in breach of their

service agreement or (ii) is engaged by a

competitor in an executive capacity, unless

the Committee exercised its discretion

to allow the Executive Director to retain

the award/shares.

Change of control

In the event of a change of control, the

Committee has absolute discretion as to

whether and on what basis awards should

vest under the LTIP and/or the RIS. The

Committee would normally allow awards

to vest upon a change of control subject

to satisfaction of performance criteria and

reduction on a time-apportioned basis.

Policy for Executive Directors’

service agreements

It is the Group’s policy that Executive

Directors have rolling service agreements.

The Rank Group Plc

Annual Report 2023

134

Remuneration Policy

Continued

Policy for Non-Executive Directors (including Chair)

Component

Purpose and link

to business strategy

Mechanics operation and

performance framework

Maximum

Fees

To attract and retain skilled,

high-calibre individuals to

approve and challenge the

Group’s strategy.

Fees are reviewed in the ﬁrst

quarter of each calendar year

to reﬂect appropriate market

conditions.

Fee increases, if applicable,

are effective from 1 April

(unless otherwise agreed).

The base fee includes

membership of all Board

Committees. Non-Executive

Directors are not entitled to

any beneﬁts in kind and are

not eligible for pension

scheme membership, bonus

or incentive arrangements.

Aggregate annual fees

limited to £750,000 by the

Company’s Articles of

Association.

Current fee levels are set out

in the annual report

on remuneration.

All Non-Executive Directors have letters of engagement setting out their duties and the time commitment expected. They are

appointed for an initial period of three years, after which the appointment is renewable by mutual consent at intervals of not more than

three years. Non-Executive Directors’ appointments are terminable without compensation. The Chair’s appointment is terminable on

three months’ notice.

In accordance with the Corporate Governance Code 2018, all Directors offer themselves for annual re-election by shareholders.

The date of appointment of each Non-Executive Director who served during the year is set out in the table below.

Non-Executive Director

Original date of

appointment to Board

Date of letter of engagement

Total length of service

Lucinda Charles-Jones

22 June 2022

1 year

Chew Seong Aun

10 December 2020

9 December 2020

2 years 6 months

Steven Esom

1 March 2016

24 February 2016

7 years 9 months

Katie McAlister

28 April 2021

26 April 2021

2 years 2 months

Alex Thursby

1 August 2017

21 August 2019

5 years 11 months

Karen Whitworth

4 November 2019

3 years 7 months

Alex Thursby has a letter of engagement dated 21 August 2019, which is effective from 17 October 2019 and replaced his original non-executive letter

of engagement dated 21 June 2017.

Steven Esom stepped down from the Board on 31 December 2022.

External appointments

The Committee recognises that Executive

Directors may be invited to become

non-executive directors in other companies

and that these appointments can enhance

their knowledge and experience to the

beneﬁt of the Company. Subject to

pre-agreed conditions, and with the prior

approval of the Board, each Executive

Director is permitted to accept one

appointment as a non-executive director

in another listed company. The Executive

Director is permitted to retain any fees

paid for such service.

Shareholder engagement

In designing the Policy, the Chair wrote

to the Company’s major shareholders,

ISS, Glass Lewis and the Investment

Association and the Committee took

shareholders’ feedback into account

when ﬁnalising the Policy. The Committee

informs major shareholders in advance

of any material changes to the way that

the Policy is implemented and will offer

a meeting to discuss these details, as

appropriate and/or required.

Statement of consideration of

employment conditions elsewhere

in the Group

As described in the notes to the Policy

table on page 132, the overarching themes

of the Policy in place for Executive

Directors are broadly consistent with

those applied to the wider employee

population. The Committee is informed of

pay and conditions in the wider employee

population and takes this into account

when setting senior executive pay.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

135

Annual Report on Remuneration

The Directors’ Remuneration Report has been prepared on behalf of the Board by the Committee, under the chair-ship of Lucinda

Charles-Jones.

The Committee has applied the principles of good governance set out in the FRC’s 2018 UK Corporate Governance Code and,

in preparing this report, has complied with the requirements of the 2013, 2018 and 2019 Regulations.

The Company’s external auditor is required to report to shareholders on the audited information contained in this report and to state

whether, in its opinion, it has been prepared in accordance with the 2013 Regulations.

Executive Directors’ single remuneration figure (Audited)

The table below presents a single remuneration ﬁgure for each Executive Director determined in accordance with the 2013

Regulations for the years ended 30 June 2023 and 30 June 2022 in respect of performance during the years ended on those dates.

Both tables also include pro forma ﬁgures for the Chief Executive to reﬂect the vesting schedule of the 2017/18 LTIP, please see footnotes

to the tables for further information:

2022/23

Fixed pay (£)

Performance pay (£)

2022/23 total

remuneration

(£)

Salary/fees

Beneﬁts

Pension

Total ﬁxed

Cash bonus

Deferred

bonus

LTIP award

vesting

Total

variable

John O’Reilly

520,150

31,337

33,224

584,711

35,777

620,488

John O’Reilly (pro forma)

520,150

31,337

33,224

584,711

35,777

29,695

65,472

650,183

Richard Harris

357,250

18,069

10,530

385,849

19,772

405,621

Taxable beneﬁts comprise car allowance, fuel beneﬁt (other than for Richard Harris), and life, long-term disability and private medical insurances.

Unaudited note: The performance period for the 2017/18 block award ended on 30 June 2021. The performance was assessed as at 30 June 2021 and full details

of the assessment can be found on pages 124 and 125 of our 2021 Annual Report and Accounts. The award vests, subject to continued employment, in three equal

tranches from 1 October 2021. The second tranche of the award vested on 1 October 2022 and was included in last year’s Report on a pro forma basis and in the table.

The pro forma ﬁgure shown is the third tranche and ﬁnal tranche of the 2018 block award of 32,419 shares which will vest 1 October 2023, stated using the average

share price of 91.6p for the three months to 30 June 2023. This will be reinstated next year using the actual share price when award vests.

Richard Harris received 93,318 shares on 13 May 2023 as a result of vesting of the ﬁrst tranche of his award in lieu of shares forfeited from his previous employer.

There was no gain in value since the award date.

2021/22

Fixed pay (£)

Performance pay (£)

2021/22 total

remuneration

(£)

Salary/fees

Beneﬁts

Pension

Total ﬁxed

Cash bonus

Deferred

bonus

LTIP award

vesting

Total

variable

John O’Reilly

503,750

31,259

49,751

584,760

John O’Reilly (pro forma)

503,750

31,259

49,751

584,760

22,693

607,453

Bill Floydd

175,000

11,845

17,188

204,033

Richard Harris

58,833

3,129

1,734

63,696

212,862

276,558

Taxable beneﬁts comprise car allowance, fuel beneﬁt (other than for Richard Harris), and life, long-term disability and private medical insurances.

Unaudited note: The 2017/18 LTIP award was a ‘block award’ with vesting in three equal tranches subject to continued employment. Based on the actual share

price applicable at vesting of the second tranche of the award of 70p for the Chief Executive the value of that ﬁrst tranche was £22,693 for the Chief Executive

(32,419 shares) which would have resulted in total remuneration (restated on a pro forma basis) of £607,453 for the Chief Executive as stated in the above table.

Bill Floydd stepped down from the Board on 31 December 2021. The second tranche and third tranche of his 2017/18 block award lapsed in full on departure.

Richard Harris was appointed to the Board on 1 May 2022.

Richard Harris received buyout awards comprising a cash award of £12,862 in June 2022 in lieu of a bonus forfeited and a share award of £200,000 in May 2022

in lieu of share awards forfeited from his previous employer.

The Rank Group Plc

Annual Report 2023

136

Annual Report on Remuneration

Base salary (Audited)

The Committee reviewed the Executive Director base salaries during the year. During the year under review, the Committee

determined to increase John O’Reilly’s salary by 4% with effect from 1 April 2023, below the general overall increases awarded

to the wider workforce.

Richard Harris’s salary was increased by 5% with effect from 1 April 2023 to reﬂect the position of his salary against the market which

is in line with the increases to the management team, and below general increases to the wider workforce.

30 June 2023

1 April 2023

1 April 2022

% change

John O’Reilly

£535,600

£515,000

Richard Harris

£370,000

£353,000

Taxable benefits (Audited)

Taxable beneﬁts comprise car allowance, fuel beneﬁt (other than for Richard Harris), and life, long-term disability and private

medical insurances.

Other than related premiums, no changes were made to beneﬁts during the year.

Pension (Audited)

John O’Reilly’s payments in lieu of pension was reduced from 10% of salary (less the lower earnings limit) (such 10% having

been agreed under his service agreement when he joined Rank) to the rate currently available to the majority of the UK employees

(currently 3% less the lower earnings limit) with effect from 1 January 2023.

Richard Harris’s payments in lieu of pension was agreed at the rate currently available to the majority of the UK employees when

he joined the Company in May 2022, of 3% of salary (less the lower earnings limit).

Annual bonus plan (Audited)

The maximum annual bonus opportunity for the Executive Directors in 2022/23 was 150% and 120% for the CEO and CFO

respectively. Target bonus was 50% of the maximum opportunity. The 2022/23 annual bonus was based on adjusted Group earnings

before interest and tax (adj. EBIT) and an Environmental, Social and Governance (ESG) measure.

The table below shows the outcome for each measure:

Performance targets

Measure

Weighting

Threshold

Target

Maximum

Actual performance

Bonus outcome1

(% of Max)

Adj. EBIT

85%

£61.75m

£64.0m

£68.25m

£19.1m

ESG measures

15%

Committee assessment

59% of maximum

8.9%

Total

8.9%

Bonus payout on a straight-line basis between threshold to target and target to maximum.

The 15% of the maximum bonus opportunity was based on speciﬁc Environmental, Social and Governance (ESG) targets. As the Company’s approach to ESG

is developing, for 2022/23 a mix of quantative and qualitative approach applied. The Committee determined that a bonus equivalent to 59% of the maximum bonus

for the ESG measure was payable considering the improvement across four ESG key performance indicators:

– An increase in the employee engagement net promoter score (NPS) from +2 to +14 versus a target range of +8 to +10.

– Progress against the delivery of a net zero emissions plan.

– An increase in the Employee NPS score on Rank’s approach to Safer Gambling from +46 to +53 versus a target range of +50 to +55.

– Progress in the delivery of a consistent customer feedback measurement mechanic for Safer Gambling across the Group.

Full details of our approach to ESG can be found on pages 52 to 71.

Performance against the measures above would result in a bonus for the Executive Directors as follows:

Maximum

opportunity

(% of salary)

Maximum

opportunity

(£)

% of

maximum

payable

Total bonus

John O’Reilly

150%

£ 803,400

8.9%

£71,553

Richard Harris

120%

£ 444,000

8.9%

£39,544

An underpin is in place of a safer gambling assessment which could negatively impact the size of any bonus award based upon

weaknesses in control systems, lack of progress against key initiatives in the year or as a consequence of enforcement action

by the Gambling Commission.

Prior to approving the 2022/23 bonus outcome, the Committee discussed whether or not the outcome to be fair and reasonable in the

context of the Company’s overall business performance, relativity to bonuses across the Group and Safer Gambling assessment over

the year. Following discussion, it was satisﬁed that the bonus was appropriate.

Both John O’Reilly and Richard Harris have elected to accept only 50% of the proposed award, resulting in a bonus payable of £35,777

to John O’Reilly and £19,772 to Richard Harris.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

137

Long-term incentives and outcomes (Audited)

There are currently two different long-term incentive schemes in place for the Executive Directors and other senior management,

namely the legacy four-year block award granted in 2017/18 and awards granted annually under the 2020 long-term incentive plan.

2017/18 LTIP (block award)

As reported last year, a single LTIP award was granted on 28 June 2018 to John O’Reilly based on performance over a four-year period

ending 30 June 2021. The award made covered four years of annual grants. The performance of the award was assessed as at 30 June

2021. Full details of the performance assessment and vesting outcome can be found on pages 124 and 125 of our 2021 Annual Report

and Accounts. The award vests in three equal tranches starting 1 October 2021. The second tranche of 32,419 vested on 1 October 2022

and the third tranche of 32,418 will vest on 1 October 2023, in each case subject to continued employment.

2020 LTIP award

The table below summarises the performance relative to the 2020 LTIP targets awarded on 16 December 2020 and the outcome for the

Chief Executive:

Performance targets

Measure

Weighting

Threshold

Maximum

Outcome

% of award vesting

Relative Total Shareholder Return1

40%

Median

Outperform

median by 25%

Below median

Earnings per share

30%

13.5p

23.1p

-20.4p

Strategic measures

30%

Group EBIT Margin %

10%

14%

18%

Venues Net Gaming Revenue £m

10%

620

662

479

Digital Net Gaming Revenue £m

10%

225

338

203

Vesting based on performance

Share price underpin

240p

91.6p

Total

The Relative TSR is measured against a comparator group of six companies (888, Flutter Entertainment, Entain (formerly known as GVC), Betsson, Kindred

and Playtech).

Based on an average adjusted close price over a three-month period ending on the last day of the performance period.

In addition, the share price underpin was not achieved, therefore the award will lapse in full:

Number of

shares awarded

% vesting

Number of

shares vesting

John O’Reilly

715,922

nil

2022/23 LTIP granted during the year (annual award)

An LTIP award was granted on 29 September 2022 to John O’Reilly and Richard Harris, based on performance over a three-year

period ending 30 June 2025. The performance measures and targets for such award were set by the Committee in August 2022,

prior to the grant.

Director

John O’Reilly (Chief Executive)

Plan

2020 LTIP

Date of grant

29 September 2022

Face value at grant (% of salary)

200%

Face value at grant (£)

£1,030,000

Share price at grant

75.64p

Number of shares comprised in award

1,361,713

Performance period

1 July 2022 to 30 June 2025

Earliest vest date

29 September 2025

Director

Richard Harris (Chief Financial Ofﬁcer)

Plan

2020 LTIP

Date of grant

29 September 2022

Face value at grant (% of salary)

150%

Face value at grant (£)

£529,600

Share price at grant

75.64p

Number of shares comprised in award

700,026

Performance period

1 July 2022 to 30 June 2025

Earliest vest date

29 September 2025

The Rank Group Plc

Annual Report 2023

138

Annual Report on Remuneration

Continued

Vesting of the award is conditional based on the following performance measures:

–

40% of the award vests by reference to relative total shareholder return (‘rTSR’), measured against a comparator group consisting

of six companies; 888, Flutter Entertainment, Entain, Betsson, Kindred and Playtech.

–

30% vests by reference to underlying earnings per share growth.

–

30% vests by reference to strategic measures.

Straight-line vesting applies for all metrics between threshold and stretch. The level of vesting agreed by the Committee will take into

consideration any current or impending safer gambling sanction and Rank’s suitability to operate.

The strategic targets are deemed commercially sensitive and will be disclosed at the time of vesting.

Weighting

Threshold target

Stretch target

Threshold vesting

(% of max)

TSR

40%

Median

Outperform

median by 25%

10%

Underlying EPS

30%

11.8p

18.3p

7.5%

Strategic Measures

10%

Group adj. EBIT Margin (%)

2.5%

10%

Digital NGR (£m)

2.5%

10%

Venues NGR (£m)

2.5%

Total

100%

25%

Replacement award to Richard Harris at recruitment

Richard Harris was appointed as Chief Financial Ofﬁcer and to the Board on 1 May 2022. His remuneration package was approved by

the Committee and in line with the Policy. It included an award over 186,636 shares on 6 May 2022, to replace awards granted by his

previous employer which were forfeited on joining the Company. Such award was granted outside the Company’s LTIP but, save as

expressly stated otherwise in the deed of grant for such award, is subject to the rules of the LTIP. It was made in accordance with the

exemption contained in Rule 9.4.2(2) of the UK Listing Rules and the Policy.

Vesting is subject to continued employment but not subject to any performance conditions and is in two equal tranches, with the

vesting date for each such tranche being 13 May 2023 and 16 March 2024 respectively.

Richard Harris’s ﬁrst tranche of 93,318 shares vested on 13 May 2023, with a value of £94,874.97.

Non-Executive Directors’ single remuneration figure

The table below presents a single remuneration ﬁgure for each Non-Executive Director determined in accordance with the 2013

Regulations for the years ended 30 June 2023 and 30 June 2022 in respect of performance during the years ended on those dates.

2022/23

fees

2021/22

fees

Chew Seong Aun

nil

Lucinda Charles-Jones

53,750

1,346

Steven Esom

28,750

57,500

Katie McAlister

53,500

51,458

Alex Thursby

160,000

Karen Whitworth

61,500

60,141

Chew Seong Aun does not receive any payment for his role as a Non-Executive Director.

Lucinda Charles-Jones was appointed to the Board on 22 June 2022 and appointed as Chair of Remuneration Committee on 1 January 2023.

Steven Esom stepped down from the Board on 31 December 2022.

Non-Executive Directors are entitled to receive fees and reasonable expenses only. Details of fees received are provided on page 147.

These amounts are within the maximum annual aggregate amount of £750,000 currently permitted by the Company’s Articles

of Association.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

139

Historic Chief Executive pay and total shareholder return chart (unaudited)

The tables below show former and current Chief Executive total remuneration over the last ten years and their achieved annual

variable and long-term incentive pay awards as a percentage of the plan maximum. As with the single remuneration ﬁgure table above,

the ﬁrst table includes full vesting of the 2017/18 LTIP in 2020/21 (notwithstanding that it is only accessible to the Chief Executive in

accordance with a three-year vesting schedule) and we have also included pro forma ﬁgures in the table which reﬂect the actual vesting

in tranches – please see footnotes to the table for further information). The same approach has been taken in the second table below in

respect of the former chief executive and the vesting of the 2014/15 LTIP:

John O’Reilly (from 7 May 2018)

Single ﬁgure

of total

remuneration¹

Annual cash

bonus: actual

payout vs.

maximum

opportunity

LTIP vesting

rates against

maximum

opportunity

2022/23

(12 months)

620,488

4.5%

2022/23 (pro forma)³

(12 months)

650,183

4.5%

2.0%

2021/22

(12 months)

584,760

2021/22 (pro forma)³

(12 months)

607,453

2.0%

2020/21

(12 months)

743,329

6.1%

2020/21 (pro forma)³

(12 months)

621,628

2.0%

2019/20

(12 months)

552,238

n/a

2018/19

(12 months)

580,328

n/a

Along with the other Executive and Non-Executive Directors, John O’Reilly volunteered a 20% reduction in salary with effect from 1 April 2020 until 15 August

2020. His contracted salary continued to be used for the purposes of insured beneﬁts.

The ﬁgure has been restated in this table to include the actual value of the ﬁrst tranche at vesting on 1 October 2021 and two-thirds of the full value of the 2017/18

block award LTIP vesting by reference to 30 June 2021.

Unaudited note: The 2017/18 LTIP award was a ‘block award’ with vesting in three equal tranches in October 2021, October 2022 and October 2023, subject

to continued employment and a post-vesting holding period. Pro forma ﬁgures have been included in the table to reﬂect the actual vesting in tranches.

Unaudited note: The ﬁgure includes the third tranche of the 2018 block award vesting on 1 October 2023, subject to continued employment, using the average share

price to 30 June 2023.

Unaudited note: The ﬁgure includes the second tranche of the 2017/18 block award LTIP vesting on 1 October 2022, restated to use the actual share price applicable

at vesting of 70p.

Unaudited note: The ﬁgure includes the ﬁrst tranche of the 2017/18 block award LTIP vesting on 1 October 2021, subject to continued employment, using the actual

share price applicable at vesting of 176.8p.

Henry Birch (from 6 May 2014 until 7 May 2018)

Single ﬁgure

of total

remuneration¹

Annual cash

bonus: actual

payout vs.

maximum

opportunity

LTIP vesting

rates against

maximum

opportunity

2017/18

(10 months)

£487,006

0.00%

n/a

2016/17

(12 months)

£2,054,662

63.15%

37.50%

2016/17 (pro forma)¹

(12 months)

£1,275,650

63.15%

12.5%

2015/16

(12 months)

£932,639

80.00%

n/a

2014/15

(12 months)

£916,010

87.20%

n/a

2013/14

(2 months)

£81,850

0.00%

n/a

1. Unaudited note: The pro forma disclosure sets out the single ﬁgure if only one-third of the 2014/15 LTIP block award is included.

Ian Burke (until 16 May 2014)

Single ﬁgure

of total

remuneration¹

Annual cash

bonus: actual

payout vs.

maximum

opportunity

LTIP vesting

rates against

maximum

opportunity

2013/14

(10.5 months)

£663,804

0.00%

2012/13

(12 months)

£1,267,489

0.00%

96.25%

2011/12

(18 months)

£3,254,000

40.00%

100.00%

This included an exceptional discretionary bonus equal to 100% of base salary to reward exceptional efforts of the then Chief Executive in creating additional

sustainable long-term shareholder value via the transformation of the Company’s balance sheet, that was paid by three equal instalments in September 2012,

April 2013 and December 2013.

The Rank Group Plc

Annual Report 2023

140

Annual Report on Remuneration

Continued

Total shareholder return

(Source: Datastream)

250

200

30/06/2013

30/06/2014

30/06/2015

30/06/2016

30/06/2017

30/06/2018

30/06/2019

30/06/2020

30/06/2021

30/06/2022

30/06/2023

150

100

Value (£) (rebased)

The Rank Group Plc

FTSE 250 (excluding investment trusts)

This graph shows the value, by 30 June 2023, of £100 invested in The Rank Group Plc on 30 June 2013, compared with the value of £100 invested in the FTSE 250

excluding Investment Trusts on the same date.

Leaving arrangements (Audited)

Steven Esom stepped down from the Board on 31 December 2022. He did not receive any payment in lieu of notice or any payment

for loss of ofﬁce in accordance with the Policy.

Executive Director external appointments (Unaudited)

John O’Reilly is a non-executive director of Weatherbys Limited and a member of the board of trustees of the prisoner befriending

charity New Bridge Foundation.

Share ownership guidelines and Directors’ interests in shares (Audited)

Increased share ownership guidelines of 200% of salary for all Executive Directors were approved at the 2018 General Meeting,

subject to there being sufﬁcient free ﬂoat. Executive Directors have ﬁve years to build up shareholdings.

Shareholdings of Directors of the Company and its subsidiaries are not considered to be in public hands for the purposes of

determining the sufﬁciency of the percentage of shares in public hands (the ‘free ﬂoat’) in the context of qualiﬁcation for a listing on

the UK premium market. Up until December 2021, the free ﬂoat requirement was 25% and, in view of the low level of the Company’s

free ﬂoat following the completion of Guoco Group Limited’s general offer for Rank in July 2011, the shareholding guidelines for

Executive Directors were suspended. The suspension was lifted on 2 March 2015 when free ﬂoat was comfortably in excess of 25% but

the guidelines were re-suspended on 22 June 2016. Following amendment to the UK Listing Rules on 3 December 2021 so as to reduce

the free ﬂoat requirement level to 10%, the Committee determined to lift the suspension and re-apply the share ownership guidelines

with effect from 1 July 2022.

Directors’ shareholdings and details of unvested share awards as at 30 June 2022 and 30 June 2023 are set out in the table below.

All awards were made as conditional awards:

Ordinary

shares as at

30 June 2022

Ordinary

shares as at

30 June 2023

Unvested share

awards subject

to performance

conditions as at

30 June 2022

Unvested share

awards subject

to continued

employment

only as at

30 June 2022

Unvested share

awards subject

to performance

conditions as at

30 June 2023

Unvested share

awards subject

to continued

employment

only as at

30 June 2023

Lucinda Charles-Jones

20,000

n/a

Chew Seong Aun

n/a

Steven Esom

90,000

n/a

Katie McAlister

n/a

Alex Thursby

25,000

68,000

n/a

Karen Whitworth

20,000

n/a

Richard Harris

n/a

124,459

n/a

700,026

93,313

John O’Reilly

319,899

336,677

1,362,832

2,659,707

32,418

Position as at 31 December 2022 when Steven Esom stepped down from the Board.

John O’Reilly and Richard Harris are subject to shareholding guidelines of 200% of salary in shares held. As at 30 June 2023, based

on an average share price of 91.6p for the three months prior to the 30 June 2023, John O’Reilly holds shares equivalent to 58% of salary

and Richard Harris holds shares equivalent to 31% of salary.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

141

Dilution limits (Unaudited)

The DBP, LTIP and RIS, being the Company’s only equity-based incentive plans at present, incorporate the current Investment

Association guidelines on headroom which provide that overall dilution under all plans should not exceed 10% over a ten-year period

in relation to the Company’s issued share capital, with a further limitation of 5% in any ten-year period for executive plans. The award

made to Richard Harris on 6 May 2022 was granted outside of the Company’s LTIP (as allowed for in Rule 9.4.2(2) of the UK Listing

Rules) and will be satisﬁed by market-purchased shares.

The Committee monitors the position and prior to the making of any award considers the effect of potential vesting of awards to ensure

that the Company remains within these limits. Any awards which are required to be satisﬁed by market-purchased shares are excluded

from the calculations. No treasury shares were held or utilised in the year ended 30 June 2023.

The current level of dilution, based on the maximum number of shares that could vest as at 30 June 2023, and on the basis that no

shares under the Company’s current equity-based incentive plans are currently required to be satisﬁed by market-purchased shares

(it being noted that the Committee has not yet made a decision in relation to the same although the current expectation is that awards

would be satisﬁed with market-purchased shares) is set out below:

Total awards under

discretionary schemes as at

30 June 2023

Percentage of issued

share capital as at

30 June 2023

Maximum number of shares needed to satisfy existing

unvested awards as at 30 June 2023

5,354,244

1.14%

Total number of shares issued in respect of awards

granted after 30 June 2013

Nil

Total

5,354,244

1.14%

Relative importance of spend on pay (Unaudited)

The table below shows the expenditure and percentage change in overall spend on employee remuneration and distributions paid

to shareholders through the dividend paid and share buybacks in the year (and previous year).

2022/23

2021/22

Percentage change

Overall expenditure on pay

£206.9m

£189.9m

8.95%

Dividend paid in the year

nil

n/a

Share buyback

nil

n/a

The Rank Group Plc

Annual Report 2023

142

Annual Report on Remuneration

Continued

Statement of change in pay of all Directors compared with other employees (Unaudited)

The table below sets out the percentage change in each Director’s base salary/fee, beneﬁts and annual bonus amounts for the year

ended 30 June 2023 versus previous year, alongside the average change in gross earnings for all UK employees across the Group.

The ‘salary’ and ‘beneﬁts’ column reﬂects that the Directors volunteered a reduction in their respective salary/fee for the period

from 1 April 2020 until 15 August 2020, with the majority of such reduction applying to the 2019/20 ﬁnancial year versus the

2020/21 ﬁnancial year (please see footnotes to the table for further information):

Directors

Year¹

Salary²

Beneﬁts²

Bonus

Chief Executive

2022/23 vs 2021/22

3.3%

0.2%

n/a

2021/22 vs 2020/21

3.5%

4.2%

n/a

2020/21 vs 2019/20

2.4%

-1.8%

n/a

2019/20 vs 2018/19

-5.0%

-3.8%

n/a

Chief Financial Ofﬁcer

2022/23 vs 2021/23

52.8%

20.7%

53.7%

2021/22 vs 2020/21

-21.4%

-31.0%

n/a

2020/21 vs 2019/20

4.4%

11.9%

n/a

2019/20 vs 2018/19

470.0%

496.6%

n/a

Lucinda Charles-Jones

2022/23 vs 2021/22

3,893%

n/a

2021/22 vs 2020/21

n/a

Steven Esom

2022/23 vs 2021/22

-50.0%

n/a

2021/22 vs 2020/21

2.7%

n/a

2020/21 vs 2019/20

2.5%

n/a

2019/20 vs 2018/19

-5.0%

n/a

Katie McAlister

2022/23 vs 2021/22

4.0%

n/a

2021/22 vs 2020/21

477.5%

n/a

2020/21 vs 2019/20

n/a

2019/20 vs 2018/19

n/a

Alex Thursby

2022/23 vs 2021/22

n/a

2021/22 vs 2020/21

2.8%

n/a

2020/21 vs 2019/20

27.2%

n/a

2019/20 vs 2018/19

107.8%

n/a

Karen Whitworth

2022/23 vs 2021/22

2.3%

n/a

2021/22 vs 2020/21

4.7%

n/a

2020/21 vs 2019/20

61.7%

n/a

2019/20 vs 2018/19

n/a

Chew Seong Aun

2022/23 vs 2021/22

n/a

2021/22 vs 2020/21

n/a

2020/21 vs 2019/20

n/a

2019/20 vs 2018/19

n/a

Average employees

2022/23 vs 2021/22

9.7%

9.6%

491%

2021/22 vs 2020/21

8.6%

9.3%

-44.0%

2020/21 vs 2019/20

7.4%

-7.7%

1.6%

Excludes any Non-Executive Directors appointed during 2022/23.

The Executive and Non-Executive Directors volunteered a 20% reduction in salary with effect from 1 April 2020 until 15 August 2020. The table above reﬂects such

voluntary reduction. Contracted salaries continued to be used for the purposes of insured beneﬁts.

The ﬁgures for the Chief Financial Ofﬁcer are the sums of salaries, beneﬁts and bonuses received by the former and current CFOs.

4. Lucinda Charles-Jones was appointed as Chair of the Remuneration Committee on 1 January 2023.

Steven Esom resigned from the Board on 31 December 2022.

Chew Seong Aun does not receive any fees in respect of his role on the Board.

Calculated on basis of all UK employees, including the Chief Executive, which was determined to provide the most meaningful comparison, as no employees are

employed by The Rank Group Plc. For 2018/19, individual compensation elements are not readily available to compare separately as previously disclosed on page

123 of the 2020 Annual Report and Accounts.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

143

CEO pay ratio (Unaudited)

The Committee considered the appropriate calculation approaches for the CEO pay ratio as set out in the 2013 Regulations.

Consistent with the approach taken since 2021, for this year it has chosen Option C, as it believes this to be the most appropriate due

to the challenges of calculating full-time-equivalent pay for UK employees. Option C enables the Company to use data other than, or in

addition to, gender pay gap information to identify the three UK employees as the best equivalents of the 25th, 50th and 75th percentiles.

Having identiﬁed these colleagues based on pay and beneﬁts as at 5 April 2023, the total remuneration is calculated on a similar basis

as the Chief Executive single total ﬁgure of remuneration. This requires:

–

Starting with colleague pay that was calculated based on actual base pay, beneﬁts, allowances, bonus and long-term incentives

for the 12 monthly and 13 four-weekly payrolls within the full ﬁnancial year. Earnings for part-time colleagues are annualised

on a full-time-equivalent basis to allow equal comparisons;

–

Adding in the employer pension contribution;

–

Future years’ ratios will be disclosed building incrementally to show the ratios over a ten-year period; and

–

To ensure the data accurately reﬂects individuals at each quartile, the single ﬁgure values for individuals immediately above

and below the identiﬁed employee at each quartile were also reviewed.

The table below shows the ratio of Chief Executive pay in 2022/23, using the single total ﬁgure remuneration as disclosed on page 136

to the comparable, indicative, full-time-equivalent total reward of those colleagues whose pay is ranked at the 25th, 50th and 75th

percentiles in our UK workforce.

Year

25th

percentile ratio

50th

percentile ratio

75th

percentile ratio

2023 ﬁgures

(Option C)

28:1

26:1

21:1

2023 ﬁgures (pro forma)

1,4

(Option C)

29:1

28:1

22:1

2022 ﬁgures

(Option C)

30:1

28:1

23:1

2022 ﬁgures (pro forma)

1,2

(Option C)

32:1

29:1

25:1

2021 ﬁgures¹

(Option C)

39:1

38:1

30:1

2021 ﬁgures (pro forma)

1,3

(Option C)

34:1

32:1

25:1

2022/23 Salary

2022/23 Total

pay and beneﬁts

CEO

£520,150

£620,488

25th percentile

£22,152

£22,204

50th percentile

£23,192

£23,942

75th percentile

£28,912

£29,847

The 2013 Regulations require the full value of the 2017/18 LTIP Block award to be included in the 2021 ﬁgures. The 2021 and 2022 ﬁgures have been restated

to include the actual value of the ﬁrst and second tranche at vesting and one-third of the full value of the 2017/18 block LTIP vesting by reference to 30 June 2021.

The 2021 pro forma ﬁgures have been restated to reﬂect the actual vesting value of the ﬁrst tranche of the 2017/18 block award on 1 October 2021.

The 2022 pro forma ﬁgures have been restated to reﬂect the actual vesting value of the second tranche of the 2017/18 block award on 1 October 2022.

The 2023 pro forma ﬁgures includes the vesting of the third tranche of the 2017/18 block award on 1 October 2023, based on an average share price three months

to 30 June 2023.

Gender pay gap (Unaudited)

The Committee reviewed and approved Rank’s Gender Pay Gap Report, which can be found at www.rank.com. The report, in line with

regulations provides gender pay gap calculations as at 5 April 2022.

The published results show across all UK-based employees, our median Gender Pay Gap for April 2022 is 11.6%. This is a decrease of

18.3% year-on-year. However, the Committee does not believe the results for the year on year comparison are truly representative of

the situation, with 93% of colleagues being furloughed in April 2021 and excluded from the calculation on a year-on-year comparison.

Our mean Gender Pay Gap also reduced, from 30.3% to 23.5%, a change of 6.8%.

Our median Gender Bonus Gap analysis has seen a decrease of 60.8% year on year. This has been inﬂuenced by a combination of lower

overall payout of annual bonuses and the introduction of new, smaller value initiatives run across our venues. The greater number of

payments has resulted in a (55.6)% bonus gap at median as women earned more through these initiatives than men. The mean Gender

Bonus Gap increased to 61.8%, a change of 42% which was inﬂuenced by a small number of bonus payments made to leaders, of which

a higher proportion are male.

The Committee remains committed to doing everything that it can to reduce any gender pay and bonus gaps and address the balance

of men and women employed in roles across the various job levels within the Group.

The Rank Group Plc

Annual Report 2023

144

Annual Report on Remuneration

Continued

Committee activity during the year (Unaudited)

Matters discussed by the Committee during the year include the following:

–

Analysis of shareholder voting at the 2022 Annual General Meeting and annual remuneration report;

–

April 2023 ﬁxed pay review;

–

2021/22 and 2022/23 annual bonus outcomes;

–

2023/24 annual bonus plan structure (including ESG);

–

2022/23 LTIP grant performance measures and targets;

–

2017/18 block award, Recovery Incentive Scheme and 2020/21 LTIP grant performance;

–

Review and approval of remuneration of the Chair, Executive Directors, Executive Committee and other senior management;

–

Alignment of the Executive Directors remuneration with the wider force;

–

Corporate governance and regulatory matters;

–

Executive Director shareholding guidelines and the Company’s free ﬂoat position;

–

Review and approval of the annual remuneration report 2022;

–

Review and approval of the Company’s Gender Pay Gap Report 2022; and

–

Reviewing the Committee’s effectiveness.

Advisers to the Committee (Unaudited)

The Committee has access to external information and research on market data and trends from independent consultants. The

Committee was advised by the UK Executive Compensation practice of Alvarez & Marsal (‘A&M’) as external remuneration advisers

to the Committee. A&M are signatories to the Remuneration Consultants’ Code of Conduct, which requires their advice to be impartial,

and they have conﬁrmed their compliance with the Code to the Committee.

During the year, the Committee requested A&M to advise on all aspects of remuneration practice, including but not limited to the

provision of benchmarking data, guidance on forthcoming changes to and application of remuneration related regulations and insight

on market practices. A&M fees totalled £65,860 for services provided to the Committee during the year (fees are based on hours spent).

A&M did not provide any services other than advice in relation to remuneration practice to the Group during the period under review

and thereafter the Committee is satisﬁed that the advice provided was independent.

Committee evaluation (Unaudited)

It is incumbent on the Board to ensure that a formal and rigorous review of the effectiveness of the Committee is conducted each year.

The Committee’s progress against last year’s actions are set out below. During 2022/23, Rank’s evaluation exercise focused at Board

level, facilitated externally by Lintstock Limited. As part of the process, the review commented on whether the Committee was

operating effectively. It was concluded that the Committee was operating effectively.

Progress on 2021/22 agreed focus areas during the year.

Agreed actions

Progress made during 2022/23

1. Reviewing alignment of management incentives with strategy,

particularly in light of the refresh of the Company’s strategic

pillars in 2021/22.

During the year, the Committee discussed the appropriate

approach to align management incentives to the Company’s

strategic aims. It was agreed to introduce a net gaming revenue

(‘NGR’) metric for 2023/24.

2. Reviewing approach to stakeholder engagement from

a remuneration perspective.

During the year, and following the change in the Committee’s

chair, a letter of introduction was sent to our major shareholders.

Our engagement with shareholders continues to be an area in

focus for 2023/24 as we consider the remuneration policy ahead

of shareholder approval in 2024.

Good progress was made in the year with our colleagues which

sought to provide greater insights on the Committee’s role and

responsibilities. The chair of the Committee also having the role

of designated Non-Executive Director for workforce engagement

has allowed for this to evolve during the year and has provided

the opportunities to engage directly with the wider workforce.

3. Considering ways in which to further embed ESG metrics

in reward.

Four ESG KPIs were introduced as ESG targets for Executive

Director reward for 2022/23 outcomes.

In addition to the above, a further area of focus in the year was ensuring its decision-making was considerate of information

on benchmarking and best practices as it considered its decisions in the year.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

145

Focus for 2023/24

Following the outcomes of this year’s Board effectiveness review and as part of the Committee’s annual evaluation exercise

and consideration of matters for the forthcoming year, we agreed that our focus for the year ahead should be:

Engage with our major shareholders ahead of the remuneration policy renewal in 2024.

2. Continue to embed ESG metrics and assess ESG targets for the wider Executive Committee.

3. Keep in focus external insights on remuneration trends and best practices.

Statement of shareholder voting (Unaudited)

The table below shows the voting outcome of the 2021/22 Directors’ Remuneration Report at the October 2022 Annual General

Meeting. Votes are shown both including and excluding the Company’s majority shareholder:

October 2022 – 2022 Annual Report on Directors’ Remuneration

No. of votes

‘For’ and

‘Discretionary’

% of

votes cast

No. of votes

‘Against’

% of

votes cast

Total no. of

votes cast

% of total

shareholders

eligible to vote

No. of votes

‘Withheld’¹

Including majority shareholder

432,970,860

99.87

550,696

0.13

433,521,556

92.55

19,681

Excluding majority shareholder²

168,856,777

99.67

550,696

0.33

168,856,777

82.87

19,681

A vote ‘withheld’ is not a vote in law.

Total ordinary shares in issue at the date of the meeting were 468,429,541. Total ordinary shares held by shareholders excluding the controlling shareholder

at the date of the meeting were 203,764,762.

Implementation of policy in 2023/24 (Unaudited)

Salaries and Benefits

Salaries will be reviewed during the year in line with the wider workforce with the expectation that any changes agreed

by the Committee will be effective 1 April 2024. Current base salaries are as follows:

–

John O’Reilly – £535,600

–

Richard Harris – £370,000

There are no planned changes to any beneﬁts or allowances.

Pension policy

Following the reduction in allowance for John O’Reilly effective from 1 January 2023, there will be no change to current pension

arrangements, both receiving allowances in lieu of pension contributions:

–

John O’Reilly – 3% of contracted salary (less lower earnings limit)

–

Richard Harris – 3% of contracted salary (less lower earnings limit)

Annual bonus

The maximum bonus potential for John O’Reilly is 150% of salary, and 120% of salary for Richard Harris. 85% of the maximum bonus

opportunity will remain based on ﬁnancial measures, split between the following performance measures:

–

75% based on adjusted Earnings Before Interest and Tax

–

10% based on Net Gaming Revenue (new measure for 2023/24)

The remaining 15% of bonus opportunity will be based on a quantitative assessment against Environmental, Social and Governance

(‘ESG’) targets, including:

–

Improvement in our colleague engagement score;

–

An improvement in colleague net promoter score on Safer Gambling measures;

–

A reduction in our carbon intensity metric; and

–

Customer engagement with Safer Gambling measures.

This is in addition to the continued application of a safer gambling assessment which could negatively impact the size of any bonus

award based upon weaknesses in control systems, lack of progress against key initiatives in the year or as a consequence of

enforcement action by the Gambling Commission.

Disclosure of the ﬁnancial targets is considered commercially sensitive and therefore will be disclosed retrospectively in next year’s

report.

Any bonus payable in excess of 100% of salary for John O’Reilly and 80% of salary for Richard Harris will be deferred into shares under

the deferred bonus plan for two years. The remainder will be payable in cash.

The Rank Group Plc

Annual Report 2023

146

Annual Report on Remuneration

Continued

Long-term incentives

It is anticipated that an annual award will be made to Executive Directors in 2023/24. 40% of the award will vest by reference to

relative total shareholder return (with 20% by reference to performance against an industry peer group and 20% by reference to

performance against companies comprising the FTSE 250 (excluding investment trusts)), 30% of the award will vest by reference

to underlying earnings per share and 30% of the award will vest by reference to strategic measures. It is intended that John O’Reilly

will receive an award at 200% of salary and that Richard Harris will receive an award at 150% of salary, with such awards to be made

within six weeks of the date of this report.

The performance conditions will be based on performance in the 2025/26 ﬁnancial year. The award will vest, subject to meeting the

performance targets and continued employment, on the third anniversary of grant. Vesting will take into consideration any current

or impending safer gambling sanction and Rank’s suitability to operate.

The strategic targets are deemed commercially sensitive and will be disclosed at the time of vesting.

Weighting

Threshold target

Stretch target

Threshold vesting

(% of max)

TSR

40%

Median

Outperform

median by 25%

10%

Underlying EPS

30%

7.3p

10.9p

7.5%

Strategic Measures

10%

Underlying Group EBIT Margin (%)

2.5%

10%

Digital NGR (£m)

2.5%

10%

Venues NGR (£m)

2.5%

Total

100%

25%

Vesting of TSR measures will be subject to relative performance of both a gaming comparator group and FTSE 250 (excluding investment trusts), equally weighted.

Alignment with the wider workforce

In applying the Remuneration Policy for 2022/23, the Committee considers and where possible, aligns practices across the Group:

Executive Directors

All employees

Salary

A 4% increase in salary for the Chief Executive and

a 5% increase in salary for the Chief Financial Ofﬁcer.

The average increase in salary across the Group was 7.5%,

including an average increase of 5% for Management

and Leadership.

Pension

A pension allowance equal to 3% of salary

(minus the lower earnings limit).

Outside of statutory pension provisions, a company contribution

of between 3% and 10% is offered based on seniority and location.

Bonus

Bonus aligned to adj. EBIT, NGR and ESG outcomes.

Award levels vary by seniority. For 2023/24, leadership bonuses

globally align with the structure applied to the Executive

Directors. Below leadership we operate a number of different

bonus and incentive plans based on the contribution expected

by the employee.

LTIP

2024 LTIP award subject to rTSR, EPS and strategic

objectives. Two-year holding requirement post vesting.

We apply the same performance conditions to awards offered to

senior leadership roles across the Group, however, award levels

vary by seniority with no two year holding requirement post vesting.

Non-Executive Director fees

Non-Executive Director annual base and additional fees effective 1 July 2023 comprise:

Fee

Board Chair

£175,000

Base Non-Executive annual fee

£52,000

Audit Committee Chair

£9,000

Remuneration Committee Chair

£9,000

ESG and Safer Gambling Committee Chair

£9,000

Senior Independent Director

£6,000

The fees had been unchanged for more than six years (other than the fee for Chair of the ESG & Safer Gambling Committee which has itself been unchanged since

the Committee was established in 2018). Application of increases to independent Non-Executive Director fees approved by the Company’s Finance Committee to apply

from 1 April 2020 were not implemented due to COVID-19.

Following a review, the fees were increased with effect from 1 July 2023 to the above fees from: (i) Chair: £160,000 (9%), (ii) Base Non-Executive annual fee: £50,000 (4%),

(iii) Remuneration Committee Chair: £7,500 (20%), (v) ESG and Safer Gambling Committee Chair: £3,500 (157%), and (vi) Senior Independent Director: £2,500 (140%).

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

147

The Directors present their report together with the audited consolidated ﬁnancial statements for the year ended 30 June 2023.

The Companies Act 2006 (‘CA 2006’), the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008,

the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008, the Financial Reporting

Council’s UK Corporate Governance Code (July 2018), the Financial Conduct Authority’s (‘FCA’) Listing Rules (‘LR’) and the FCA’s

Disclosure Rules and Transparency Rules (‘DTR’) contain mandatory disclosure requirements in relation to this Annual Report in

respect of the year ended 30 June 2023.

The Directors’ Report should be read in conjunction with the Strategic Report.

Strategic Report disclosures – Information that the Board considers to be of strategic importance which would otherwise need

to be disclosed in the Directors’ Report has been included in the Strategic Report as permitted by section 414C(11) of the CA 2006.

References to where that information can be found are provided in the index below.

Information required in the Directors’ Report

which has been disclosed within the Strategic Report

Location in Strategic Report

Page number

Business description

Our business

Inside cover

and 6 to 9

Business objectives, strategies and likely future developments

Our strategy

6 to 9 and

30 to 41

Corporate responsibility: employees and community

(including hiring, continuing employment and training,

career development and promotion of disabled persons)

Our approach to ESG

52 to 71

Diversity

Colleagues

55 to 56

Dividends

Chair’s letter

12 to 13

Stakeholder engagement

45 to 49

Going concern and viability statement

Compliance statements

88 to 89

Greenhouse gas emissions

Environment

67 to 68

Particulars of important events affecting the Company and

its subsidiary undertakings occurring after the year end

Chair’s letter and Chief Executive’s review

12 to 13 and

14 to 21

Principal risks and uncertainties

Risk management

80 to 87

Proﬁts

CFO’s review

72 to 73

Research and development

Our strategy

Customers and customer insights

Stakeholder engagement

30 to 41,

46 to 49 and

53 to 55

Disclosures required under LR 9.8.4 R

For the purposes of LR 9.8.4C R, details of the existence of the controlling shareholder relationship agreement, required to be disclosed

in accordance with LR 9.8.4 R, can be found on page 149. There are no other disclosures required under this Listing Rule.

Directors

The Directors who served during the period under review are:

Name

Position

Notes

Lucinda Charles-Jones

Non-Executive Director

Chew Seong Aun

Non-Executive Director

Steven Esom

Non-Executive Director

Stepped down from the Board on 31 December 2022

Richard Harris

Chief Financial Ofﬁcer

Katie McAlister

Non-Executive Director

John O’Reilly

Chief Executive

Alex Thursby

Chair

Karen Whitworth

Senior Independent Director

The Rank Group Plc

Annual Report 2023

148

Directors’ Report

Incorporation and registered office

The Rank Group Plc is incorporated in England and Wales under company registration number 03140769. Its registered ofﬁce is at TOR,

Saint-Cloud Way, Maidenhead SL6 8BN.

Stock market listing

The ordinary shares of the Company have been listed on the Ofﬁcial List and traded on the main market of the London Stock Exchange

for listed securities since 7 October 1996 (Share Code: RNK and ISIN: GB00B1L5QH97). This is classiﬁed as a premium listing. The

share registrar is Equiniti Limited.

Share capital

The Company’s authorised share capital as at 30 June 2023 was £180m (£180m as at 30 June 2022), divided into 1,296,000,000

ordinary shares of 13

p each. The ordinary shares are listed on the London Stock Exchange and can be held in certiﬁcated or

uncertiﬁcated form. There were 468,429,541 shares in issue at the period end (468,429,541 as at 30 June 2022), which were held by

9,081 registered shareholders (9,296 as at 30 June 2022). Details of movements in issued share capital can be found in Note 24 of the

Financial Statements.

Range

Total no. of

registered

shareholders

% of holders

Total no. of

% of issued

share capital

1 – 1,000

7,854

86.49

1,376,351

0.29

1,001 – 5,000

907

9.99

1,833,662

0.39

5,001 – 10,000

1.04

649,533

0.14

10,001 – 100,000

133

1.46

4,306,759

0.92

100,001 – 1,000,000

0.70

21,360,983

4.56

1,000,001 and above

0.32 438,902,253

93.70

Totals

9,081

100.00%

468,429,541

100.00%

Significant shareholders

GuoLine Capital Assets Limited

(‘GuoLine’), the ultimate parent company

of Guoco Group Limited (‘Guoco’), has a

controlling interest in Rank consequent

upon the general offer made by its

Hong-Kong-listed subsidiary company,

Guoco, via its wholly-owned subsidiary,

Rank Assets Limited (then known as All

Global Investments Limited), and which

completed on 15 July 2011.

GuoLine became the ultimate parent

company of Guoco (in place of Hong Leong

Company (Malaysia) Berhad (‘Hong Leong’),

which was previously its parent company)

on 16 April 2021 as a result of an internal

restructure of the majority shareholder

(the ‘Restructure’). GuoLine is based in

Jersey and, together with its subsidiaries,

is engaged in the businesses of banking

and ﬁnancial services, manufacturing and

distribution, property development and

investments and hospitality and leisure.

Guoco is an investment holding company.

The principal activities of its subsidiaries

and associated companies include

investment, property development,

ﬁnancial services and hospitality and

leisure. Further information on the

Guoco group of companies can be found

at www.guoco.com. Following the

Restructure, Hong Leong held a residual

195,000 shares (0.04%) in Rank via its

wholly-owned subsidiary Hong Leong

Management Co. Sdn Berhad, which were

transferred to GuoLine Overseas Limited

(Guoco’s immediate parent company)

on 27 May 2021. On 19 June 2023, GuoLine

Overseas Limited transferred its 195,000

shares (0.04%) in Rank to another GuoLine

wholly-owned subsidiary, GuoLine

(Singapore) Ptd Ltd.

As at 30 June 2023 and as at the date of this

report, GuoLine’s interest is held as follows:

–

53.34% – Rank Assets Limited, a

wholly-owned subsidiary of Guoco;

–

4.09% – GuoLine (Singapore) Pte Ltd,

a wholly-owned subsidiary of GuoLine.

On 10 November 2014, Rank entered into

an agreement with Hong Leong and Guoco

in accordance with the requirements of

LR 9.2.2A R(2)(a) (the ‘Relationship

Agreement’). Further to the Restructure,

Hong Leong, Guoco and Rank agreed to

novate the Relationship Agreement such

that with effect from 16 April 2021, the

parties to the Relationship Agreement are

Rank, Guoco and GuoLine. The terms of the

Relationship Agreement remain unchanged.

During the period under review Rank

has complied with the independence

provisions included in the Relationship

Agreement. So far as Rank is aware,

the independence provisions included

in the Relationship Agreement have been

complied with during the period under

review by Hong Leong, GuoLine, Guoco

and associates. So far as Rank is aware,

the procurement obligations included

in the Relationship Agreement have been

complied with during the period under

review by the Hong Leong, GuoLine,

Guoco and associates.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

149

Interests of 3% or more

As at 30 June 2023 and 31 July 2023 the following interests of 3% or more of the total voting rights attached to ordinary shares have

been disclosed in response to Section 793 of the Companies Act 2006 (‘CA 2006’) notices issued by the Company.

As at 30 June 2023

As at 31 July 2023

Shareholder

% held

Voting rights

% held

Voting rights

GuoLine Capital Assets Limited

57.43

269,025,106

57.43

262,025,106

Ameriprise Financial, Inc. and its group of companies

(Threadneedle Retail Funds – Linked Strategies)

9.32

43,636,413

9.31

43,618,754

Aberforth Partners

6.78

31,781,501

6.97

32,640,001

abrdn

3.47

16,275,625

3.47

16,275,625

The following interests of 3% or more of the total voting rights attached to ordinary shares have been notiﬁed to the Company in

accordance with the UK Financial Conduct Authority’s (‘FCA’) Disclosure Guidance and Transparency Rules (‘DTR’), Rule 5. Due to the

fact that the DTRs only require notiﬁcation where the percentage voting rights reach, exceed or fall below 3% and each 1% threshold

above 3%, there is a difference between disclosures made pursuant to the DTRs and those disclosed in response to Section 793 of the

CA 2006 notices issued by the Company as set out above.

As per FCA DTRs disclosures

as at 16 August 2023

Shareholder

Date last notiﬁed under DTR

% held

Voting rights

GuoLine Capital Assets Limited

21 June 2023

57.43%

269,025,106

Ameriprise Financial, Inc. and its group of companies

10 December 2015

7.65%

29,870,389

Artemis Investment Management LLP

31 May 2017

4.94%

19,287,793

Aberforth Partners

11 May 2022

5.13%

24,032,891

M&G Plc

18 May 2022

4.94%

23,169,044

Under the FCA’s Listing Rule 6.1.14 3R,

shares held by persons who have an

interest in 5% or more of a listed

company’s share capital are not regarded

as being in public hands (the ‘free ﬂoat’).

Under this rule, the shares held by

GuoLine, Ameriprise Financial

and Aberforth Partners are not regarded

as being in public hands. The Company’s

free ﬂoat position (according to responses

to Section 793 notices) as at 30 June 2023

was 26% (28.50% as at 30 June 2022).

Rights and restrictions attaching

to shares

Voting rights

Each ordinary share carries the right to one

vote at general meetings of the Company.

Meeting rights

Registered holders of ordinary shares

are entitled to attend and speak at general

meetings and to appoint proxies.

Information rights

Holders of ordinary shares are entitled

to receive the Company’s Annual Report

and Financial Statements.

Share transfer restrictions

There are no speciﬁc restrictions on

the transfer of shares contained in the

Company’s Articles of Association.

The Company is not aware of any

agreements between the holders of Rank

shares that may result in restrictions on

the transfer of shares or that may result

in restrictions on voting rights.

Variation of rights

Subject to applicable legislation, the rights

attached to Rank’s ordinary shares may

be varied with the written consent of the

holders of at least three-quarters in

nominal value of those shares, or by a

special resolution passed at a general

meeting of the ordinary shareholders.

The Rank Group Plc

Annual Report 2023

150

Directors’ Report

Continued

Directors’ powers in relation to shares

Allotment and issue of shares

Subject to the provisions of the CA 2006,

and subject to any resolution passed by

the Company pursuant to the CA 2006

and other shareholder rights, shares

in Rank may be issued with such rights

and restrictions as the Company may by

ordinary resolution decide. If there is no

such resolution or so far as the Company

does not make speciﬁc provision, they

may be issued as Rank’s Board may

decide. Subject to the Company’s Articles

of Association, the CA 2006 and other

shareholder rights, unissued shares

are at the disposal of the Board.

The Company currently has no shareholder

authority to allot and grant rights over any

proportion of the Company’s unissued

share capital, nor does it have shareholders’

authority to allot and grant rights over

ordinary shares without ﬁrst making

a pro rata offer to all existing ordinary

shareholders. Neither of these authorities is

required for the purpose of allotting shares

pursuant to employee share schemes.

Market purchases of own shares

The Company currently has no shareholder

authority to make market purchases of its

own shares. As the Board has no present

intention of making a market share

purchase of its own shares, this

shareholder approval will not be sought at

the forthcoming Annual General Meeting.

Directors’ other powers

Subject to legislation, the Directors may

exercise all the powers permitted by the

Company’s Memorandum and Articles

of Association. A copy of these can be

obtained by writing to the Company

Secretary, or from Companies House.

Change of control

The Company’s principal term loan

and credit facility agreements contain

provisions that, on a change of control

of Rank, immediate repayment can be

demanded of all advances and any

accrued interest.

The provisions of the Company’s share

schemes and incentive plans may cause

options and awards granted to employees

to vest in the event of a takeover.

A change of control may also affect

licences to operate, as speciﬁed in the

provisions of the Gambling Act 2005,

Alderney eGambling Regulations 2009

(as amended), Gibraltar Gambling Act

2005 and the Spanish Gaming Act 2011.

Political donations

No political donations were made during

the period under review.

It has been Rank’s long-standing practice

not to make cash payments to political

parties and the Board intends that this

will remain the case. However, the CA 2006

is very broadly drafted and could catch

activities such as funding seminars and

other functions to which politicians are

invited, supporting certain bodies involved

in policy review and law reform and

matching employees’ donations to certain

charities. Accordingly, as in previous years,

the Directors will be seeking shareholders’

authority for political donations and

political expenditure at the forthcoming

Annual General Meeting in case any of

Rank’s activities are inadvertently caught

by the legislation.

Disclosure of information to auditor

Each of the Directors of the Company

at the date of this report conﬁrms that:

–

so far as the Director is aware, there is

no information needed by the Company’s

auditor in connection with preparing

their report of which the Company’s

auditor is unaware; and

–

he/she has taken all the steps that

he/she ought to have taken as a Director

in order to make himself/herself aware

of any information needed by the

Company’s auditor in connection with

preparing their report and to establish

that the Company’s auditor is aware

of that information.

By order of the Board

Asha Magnus

Company Secretary

16 August 2023

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

151

Annual Report and Financial

Statements

The Directors are responsible for

preparing the Annual Report (including

the Directors’ Report, the Strategic Report,

the Directors’ Remuneration Report and

the Corporate Governance Statement) and

the Financial Statements of the Group and

the Company, in accordance with applicable

United Kingdom law and regulations.

Company law requires the Directors

to prepare Group and Company ﬁnancial

statements for each ﬁnancial year. Under

that law, the Directors have elected to

prepare Group and Company ﬁnancial

statements in accordance with UK-adopted

International Accounting Standards and in

accordance with the Companies Act 2006

(‘CA 2006’). Under company law the

Directors must not approve the Group and

Company ﬁnancial statements unless they

are satisﬁed that they give a true and fair

view of the state of affairs of the Group

and Company and of the proﬁt or loss

of the Group for that period.

In preparing the Group and Company

ﬁnancial statements, the Directors are

required to:

–

select suitable accounting policies

in accordance with IAS 8 Accounting

Policies, Changes in Accounting

Estimates and Errors and then apply

them consistently;

–

present information, including

accounting policies, in a manner that

provides relevant, reliable, comparable

and understandable information;

–

make judgements and accounting

estimates that are reasonable

and prudent;

–

provide additional disclosures when

compliance with the speciﬁc requirements

in UK-adopted International Accounting

Standards is insufﬁcient to enable users

to understand the impact of particular

transactions, other events and conditions

on the Group and Company’s ﬁnancial

position and ﬁnal performance;

–

state whether the Group and Company

ﬁnancial statements have been prepared

in accordance with CA 2006 and

UK-adopted International Accounting

Standards, subject to any material

departures disclosed and explained

in the ﬁnancial statements; and

–

prepare the Financial Statements

on the going concern basis unless it is

appropriate to presume that the Group and

Company will not continue in business.

Accounting records

The Directors are responsible for keeping

adequate accounting records that are

sufﬁcient to show and explain the Group

and Company’s transactions and disclose

with reasonable accuracy, at any time, the

ﬁnancial position of the Group and the

Company and ensure that the Group and

Company ﬁnancial statements comply with

the Companies Act 2006.

Safeguarding assets

The Directors are also accountable

for safeguarding the assets of the Group

and the Company and hence for taking

reasonable steps for the prevention and

detection of fraud and other irregularities.

Corporate website

The maintenance and integrity of Rank’s

corporate website, www.rank.com, on

which this Annual Report and Financial

Statements are published, is the Board’s

responsibility. We would draw attention

to the fact that legislation in the United

Kingdom on the preparation and

publication of ﬁnancial statements may

differ from that in other jurisdictions.

Statement of Directors’

responsibilities

The Annual Report and Financial Statements

are the responsibility of, and have been

approved by, the Directors.

Each of the Directors named on pages 98

to 99 conﬁrms that to the best of his/her

knowledge:

–

the Annual Report and Financial

Statements, taken as a whole, are fair,

balanced and understandable and

provide the information necessary

for shareholders to assess the Group’s

performance, business model

and strategy;

–

the Group and Company Financial

Statements, prepared in accordance with

UK-adopted International Accounting

Standards and in accordance with the

Companies Act 2006, give a true and fair

view of the assets, liabilities, ﬁnancial

position and proﬁt of the Company and

the undertakings included in the

consolidation taken as a whole; and

–

the Strategic Report includes a review of

the development and performance of the

business and the position of the Group

and Company and the undertakings

included in the consolidation taken as a

whole, together with a description of the

risks and uncertainties that they face.

On behalf of the Board

John O’Reilly

Chief Executive

Richard Harris

Chief Financial Ofﬁcer

16 August 2023

The Rank Group Plc

Annual Report 2023

152

Directors’ Responsibilities

In this section:

We have set out our ﬁnancial

statements for the year ended

30 June 2023, together with

the notes to such statements

and our ﬁve-year review.

This section also includes our

independent auditor’s report,

which includes its formal audit

opinion in respect of the year

ended 30 June 2023.

Shareholder information

can be found on page 219.

154 Independent auditor’s report

164 Group income statement

165

Group statement of comprehensive (loss) income

166 Balance sheets

168 Statements of changes in equity

170

Statements of cash ﬂow

171

Notes to the ﬁnancial statements

218 Five-year review

219 Shareholder information

Strategic report

Governance report

Financial statements

Overview

The Rank Group Plc

Annual Report 2023

153

Financial statements

Opinion

In our opinion:

–

The Rank Group Plc’s group ﬁnancial

statements and Parent company

ﬁnancial statements (the ‘ﬁnancial

statements’) give a true and fair view of

the state of the group’s and of the parent

company’s affairs as at 30 June 2023

and of the group’s proﬁt for the year

then ended;

–

the group ﬁnancial statements have

been properly prepared in accordance

with UK adopted international

accounting standards;

–

the parent company ﬁnancial statements

have been properly prepared in

accordance with UK adopted

international accounting standards as

applied in accordance with section 408

of the Companies Act 2006; and

–

the ﬁnancial statements have been

prepared in accordance with the

requirements of the Companies Act 2006.

We have audited the ﬁnancial statements of

The Rank Group Plc (the ‘Parent company’)

and its subsidiaries (the ‘Group’) for the

year ended 30 June 2023 which comprise:

Group

Parent company

Consolidated

balance sheet as

at 30 June 2023

Balance sheet as

at 30 June 2023

Consolidated

income statement

for the year then

ended

Statement of

changes in equity

for the year then

ended

Consolidated

statement of

comprehensive

income for the year

then ended

Related notes 1 to

35 to the ﬁnancial

statements

including a

summary of

signiﬁcant

accounting policies

Consolidated

statement of

changes in equity

for the year then

ended

Consolidated

statement of cash

ﬂows for the year

then ended

Related notes 1 to

35 to the ﬁnancial

statements,

including a

summary of

signiﬁcant

accounting policies

The ﬁnancial reporting framework that

has been applied in their preparation

is applicable law and UK adopted

international accounting standards and

as regards the parent company ﬁnancial

statements, as applied in accordance with

section 408 of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance

with International Standards on Auditing

(UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards

are further described in the Auditor’s

responsibilities for the audit of the

ﬁnancial statements section of our report.

We believe that the audit evidence we have

obtained is sufﬁcient and appropriate to

provide a basis for our opinion

Independence

We are independent of the group and

parent in accordance with the ethical

requirements that are relevant to our

audit of the ﬁnancial statements in the

UK, including the FRC’s Ethical Standard

as applied to listed public interest entities,

and we have fulﬁlled our other ethical

responsibilities in accordance with

these requirements.

The non-audit services prohibited by the

FRC’s Ethical Standard were not provided

to the group or the parent company and we

remain independent of the group and the

parent company in conducting the audit.

Conclusions relating

to going concern

In auditing the ﬁnancial statements, we

have concluded that the directors’ use of

the going concern basis of accounting in

the preparation of the ﬁnancial statements

is appropriate. Our evaluation of the

directors’ assessment of the group and

parent company’s ability to continue to

adopt the going concern basis of

accounting included:

–

In conjunction with our walkthrough

of the Group’s ﬁnancial statement close

process, we conﬁrmed our

understanding of Rank’s going concern

assessment process as well as the

review controls in place in relation to the

going concern model and management’s

Board memoranda.

–

We have obtained an understanding of

management’s rationale for the use of

the going concern basis of accounting.

To challenge the completeness of the

assessment, we have independently

identiﬁed factors that may indicate

events or conditions that may cast doubt

over the entity’s ability to continue as

a going concern.

–

We have performed the following

procedures.

Managements’ assessment

and assumptions

–

We conﬁrmed our understanding

of Rank’s going concern assessment

process, including how principal and

emerging risks were considered.

–

We obtained the cash ﬂow forecast

models prepared by management

to 31 August 2024 used by the Board

in its assessment, checking their

arithmetical accuracy and agreed

the forecasts to the Board approved

budgets.

–

We evaluated the appropriateness

of the duration of the going concern

assessment period to 31 August 2024

and considered the existence of any

signiﬁcant events or conditions

beyond this period based on our

enquiries of management, Group’s ﬁve

year plan and knowledge arising from

other areas of the audit.

–

We obtained the cash ﬂow, covenant

forecasts and sensitivities for the

going concern period prepared by

management to 31 August 2024 used

by the Board in its assessment and

tested for arithmetical accuracy of the

models and agreed the forecasts to the

Board approved budgets. We assessed

the reasonableness of the cashﬂow

forecast by analysis of management’s

historical forecasting accuracy and

understanding how any anticipated

impact of rising inﬂation on consumer

spending, surge in living costs and

energy prices have been modelled.

–

We evaluated the key assumptions

used by management in preparing the

modelling and corroborated those to

evidence from external sources where

available, and considered contrary

evidence by considering industry data

and forecasts and analyst expectations.

–

We performed independent reverse

stress testing to understand how

severe the downside scenarios would

need to be to result in negative

liquidity or a covenant breach. The

assessment reﬂects all maturing debt

to 31 August 2024.

–

The audit procedures performed in

evaluating the director’s assessment

were performed by the Group audit

team, however, we also considered the

ﬁnancial and non-ﬁnancial

information communicated to us from

our component teams as sources of

potential contrary indicators which

may cast doubt over the Going

Concern assessment.

–

We considered whether the Group’s

forecasts in the going concern

assessment were consistent with other

forecasts used by the Group in its

accounting estimates, including

non-current asset impairment and

deferred tax asset recognition.

Independent auditor’s report

To the members of The Rank Group Plc

The Rank Group Plc

Annual Report 2023

154

Refinancing and bank covenant

compliance

–

We obtained all the group’s existing

borrowing facility agreements and

performed a detailed examination

of all agreements, to assess their

continued availability to the Group

throughout the going concern period

and to ensure completeness of

covenants identiﬁed by management.

We engaged our internal debt specialist

in understanding the covenant

compliance relating to the agreements

in place.

–

We assessed the accuracy of

management’s covenant forecast

model on the base case, verifying

inputs to board approved forecasts

and facility agreement terms.

–

We obtained the signed extensions to

the Revolving Credit Facility dated 07

August 2023 and understood the

revised terms including maturity and

arrangement fees and the impact on

covenant and liquidity compliance

in the going concern period.

–

We evaluated the compliance of

the Group with debt covenants in

the forecast period by reperforming

calculations of the covenant tests.

We further assessed the impact of the

downside risk scenarios on covenant

compliance and applied sensitivity

analysis.

Stress testing and evaluation

of management’s plans for

future actions

–

We considered management’s

downside scenarios of the Group’s

cash ﬂow forecast models and their

impact on forecast liquidity and

forecast covenant compliance.

Speciﬁcally, we considered whether

the downside risks were reasonably

possible, but not unrealistic and

further considered whether the

adverse effects could arise

individually and collectively.

–

We considered the reverse stress test

to understand what it would take to

breach available liquidity and exhaust

covenant headroom.

–

We considered the likelihood of

management’s ability to execute

feasible mitigating actions available

to respond to the downside risk

scenarios based on our understanding

of the Group and the sector,

including considering whether those

mitigating actions were controllable

by management.

Disclosures

–

We considered whether management’s

disclosures in the ﬁnancial statements

sufﬁciently and appropriately reﬂect

the going concern assessment

including key judgements made and

outcomes underpinning Group’s

ability to continue as a going concern

for the period up to the 31 August 2024.

Our key observations

–

The directors’ assessment forecasts

that the Group will maintain sufﬁcient

liquidity and covenant compliance

throughout the going concern

assessment period. Management’s

assessment was supported by two

downside scenarios with severe but

plausible declines in revenue and

increased inﬂationary impact, living

costs and energy prices. Management’s

assessment was also supported by a

reverse stress test (extreme scenario)

with more severe decline in revenue

which was concluded to be implausible.

–

The downside scenarios assumed full

repayment of scheduled debt

repayments over the going concern

period as well as a material decrease in

forecasted revenue offset by mitigating

actions within managements control.

Management considers such scenarios

to be highly unlikely, however, in such

unlikely event management consider

that the impact can be mitigated by

further cash and cost saving measures

which are within their control, during

the going concern period.

–

We note that management has

performed an assessment to consider

whether any events outside of the going

concern period beyond 31 August 2024

need to be considered in the context of

management’s conclusion. Management

assessed that the revised maturity of

the revolving credit facilities at the end

of February 2025, being six and a half

months beyond the end of the going

concern period (31 August 2024)

does not constitute a signiﬁcant event

or condition that may cast doubt over

the entity’s ability to continue as a

going concern.

Going Concern Conclusion

Based on the work we have performed,

we have not identiﬁed any material

uncertainties relating to events or conditions

that, individually or collectively, may cast

signiﬁcant doubt on the Group and Parent

company’s ability to continue as a going

concern for a period to 31 August 2024.

In relation to the Group and Parent

company’s reporting on how they have

applied the UK Corporate Governance

Code, we have nothing material to add

or draw attention to in relation to the

directors’ statement in the ﬁnancial

statements about whether the directors

considered it appropriate to adopt the

going concern basis of accounting.

Our responsibilities and the responsibilities

of the directors with respect to going

concern are described in the relevant

sections of this report. However, because

not all future events or conditions can

be predicted, this statement is not a

guarantee as to the Group’s ability to

continue as a going concern.

Overview of our audit approach

Audit

scope

–

We performed an audit

of the complete ﬁnancial

information of ﬁve

components and audit

procedures on speciﬁc

balances for a further

twenty-one components.

–

The components where we

performed full or speciﬁc

audit procedures

accounted for 99% of

Revenue, 99% of Proﬁt

before tax, and 90%

of Total assets.

Key audit

matters

–

Impairment and

impairment reversal

of tangible and

intangible assets.

–

Compliance with laws

and regulations.

–

Revenue recognition

including the risk of

management override.

Materiality

–

Overall group materiality

of £3.5m which represents

0.5% of revenue.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

155

An overview of the scope of the

parent company and group

Tailoring the scope

Our assessment of audit risk, our

evaluation of materiality and our allocation

of performance materiality determine our

audit scope for each company within the

Group. Taken together, this enables us

to form an opinion on the consolidated

ﬁnancial statements. We take into account

size, risk proﬁle, the organisation of the

group and effectiveness of group-wide

controls, changes in the business

environment, the potential impact of

climate change and other factors such

as recent Internal audit results when

assessing the level of work to be

performed at each company.

In assessing the risk of material

misstatement to the Group ﬁnancial

statements, and to ensure we had adequate

quantitative coverage of signiﬁcant

accounts in the ﬁnancial statements, of

the forty-two reporting components of the

Group, we selected twenty-six components

covering entities within United Kingdom,

Alderney, Malta, Spain, Gibraltar and

Mauritius, which represent the principal

business units within the Group.

Of the twenty-six components selected,

we performed an audit of the complete

ﬁnancial information of ﬁve components

(‘full scope components’) which were

selected based on their size or risk

characteristics. For the remaining

twenty-one components (‘speciﬁc scope

components’), we performed audit

procedures on speciﬁc accounts within

that component that we considered had

the potential for the greatest impact on

the signiﬁcant accounts in the ﬁnancial

statements either because of the size

of these accounts or their risk proﬁle.

The reporting components where we

performed audit procedures accounted for

99% (2022: 99%) of the Group’s revenue,

99% (2022: 87%) of the Group’s proﬁt

before tax and 90% (2022: 95%) of the

Group’s Total assets.

For the current year, the full scope

components contributed 85% (2022: 86%)

of the Group’s revenue, 74% (2022: 64%)

of the Group’s proﬁt before tax and 65%

(2022: 70%) of the Group’s Total assets.

The speciﬁc scope component contributed

14% (2022: 13%) of the Group’s revenue,

25% (2022: 23%) of the Group’s proﬁt

before tax and 25% (2022: 27%) of the

Group’s Total assets.

The audit scope of these components may

not have included testing of all signiﬁcant

accounts of the component but will have

contributed to the coverage of signiﬁcant

accounts tested for the Group.

The Primary team perform speciﬁed

procedures over certain aspects of cash

and overhead expenses, for ten components,

this includes independent conﬁrmation

of cash and vouching expenses to invoice

and analytical reviews. For ﬁve of these

components the Primary Team also

performed speciﬁed procedures over

certain aspects of revenue, as described

in the Risk section above.

Of the remaining sixteen components

that together represent 1% of the Group’s

revenue, none are individually greater

than 0.5% of the Group’s revenue. For

these components, we performed other

procedures, including analytical review,

testing of consolidation journals,

intercompany eliminations and foreign

currency translations to respond to any

potential risks of material misstatement

to the Group ﬁnancial statements.

The charts to the right illustrate the

coverage obtained from the work

performed by our audit teams.

Changes from the prior year

The number of full scope entities has

declined from six in the prior year to ﬁve

in the current year due to the transfer

of trade and assets of two full scope

components to a single component during

the year. Further, two components which

were designated as speciﬁc scope in the

prior year were designated as review scope

in the current year to lower levels of

activity within these components.

Revenue

Total assets

Profit before tax

Full scope components

85%

Speciﬁc scope components

14%

Other procedures

Full scope components

65%

Speciﬁc scope components

25%

Other procedures

10%

Full scope components

74%

Speciﬁc scope components

25%

Other procedures

The Rank Group Plc

Annual Report 2023

156

Independent auditor’s report

Continued

Involvement with component teams

In establishing our overall approach to the

Group audit, we determined the type of

work that needed to be undertaken at each

of the components by us, as the primary

audit engagement team, or by component

auditors from other EY global network

ﬁrms operating under our instruction.

For the ﬁve full scope components and

eleven speciﬁc scope components, audit

procedures were performed directly by

the primary audit team. For the ten

speciﬁc scope components, where the

work was performed by component

auditors, we determined the appropriate

level of involvement to enable us to

determine that sufﬁcient audit evidence

had been obtained as a basis for our

opinion on the Group as a whole.

The Group audit team continued to follow

a programme of planned visits that has

been designed to ensure that the Senior

Statutory Auditor visits and a senior team

members visit one of the two speciﬁc

scope locations each year. During the

current year’s audit cycle, visits were

undertaken by the primary audit team to

Mauritius. The visit involved direct testing

of on relevant Group risk areas including

revenue and compliance matters and

meeting with local management. The

primary team interacted regularly with the

component teams where appropriate during

various stages of the audit, reviewed

relevant working papers and were

responsible for the scope and direction of

the audit process. This, together with the

additional procedures performed at Group

level, gave us appropriate evidence for our

opinion on the Group ﬁnancial statements.

Climate change

Stakeholders are increasingly interested in

how climate change will impact the Group.

The Group has determined that the most

signiﬁcant future impacts from climate

change on their operations will be from

increased cost of energy. These are

explained on pages 59 to 70 in the

required Task Force for Climate related

Financial Disclosures and on page 81

in the principal risks and uncertainties.

They have also explained their climate

commitments on pages 56 to 58. All of

these disclosures form part of the ‘Other

information’, rather than the audited

ﬁnancial statements. Our procedures

on these unaudited disclosures therefore

consisted solely of considering whether

they are materially inconsistent with the

ﬁnancial statements or our knowledge

obtained in the course of the audit or

otherwise appear to be materially

misstated, in line with our responsibilities

on ‘Other information’.

In planning and performing our audit we

assessed the potential impacts of climate

change on the Group’s business and any

consequential material impact on its

ﬁnancial statements.

As explained in note 1, the basis of

preparation, consideration of climate

change impact on the judgements in the

accounts is not considered to have a

material impact at this time. Governmental

and societal responses to climate change

risks are still developing, and are

interdependent upon each other, and

consequently ﬁnancial statements cannot

capture all possible future outcomes as

these are not yet known. The degree of

certainty of these changes may also mean

that they cannot be taken into account

when determining asset and liability

valuations and the timing of future cash

ﬂows under the requirements of UK-

adopted International Accounting

Standards (‘IFRS’).

Our audit effort in considering climate

change was focused on evaluating

management’s assessment of the impact of

climate risk and the costs of energy being

appropriately reﬂected in the assessment

of the carrying value of assets, impairment

of assets, reduction of economic useful lives

of tangible and intangible assets, provisions

and fair value measurement and associated

disclosures where values are determined

through modelling future cash ﬂows,

being the impairment tests of tangible and

intangible assets and related disclosures.

We also challenged the Directors’

considerations of climate change risk in

their assessment of going concern and

viability and associated disclosures.

Based on our work we have not identiﬁed

the impact of climate change on the

ﬁnancial statements to be a key audit

matter or to impact a key audit matter.

Key audit matters

Key audit matters are those matters that,

in our professional judgment, were of most

signiﬁcance in our audit of the ﬁnancial

statements of the current period and

include the most signiﬁcant assessed risks

of material misstatement (whether or not

due to fraud) that we identiﬁed. These

matters included those which had the

greatest effect on: the overall audit strategy,

the allocation of resources in the audit;

and directing the efforts of the engagement

team. These matters were addressed in

the context of our audit of the ﬁnancial

statements as a whole, and in our opinion

thereon, and we do not provide a separate

opinion on these matters.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

157

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

Impairment and impairment

reversal of tangible and

intangible assets could

be materially misstated.

Impairment charge of

£118.9m (2022:£47.8m)

and impairment reversal

of £6.6m (2022: 22.0m)

Refer to the Audit Committee

Report (page 109); Accounting

policies (page 171); and note 13

of the Consolidated Financial

Statements (page 192)

At 30 June 2023 the carrying

value of tangible and

intangible assets was £618.4m

(2022: £708.3m), £411.4m

(2022: £438.9m) of which relate

to indeﬁnite life intangible

assets (primarily casino

and other gaming licences)

and goodwill.

This is an area of focus due to

the signiﬁcance of the carrying

value of the assets being

assessed and the level of

management judgement

required in the assumptions

impacting the impairment

assessment.

The related risk is considered

to be increased as post

pandemic recovery of venues

has been negatively affected

by the cost-of-living crisis and

inﬂationary pressures in the

markets where the Group

operates and the uncertainty

this causes when forecasting,

creating indicators of

impairment.

The risk is heightened as a

result of the proﬁt expectation

downgrade in December 22,

together with a positive update

to proﬁt guidance in April 23.

There are also indicators

of impairment reversals

for strong individual Cash

Generating Unit performance.

The below procedures were performed by the Primary team

for all components.

We gained an understanding of the controls through a walkthrough

of the process management has in place to assess impairment and

reversal of impairment.

We validated that, the methodology of the impairment exercise

continues to be consistent with the requirements of IAS 36

Impairment of Assets, including appropriate identiﬁcation

of cash generating units for value in use calculations.

Below we summarise the procedures performed in relation to

the key assumptions for the tangible (including Right of Use Assets)

and intangible assets impairment review.

–

We analysed managements’ long term forecasts underlying the

impairment review against past and current performance and

future economic forecasts, and comparison of forecasts to pre

Covid-19 trading, as well as macro-economic pressures in the

territories the Group operates and corroborated them to budgets

approved by the Board.

–

We reperformed calculations in the models to check

mathematical accuracy.

–

Critically challenged management’s ability to forecast accurately

through comparing actual performance against forecast

performance and corroborating the reasons for deviations.

–

Ensured cash ﬂow forecasts used in the impairment analysis

agreed to the ﬁnal board approved forecasts and that they were

consistent with forecasts used on the going concern base case

assessment.

–

We performed sensitivity analysis on earnings multiples and

weekly Net Gaming Revenue (NGR) for all cash generating units

(CGUs) and growth rates applied to cash ﬂows for certain CGUs

to determine the parameters that – should they arise – may give

a different conclusion as to the carrying values of assets assessed.

The sensitivities performed were based on reasonable possible

changes to key assumptions determined by management being

revenue growth, short-term growth rates, discount rate, EBITDA

multiple and long-term growth rates. We have corroborated that

the assumptions applied are reasonable by comparing to external

data such as economic and industry forecasts. We re-performed

the models to ensure that they were correctly calculated.

–

We have assessed assumed future costs to third party projections

on inﬂation, cost of energy and wages.

–

For partially impaired assets we considered the sensitivity

of changes in forecasts against current and budgeted trading

and the sensitivity of either further impairments or impairment

reversals and where material, ensured that the impact of this

consideration was adequately disclosed in the sensitivities.

–

Assessed the headroom on the recoverable amount between

the calculated value in use and carrying value of the CGUs to

ensure disclosures of the impact of reasonably possible changes

in assumptions and the impact on the carrying value of assets

was adequate.

–

For the right-of-use assets, we tested that the assets had been

appropriately allocated to the correct cash generating unit and

that a value in use calculation was performed in line with IAS 36.

Additionally, we validated that material changes to the right-of-use

asset in the period were appropriate.

–

We reviewed and challenged the appropriateness of disclosures

in the Annual Report and Accounts by comparing the disclosures

against the requirements under International Financial

Reporting Standards.

Based on our audit

procedures we have

concluded the impairment

charge of £118.9m and the

impairment reversal of

£6.6m was recognised

appropriately.

We highlighted that a

reasonably possible change

in certain key assumptions,

including short term growth

rates, change in discount

rate, changes in costs,

long term growth and the

earnings multiples that

are used to determine the

terminal value for certain

CGUs, could lead to further

impairment charges.

We have concluded

appropriate disclosures

have been included in

the ﬁnancial statements

as required under the

accounting standards.

Impairment over parent

company carrying

value of investment

in subsidiaries

Based on our audit

procedures we have

concluded the impairment

charge of £182.6m was

recognised appropriately.

We have concluded

appropriate disclosures

have been included in

the ﬁnancial statements

as required under the

accounting standards.

The Rank Group Plc

Annual Report 2023

158

Independent auditor’s report

Continued

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

Impairment over parent

company carrying value of

investment in subsidiaries.

Impairment charge of

£182.6m (2022: nil)

Within the parent company,

there is a heightened risk

of impairment as a result of

the risk of impairment across

the cash generating units

in the group.

In addition, we worked with our EY internal valuation

specialists to:

–

Independently validate and corroborate the discount rates applied

by management to supporting evidence and benchmarked the

discount rates to industry averages/trends.

Impairment over parent company carrying value of investment

in subsidiaries

–

We reviewed the arithmetical accuracy of managements

calculations of value in use of the investments to the carrying

value of the parent company investment subsidiaries and the

resulting impairment.

–

Agreed consistency in the forecasts used in the assessment of

carrying value of the parent company investments, to the cash

ﬂow used in the underlying Cash Generating Units.

–

We reviewed and challenged the appropriateness of disclosures

in the Annual Report and Accounts by comparing the disclosures

against the requirements under International Financial

Reporting Standards.

Compliance with laws

and regulations

Refer to the Audit Committee

Report (page 109); Accounting

policies (page 171); and note 32

of the Consolidated Financial

Statements (page 215)

The legal and licensing

framework for gaming

remains an area of focus for

the Gambling Commissions

in the UK and Spain.

The evolving environment,

with territory speciﬁc

regulations, makes compliance

an increasingly complex area

with the potential for ﬁnes

and or licence withdrawal for

non-compliance. Operators

are further required to meet

anti-money laundering

obligations.

Judgement is applied in

estimating amounts payable

to regulatory authorities,

or customers, in certain

jurisdictions. This gives

rise to a risk over the accuracy

of accruals, provisions and

disclosure of contingent

liabilities and the related

income statement effect.

We performed the following procedures:

–

We understood the Group’s process and related controls over the

identiﬁcation and mitigation of regulatory and legal risks and the

related accounting and disclosure.

–

We read regulatory correspondence and enquiries made through

the year, management’s response thereto and their assessment

of potential exposure as at 30 June 2023.

–

We inquired of management and the Group’s internal head of

compliance and legal counsel regarding any instances of material

breaches in regulatory or licence compliance that needed to be

disclosed or required potential provisions to be recorded.

–

For matters open in previous years, we have inquired of

management for progress and obtained supporting documents.

–

Reviewed litigation reports and correspondence with regulator

and tested the Group’s legal expenses in coordination with the

discussions with management and Group’s legal advisers.

–

Discussed with management its interpretation and application

of relevant laws and regulations as well as analysis of the risks

in respect of the Group’s operations in unregulated markets.

–

Tested management’s procedures over anti-money laundering

regulations and enhanced due diligence procedures, for a sample

of players for both venues and digital in the UK and Spain:

–

obtained and read know your customer (KYC) documentation

to ensure that it was in line with the requirements of the

Group’s policies.

–

where any changes to limits had been granted in the year,

for a sample of customers we obtained the account transaction

history and procedures and veriﬁed that these were in line

with the relevant policies and laws and regulations.

–

we analysed the list of Self-excluded users for the year to verify

that the number of days of exclusion requested by the user has

passed before access was granted to the user.

–

For any provisions and contingent liabilities recognised, we have

obtained supporting calculation and challenged the

appropriateness of assumptions and estimates applied. We have

performed this with reference to previous or ongoing inquiries

with the Group or its competitors.

–

Assessed appropriateness of disclosures in the Annual Report and

Accounts by comparing the disclosures against the requirements

under International Financial Reporting Standards.

In addition, we worked with our EY specialists to:

–

Assist us in understanding the risks in respect of gaming duties

in jurisdictions where the appropriate tax treatment is uncertain.

Based on our audit

procedures performed, we

concluded that management

have appropriately assessed

and accounted for the

ﬁnancial implications for

non-compliance with laws

and regulations and that

disclosures in the ﬁnancial

statements are appropriate.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

159

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

Revenue recognition

including the risk of

management override

£681.9m (2022: £644.0m)

Refer to the Audit Committee

Report (page 109); Accounting

policies (page 176); and note 2

of the Consolidated Financial

Statements (page 182)

Our assessment is that

the majority of revenue

transactions, for both the

venues and digital businesses,

are non-complex, with no

judgement applied over the

amount recorded.

We consider there is a potential

for management override to

achieve revenue targets via

topside manual journal entries

posted to revenue.

Our procedures were designed to test our assessment that revenue

should be correlated closely to cash banked (for the Retail business),

and to customer balances and cash (for the Digital business),

and to identify the manual adjustments that are made to revenue

for further testing.

We updated our understanding of the revenue processes and

tested certain key ﬁnancial and IT controls over the recognition

and measurement of revenue the areas most susceptible to

management override.

For revenue in each full and speciﬁc scope audit location:

–

We performed walkthroughs of signiﬁcant classes of revenue

transactions to understand signiﬁcant processes and identify

and assess the design effectiveness of key controls.

–

For 99% of revenue we used data analytics tools to perform a

correlation analysis to identify those revenue journals for which

the corresponding entry was not to cash (for Retail) and cash or

customer balances (for Digital). These identiﬁed entries included

VAT, customer incentives, bingo duty and jackpot provisions

and we obtained corroborating evidence for such entries.

–

For a sample forty-four of material customer incentives we

obtained evidence that the expense was correctly netted off

against revenue.

–

We veriﬁed the recognition and measurement of revenue by

tracing a sample of transactions, selected at random throughout

the year, to cash banked to verify the accuracy of reported revenue.

–

For venues, we attended and re-performed cash counts at a sample

of forty-ﬁve casino and bingo venues, selected using a risk-based

approach and also included a random sample, at year end to verify

the appropriate cut-off of revenue.

–

For the Spanish venues, we attended and re-performed cash counts

at a sample of six venues, selected using a risk-based approach

and also included a random sample, at year end to verify the

appropriate cut-off of revenue.

Digital segment speciﬁc procedures:

–

We applied data analytics tools to reperform the monthly

reconciliation between revenue, cash and customer balances.

–

For each brand, using test accounts in the live gaming

environment, we tested the interface between gaming servers,

data warehouse and the accounting system.

Based on our audit

procedures we concluded

that revenue, and

adjustments to revenue, are

appropriately recognised

and recorded.

The Rank Group Plc

Annual Report 2023

160

Independent auditor’s report

Continued

Our application of materiality

We apply the concept of materiality

in planning and performing the audit,

in evaluating the effect of identiﬁed

misstatements on the audit and in forming

our audit opinion.

Materiality

The magnitude of an omission or

misstatement that, individually or in the

aggregate, could reasonably be expected

to inﬂuence the economic decisions of

the users of the ﬁnancial statements.

Materiality provides a basis for

determining the nature and extent

of our audit procedures.

We determined materiality for the Group

to be £3.5 million (2022: £3.5 million),

which is 0.5% (2022: 0.5%) of revenue.

We believe that revenue provides us with

an appropriate measure given the volatility

of the Group’s proﬁtability which is yet to

recover to a level representative of the

scale of the business following the

impact of Covid-19 pandemic enforced

trading restrictions.

We determined materiality for the

Parent Company to be £7.7 million (2022:

£7.7 million), which is 1% (2022: 1%)

of equity. The Parent Company is a

non-trading entity and as such, equity is the

most relevant measure to the stakeholders

of the entity.

Performance materiality

The application of materiality at the

individual account or balance level. It is set

at an amount to reduce to an appropriately

low level the probability that the aggregate

of uncorrected and undetected

misstatements exceeds materiality.

On the basis of our risk assessments,

together with our assessment of the Group’s

overall control environment, our judgement

was that performance materiality was 50%

(2022: 50%) of our planning materiality,

namely £1.8m (2022: £1.8m). We have set

performance materiality at this percentage

to take into account the inherently

high-risk nature of the industry in which

the Group operates as well as the impact

Covid-19 has had on the Group’s

operations. We have also taken into

consideration changes within the Group

and the impact this could have on the

operations of the Group.

Audit work at component locations for the

purpose of obtaining audit coverage over

signiﬁcant ﬁnancial statement accounts is

undertaken based on a percentage of total

performance materiality. The performance

materiality set for each component is

based on the relative scale and risk of the

component to the Group as a whole and

our assessment of the risk of misstatement

at that component. In the current year, the

range of performance materiality allocated

to components was £0.4m to £1.1m

(2022: £0.4m to £1.1m).

Reporting threshold

An amount below which identiﬁed

misstatements are considered as being

clearly trivial.

We agreed with the Audit Committee that

we would report to them all uncorrected

audit differences in excess of £0.2m (2022:

£0.2m), which is set at 5% of planning

materiality, as well as differences below

that threshold that, in our view, warranted

reporting on qualitative grounds.

We evaluate any uncorrected

misstatements against both the

quantitative measures of materiality

discussed above and in light of other

relevant qualitative considerations

in forming our opinion.

Other information

The other information comprises the

information included in the annual report

set out on pages 1 to 152, including the

ﬁve-year review and the shareholder

information set out on pages 218 to 220,

other than the ﬁnancial statements and

our auditor’s report thereon. The directors

are responsible for the other information

contained within the annual report.

Our opinion on the ﬁnancial statements

does not cover the other information and,

except to the extent otherwise explicitly

stated in this report, we do not express any

form of assurance conclusion thereon.

Our responsibility is to read the other

information and, in doing so, consider

whether the other information is materially

inconsistent with the ﬁnancial statements

or our knowledge obtained in the course

of the audit, or otherwise appears to be

materially misstated. If we identify such

material inconsistencies or apparent

material misstatements, we are required

to determine whether this gives rise to

a material misstatement in the ﬁnancial

statements themselves. If, based on the

work we have performed, we conclude that

there is a material misstatement of the

other information, we are required to

report that fact.

We have nothing to report in this regard.

Opinions on other matters

prescribed by the Companies

Act 2006

In our opinion, the part of the directors’

remuneration report to be audited has

been properly prepared in accordance

with the Companies Act 2006.

In our opinion, based on the work

undertaken in the course of the audit:

–

the information given in the strategic

report and the directors’ report for the

ﬁnancial year for which the ﬁnancial

statements are prepared is consistent

with the ﬁnancial statements; and

–

the strategic report and the directors’

report have been prepared in

accordance with applicable legal

requirements.

Matters on which we are required

to report by exception

In the light of the knowledge and

understanding of the group and the parent

company and its environment obtained in

the course of the audit, we have not

identiﬁed material misstatements in the

Strategic Report or the Directors’ Report.

We have nothing to report in respect of the

following matters in relation to which the

Companies Act 2006 requires us to report

to you if, in our opinion:

–

adequate accounting records have not

been kept by the parent company, or

returns adequate for our audit have not

been received from branches not visited

by us; or

–

the parent company ﬁnancial statements

and the part of the Directors’

Remuneration Report to be audited are

not in agreement with the accounting

records and returns; or

–

certain disclosures of directors’

remuneration speciﬁed by law are not

made; or

–

we have not received all the information

and explanations we require for our audit

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

161

Corporate Governance Statement

We have reviewed the directors’ statement

in relation to going concern, longer-term

viability and that part of the Corporate

Governance Statement relating to the

group and company’s compliance with

the provisions of the UK Corporate

Governance Code speciﬁed for our review

by the Listing Rules.

Based on the work undertaken as part

of our audit, we have concluded that each

of the following elements of the Corporate

Governance Statement is materially

consistent with the ﬁnancial statements or

our knowledge obtained during the audit:

–

Directors’ statement with regards to the

appropriateness of adopting the going

concern basis of accounting and any

material uncertainties identiﬁed set

out on page 88;

–

Directors’ explanation as to its

assessment of the company’s prospects,

the period this assessment covers and

why the period is appropriate set out

on page 88;

–

Director’s statement on whether it has

a reasonable expectation that the group

will be able to continue in operation and

meets its liabilities set out on page 88;

–

Directors’ statement on fair, balanced

and understandable set out on page 113;

–

Board’s conﬁrmation that it has carried

out a robust assessment of the emerging

and principal risks set out on page 89;

–

The section of the annual report that

describes the review of effectiveness

of risk management and internal control

systems set out on page 80; and

–

The section describing the work of the

audit committee set out on page 109.

Responsibilities of directors

As explained more fully in the directors’

responsibilities statement set out on

page 152, the directors are responsible for

the preparation of the ﬁnancial statements

and for being satisﬁed that they give a true

and fair view, and for such internal control

as the directors determine is necessary

to enable the preparation of ﬁnancial

statements that are free from material

misstatement, whether due to fraud or error.

In preparing the ﬁnancial statements,

the directors are responsible for assessing

the group and parent company’s ability to

continue as a going concern, disclosing,

as applicable, matters related to going

concern and using the going concern

basis of accounting unless the directors

either intend to liquidate the group or the

parent company or to cease operations, or

have no realistic alternative but to do so.

Auditor’s responsibilities for the

audit of the financial statements

Our objectives are to obtain reasonable

assurance about whether the ﬁnancial

statements as a whole are free from

material misstatement, whether due to

fraud or error, and to issue an auditor’s

report that includes our opinion.

Reasonable assurance is a high level

of assurance, but is not a guarantee that

an audit conducted in accordance with

ISAs (UK) will always detect a material

misstatement when it exists.

Misstatements can arise from fraud

or error and are considered material if,

individually or in the aggregate, they

could reasonably be expected to inﬂuence

the economic decisions of users taken on

the basis of these ﬁnancial statements.

Explanation as to what extent

the audit was considered capable

of detecting irregularities,

including fraud

Irregularities, including fraud, are instances

of non-compliance with laws and

regulations. We design procedures in line

with our responsibilities, outlined above, to

detect irregularities, including fraud. The

risk of not detecting a material misstatement

due to fraud is higher than the risk of not

detecting one resulting from error, as

fraud may involve deliberate concealment

by, for example, forgery or intentional

misrepresentations, or through collusion.

The extent to which our procedures are

capable of detecting irregularities,

including fraud is detailed below.

However, the primary responsibility for

the prevention and detection of fraud rests

with both those charged with governance

of the company and management.

–

We obtained an understanding of the

legal and regulatory frameworks that are

applicable to the Group and determined

that the most signiﬁcant are the

Companies Act 2006, the UK Gambling

Commission, Gambling Act 2005, Money

Laundering regulations, The Alderney

Gambling Control Commission,

The Spanish Gaming Act and License

Conditions & The Code of Practice 2008.

In addition, we concluded that there are

certain signiﬁcant laws and regulations

which may have an effect on the

determination of the amounts and

disclosures in the ﬁnancial statements

being the Listing Rules of the UK

Listing Authority, and those laws and

regulations relating to data protection,

employment law and tax legislation.

The Rank Group Plc

Annual Report 2023

162

Independent auditor’s report

Continued

–

We understood how The Rank Group Plc

is complying with those frameworks

by making enquiries of management,

internal audit, those responsible for

legal and compliance procedures and

the company secretary. We corroborated

our enquiries through our review of

board minutes, papers provided to

the Audit Committee, correspondence

received from regulatory bodies and

information relating to the Group’s

anti-money laundering procedures as

part of our walkthrough procedures.

–

We assessed the susceptibility of the

Group’s ﬁnancial statements to material

misstatement, including how fraud

might occur by meeting with

management within various parts of

the business to understand where they

considered there was susceptibility to

fraud. We also considered performance

targets and their inﬂuence on

management to manage earnings or

inﬂuence the perceptions of analysts.

We considered the programmes and

controls that the Group has established

to address the risk identiﬁed, or that

otherwise prevent, deter and detect

fraud; and how senior management

monitors those programmes and

controls. Where this risk was considered

to be higher, we performed audit

procedures to address each identiﬁed

fraud risk.

–

Based on this understanding we

designed our audit procedures to

identify non-compliance with such

laws and regulations. Our procedures

involved audit procedures in respect of

‘Compliance with laws and regulations’

(as described above) as well review

of board minutes to identify

non-compliance with such laws and

regulations; review of reporting to the

Audit Committee on compliance with

regulations; enquiries with the Groups

general counsel, group management

and Internal audit; testing of manual

journals and review of correspondence

from Regulatory authorities.

–

The Group operates in the gaming

industry which is a highly regulated

environment. The Senior Statutory

Auditor has experience serving clients

in a variety of public UK-listed

companies including those in highly

regulated environments. She reviewed

the experience and expertise of the

engagement team to ensure that the

team had the appropriate competence

and capabilities, which included the use

of experts where appropriate.

–

As the gaming industry is highly

regulated, we have obtained an

understanding of the regulations and

the potential impact on the Group and

in assessing the control environment

we have considered the compliance of

the Group to these regulations as part of

our audit procedures, which included a

review of any signiﬁcant correspondence

received from the regulator.

–

Our overseas teams speciﬁcally reported

on their procedures and ﬁndings in

relation to compliance with the applicable

laws and regulations. These ﬁndings

were discussed with the team and

supporting workpapers reviewed

for a sample of locations.

A further description of our responsibilities

for the audit of the ﬁnancial statements is

located on the Financial Reporting

Council’s website at https://www.frc.org.uk/

auditorsresponsibilities. This description

forms part of our auditor’s report.

Other matters we are required

to address

–

Following a competitive tender process,

we were reappointed by the Company

at its Annual General Meeting on

17 October 2019 to audit the ﬁnancial

statements for the year ending 30 June

2020 and subsequent ﬁnancial periods.

–

The period of total uninterrupted

engagement including previous

renewals and reappointments is fourteen

years, covering the years ending

31 December 2010 to 30 June 2023.

–

The audit opinion is consistent with the

additional report to the audit committee.

Use of our report

This report is made solely to the company’s

members, as a body, in accordance with

Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken

so that we might state to the company’s

members those matters we are required

to state to them in an auditor’s report and

for no other purpose. To the fullest extent

permitted by law, we do not accept or

assume responsibility to anyone other than

the company and the company’s members

as a body, for our audit work, for this

report, or for the opinions we have formed.

Annie Graham

(Senior statutory auditor)

for and on behalf of Ernst & Young LLP,

Statutory Auditor

Glasgow

16 August 2023

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

163

Group income statement

for the year ended 30 June 2023

Year ended 30 June 2023

Year ended 30 June 2022 (restated)

Note

Underlying

£m

Separately

disclosed

items (note 4)

£m

Total

£m

Underlying

£m

Separately

disclosed

items (note 4)

£m

Total

£m

Continuing operations

Revenue

681.9

–

681.9

644.0

–

644.0

Cost of sales

(409.0)

(112.3)

(521.3)

(386.5)

(25.8)

(412.3)

Gross proﬁt (loss)

272.9

(112.3)

160.6

257.5

(25.8)

231.7

Other operating income

–

3.7

3.6

88.3

91.9

Other operating costs

(253.8)

(20.3)

(274.1)

(222.6)

(20.2)

(242.8)

Group operating (loss) proﬁt

2,3

19.1

(128.9)

(109.8)

38.5

42.3

80.8

Financing:

–

ﬁnance costs

(12.6)

–

(12.6)

(13.1)

–

(13.1)

–

ﬁnance income

0.8

–

0.8

0.1

–

0.1

–

other ﬁnancial (losses) gains

(0.5)

(0.6)

(1.1)

(0.4)

5.6

5.2

Total net ﬁnancing (charge) income

(12.3)

(0.6)

(12.9)

(13.4)

5.6

(7.8)

(Loss) proﬁt before taxation

6.8

(129.5)

(122.7)

25.1

47.9

73.0

Taxation

(0.6)

27.7

27.1

(6.4)

(10.5)

(16.9)

(Loss) proﬁt for the year from

continuing operations

6.2

(101.8)

(95.6)

18.7

37.4

56.1

Discontinued operations – proﬁt

–

0.3

–

8.8

(Loss) proﬁt for the year

6.2

(101.5)

(95.3)

18.7

46.2

64.9

Attributable to:

Equity holders of the parent

5.8

(101.5)

(95.7)

18.7

46.2

64.9

Non-controlling interest

0.4

–

0.4

–

6.2

(101.5)

(95.3)

18.7

46.2

64.9

(Loss) earnings per share

attributable to equity shareholders

– basic

1.2p

(21.6)p

(20.4)p

4.0p

9.9p

13.9p

– diluted

1.2p

(21.6)p

(20.4)p

4.0p

9.9p

13.9p

(Loss) earnings per share –

continuing operations

– basic

1.2p

(21.7)p

(20.5)p

4.0p

8.0p

12.0p

– diluted

1.2p

(21.7)p

(20.5)p

4.0p

8.0p

12.0p

Earnings per share –

discontinued operations

– basic

–

0.1p

–

1.9p

– diluted

–

0.1p

–

1.9p

Details of dividends paid and payable to equity shareholders are disclosed in note 8.

The Rank Group Plc

Annual Report 2023

164

Group statement of comprehensive (loss) income

for the year ended 30 June 2023

Note

Year ended

30 June

2023

£m

Year ended

30 June

2022

(restated)

£m

Comprehensive (loss) income:

(Loss) proﬁt for the year

(95.3)

64.9

Other comprehensive income:

Items that may be reclassiﬁed subsequently to proﬁt or loss:

Exchange adjustments net of tax

(0.6)

–

Items that may not be reclassiﬁed subsequently to proﬁt or loss:

Actuarial gain on retirement beneﬁts net of tax

–

0.1

Total comprehensive (loss) income for the year

(95.9)

65.0

Attributable to:

Equity holders of the parent

(96.3)

65.0

Non-controlling interest

0.4

–

(95.9)

65.0

The tax effect of items of comprehensive income is disclosed in note 6.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

165

Balance sheets

at 30 June 2023

Group

Company

Note

As at

30 June

2023

£m

As at

30 June

2022

(restated)

£m

As at

30 June

2023

£m

As at

30 June

2022

£m

Assets

Non-current assets

Intangible assets

456.8

493.6

–

Property, plant and equipment

97.5

113.1

–

Right-of-use assets

64.1

101.6

–

Investments in subsidiaries

–

949.2

1,131.8

Deferred tax assets

7.6

1.4

–

Other receivables

6.2

6.7

–

632.2

716.4

949.2

1,131.8

Current assets

Inventories

2.2

2.3

–

Other receivables

29.1

34.2

–

Government grants

–

Income tax receivable

14.9

8.1

8.3

–

Cash and short-term deposits

60.0

95.7

–

106.2

140.3

8.3

–

Total assets

738.4

856.7

957.5

1,131.8

Liabilities

Current liabilities

Trade and other payables

(126.1)

(131.1)

(0.7)

(0.4)

Lease liabilities

(42.2)

(40.4)

–

Income tax payable

(5.7)

(4.2)

–

Financial liabilities

–

ﬁnancial guarantees

–

(1.6)

(2.6)

–

loans and borrowings

(63.7)

(33.9)

(416.5)

(387.1)

Provisions

(7.3)

(6.9)

–

(0.1)

(245.0)

(216.5)

(418.8)

(390.2)

Net current liabilities

(138.8)

(76.2)

(410.5)

(390.2)

Non-current liabilities

Lease liabilities

(126.8)

(141.3)

–

Financial liabilities

–

loans and borrowings

–

(44.1)

–

Deferred tax liabilities

(1.5)

(20.5)

–

Provisions

(31.7)

(5.6)

(0.2)

(0.9)

Retirement beneﬁt obligations

(3.4)

(3.6)

–

(163.4)

(215.1)

(0.2)

(0.9)

Total liabilities

(408.4)

(431.6)

(419.0)

(391.1)

Net assets

330.0

425.1

538.5

740.7

The Rank Group Plc

Annual Report 2023

166

Group

Company

Note

As at

30 June

2023

£m

As at

30 June

2022

(restated)

£m

As at

30 June

2022

£m

As at

30 June

2021

£m

Capital and reserves attributable to the Company’s equity

shareholders

Share capital

65.0

Share premium

155.7

Capital redemption reserve

33.4

Exchange translation reserve

14.0

14.6

–

Retained earnings

61.6

156.5

284.4

486.6

Total equity before non-controlling interest

329.7

425.2

538.5

740.7

Non-controlling interest

0.3

(0.1)

–

Total shareholders’ equity

330.0

425.1

538.5

740.7

The loss for the year ended 30 June 2023 for the Company was £202.2m (year ended 30 June 2022: loss of £14.5m).

These ﬁnancial statements were approved by the Board on 16 August 2023 and signed on its behalf by:

John O’Reilly

Richard Harris

Chief Executive

Chief Financial Ofﬁcer

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

167

Statements of changes in equity

for the year ended 30 June 2023

Group

capital

£m

premium

£m

Capital

redemption

reserve

£m

Exchange

translation

reserve

£m

Retained

earnings

(loss)

£m

Reserves

attributable

to the Group’s

equity

shareholders

£m

Non-

controlling

interest

£m

Total

equity

£m

At 1 July 2021

(as previously reported)

65.0

155.7

33.4

14.6

92.6

361.3

(0.1)

361.2

Impact of prior period error

(note 1)

–

(0.9)

–

(0.9)

At 1 July 2021 (restated)

65.0

155.7

33.4

14.6

91.7

360.4

(0.1)

360.3

Comprehensive income:

Proﬁt for the year

–

64.9

–

64.9

Other comprehensive

income:

Exchange adjustments

net of tax

–

Actuarial gain on

retirement beneﬁts

net of tax

–

0.1

–

0.1

Total comprehensive

income for the year

–

65.0

–

65.0

Transactions with

owners:

Debit in respect of

employee share schemes

including tax

–

(0.2)

–

(0.2)

At 30 June 2022 (restated)

65.0

155.7

33.4

14.6

156.5

425.2

(0.1)

425.1

Comprehensive income:

Loss for the year

–

(95.7)

0.4

(95.3)

Other comprehensive

income:

Exchange adjustments

net of tax

–

(0.6)

–

(0.6)

–

(0.6)

Actuarial gain on

retirement beneﬁts

net of tax

–

Total comprehensive loss

for the year

–

(0.6)

(95.7)

(96.3)

0.4

(95.9)

Transactions with

owners:

Credit in respect of

employee share schemes

including tax

–

0.8

–

0.8

At 30 June 2023

65.0

155.7

33.4

14.0

61.6

329.7

0.3

330.0

The Rank Group Plc

Annual Report 2023

168

Company

capital

£m

premium

£m

Capital

redemption

reserve

£m

Exchange

translation

reserve

£m

Retained

earnings

(losses)

£m

Reserves

attributable

to the

Company’s

equity

shareholders

£m

Non-

controlling

interest

£m

Total

equity

£m

At 1 July 2021

65.0

155.7

33.4

–

501.1

755.2

–

755.2

Loss and total

comprehensive expense

for the year

–

(14.5)

–

(14.5)

At 30 June 2022

65.0

155.7

33.4

–

486.6

740.7

–

740.7

Loss and total

comprehensive expense

for the year

–

(202.2)

–

(202.2)

At 30 June 2023

65.0

155.7

33.4

–

284.4

538.5

–

538.5

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

169

Statements of cash flow

for the year ended 30 June 2023

Group

Company

Note

Year ended

30 June

2023

£m

Year ended

30 June

2022

(restated)

£m

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Cash ﬂows from operating activities

Cash generated from operations

75.3

170.0

21.3

15.5

Interest received

0.3

5.8

–

Interest paid

(4.9)

(12.1)

(33.7)

(15.5)

Tax (paid) received

(3.2)

(9.9)

12.4

–

Net cash generated from operating activities

67.5

153.8

–

Cash ﬂows from investing activities

Purchase of intangible assets

(13.1)

(14.5)

–

Purchase of property, plant and equipment

(31.0)

(26.1)

–

Proceeds from sale of business

–

8.8

–

Payment of contingent consideration of business combination

(0.4)

(0.6)

–

Net cash used in investing activities

(44.5)

(32.4)

–

Cash ﬂows from ﬁnancing activities

Repayment of term loans

(34.5)

(29.6)

–

Drawdown of revolving credit facilities

22.0

–

Repayment of revolving credit facilities

(4.0)

(11.0)

–

Lease principal payments

(43.6)

(53.7)

–

Net cash used in ﬁnancing activities

(60.1)

(94.3)

–

Net (decrease) increase in cash and short-term deposits

(37.1)

27.1

–

Effect of exchange rate changes

(0.1)

–

Cash and short-term deposits at start of year

95.7

68.7

–

Cash and short-term deposits at end of year

26, 27

58.5

95.7

–

The Rank Group Plc

Annual Report 2023

170

1 General information and

accounting policies

General information

The consolidated ﬁnancial statements of

The Rank Group Plc (‘the Company’) and its

subsidiaries (together ‘the Group’) for the

year ended 30 June 2023 were authorised

for issue in accordance with a resolution

of the Directors on 16 August 2023.

The Company is a public limited company

which is listed on the London Stock

Exchange and is incorporated and

domiciled in England and Wales under

registration number 03140769. The

address of its registered ofﬁce is TOR,

Saint-Cloud Way, Maidenhead, SL6 8BN.

The Group operates gaming services

in Great Britain (including the Channel

Islands), Spain and India. Information

on the Group’s structure, including its

subsidiaries, is provided in note 14.

Summary of significant accounting

policies

The principal accounting policies applied

in the preparation of these consolidated

and Company ﬁnancial statements are

set out below. These policies have been

consistently applied to all periods

presented, except where noted below.

1.1 Basis of preparation

The consolidated and Company ﬁnancial

statements have been prepared under the

historical cost convention.

1.1.1 Statement of compliance

The consolidated and Company ﬁnancial

statements have been prepared in

accordance with UK-adopted International

Accounting Standards. UK-adopted

International Accounting Standards

includes standards issued by the

International Accounting Standards Board

(‘IASB’) that are endorsed for use in the UK.

1.1.2 Going concern

In adopting the going concern basis

for preparing the ﬁnancial information,

the Directors have considered the

circumstances impacting the Group during

the year as detailed in the operating

review on pages 12 to 73, including the

budget for 2023/2024 (‘the base case’),

the long-range forecast approved by the

Board, and recent trading performance.

The Directors have reviewed the Group’s

projected compliance with its banking

covenants and access to funding options

for the 12 months ending 31 August 2024

for the going concern period, and for the

six months beyond the end of the going

concern period for cliff edge events

affecting the going concern period,

such as the availability of revolving credit

facilities or repayments of any term loans.

The Directors recognise that there is

continued uncertainty at this time caused

by the slower than anticipated return

of customers to UK land-based leisure

entertainment venues, the impact of

macroeconomic factors on consumer

sentiment and disposable incomes,

continued inﬂationary pressures and

higher interest rates and their overall

impact on consumer demand and

discretionary spending. The Directors

note that this has had an impact on the

accuracy of budgeting and forecasting

for the current ﬁnancial year, and this

has been considered by management

when preparing their sensitivity review

for the going concern period.

The Directors have reviewed and

challenged management’s assumptions

for the Group’s base case view for the

going concern period. Key considerations

are the assumptions on the levels of

customer visits and their average spend

in the venues-based businesses, and the

number of ﬁrst time and returning

depositors in the digital businesses, and

the average level of spend per visit for

each. The key base case assumptions

on costs are as follows:

–

Payroll costs are adjusted for increases

in the National Minimum Wage and pay

rise awarded in April 2024;

–

Rent due during the 2023/2024 ﬁnancial

year is paid on time;

–

Capital expenditure is in line with

strategic plans;

–

Standard payment terms are assumed

for supplier payments.

The base case view contains certain

discretionary costs within management

control that could be reduced in the event

of a revenue downturn. These include

reductions to overheads, reductions

to marketing costs, reductions to the

venues’ operating costs and reductions

to capital expenditure.

The committed ﬁnancing position in

the base case within the going concern

assessment period is that the Group

continues to have access to the following

committed facilities:

–

Revolving credit facilities (‘RCF’)

totalling £100m are available to the

Group through to November 2024.

–

In November 2024, the facilities

available to the Group reduces to £75m,

maturing in February 2025. Based

on ongoing conversations with lenders

and the improving trading performance

of the Group, management has a

reasonable expectation that there will be

a successful reﬁnancing of the facilities

beyond February 2025.

At the date of approval of the ﬁnancial

statements, £50m of the £100m RCF had

been drawn down in order to repay the

term loan.

In undertaking their assessment, the

Directors also reviewed compliance with

the banking covenants (‘Covenants’)

which are tested bi-annually at June and

December. The Group expects to meet the

Covenants throughout the going concern

period and as at December 2023 and June

2024 and have the cash available to meet

its liabilities as they fall due.

Sensitivity Analysis

The base case view reﬂects the Directors’

best estimate of the outcome for the going

concern period. A number of plausible

but severe downside risks, including

consideration of possible mitigating actions,

have been modelled with particular focus

on the potential impact to cash ﬂows,

cash headroom and covenant compliance

throughout the going concern period.

The three downside scenarios modelled are:

(i)

revenues in the Grosvenor business

fall by 23% and the Group experiences

additional inﬂationary costs compared

to the base case view, with

management taking only mitigating

actions that have no effect on the

Group’s trading performance;

(ii)

revenues in Grosvenor fall by 20%

and Rank Interactive by 7% versus

the base case view, with management

taking a number of mitigating actions

including reduction in capital

expenditure, reduction in marketing

and other overheads and the removal

of the Group planning contingency;

(iii)

a reverse stress test, revenues in

Grosvenor fall by 36% in the initial

year, with management taking actions

as for scenario (ii) but with further

mitigating actions on employment

costs and extending creditor days.

Having modelled the downside scenarios,

the indication is that the Group would

continue to meet its covenant requirements

in all scenarios and have available cash

to meet liabilities in all three scenarios

(for further details see note 20).

Accordingly, the Directors have a

reasonable expectation that the Group

has adequate resources to continue in

operational existence for a period at least

through to 31 August 2024.

Notes to the financial statements

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

171

accounting policies (continued)

For these reasons, the Directors continue

to adopt the going concern basis for the

preparation of these consolidated and

Company ﬁnancial statements, and in

preparing the consolidated and Company

ﬁnancial statements, they do not include

any adjustments that would be required to

be made if they were prepared on a basis

other than going concern.

Going Concern Statement

Based on the Group’s cash ﬂow forecasts

and business plan, the Directors believe

that the Group will generate sufﬁcient cash

to meet its liabilities as they fall due for the

period up to 31 August 2024. In making

such statement, the Directors highlight

forecasting accuracy in relation to the level

of trading performance achieved as the

key sensitivity in the approved base case.

The Directors have considered three

downside scenarios which reﬂects a

reduced trading performance, inﬂationary

impacts on the cost base and various

management-controlled cost mitigations.

In each of the three downside scenarios,

the Group will generate sufﬁcient cash

to meet its liabilities as they fall due and

meet its covenant requirements for the

period to 31 August 2024 with scenarios

ii) and iii) requiring the implementation

and execution of mitigating cost actions

within the control of management.

1.1.3 Accounting estimates and

judgements

In the application of the Group’s

accounting policies, the Directors are

required to make judgements, estimates

and assumptions. The estimates and

associated assumptions are based on

historical experience and other factors

that are considered to be relevant. Actual

results may differ from these estimates.

The estimates and underlying

assumptions are reviewed on an ongoing

basis. Revisions to accounting estimates

are recognised in the period in which the

estimate is revised if the revision affects

only that period. If the revision affects

both current and future periods then the

revision to accounting estimate would be

re-elected in the period of the revision and

future periods.

Critical accounting judgements

The following are the critical accounting

judgements, apart from those involving

estimates (which are dealt with separately

below) that the Directors have made

in the process of applying the Group’s

accounting policies and that have the

most signiﬁcant effect on the amounts

recognised in the consolidated and

Company ﬁnancial statements.

(a) Separately disclosed items

(‘SDIs’)

The Group separately discloses certain

costs and income that impair the visibility

of the underlying performance and trends

between periods. The SDIs are material

and infrequent in nature and/or do not

relate to underlying business

performance. Judgement is required

in determining whether an item should

be classiﬁed as an SDIs or included within

the underlying results.

SDIs include but are not limited to:

– Amortisation of acquired intangible

assets;

–

Proﬁt or loss on disposal of businesses;

– Costs or income associated to the

closure of venues;

– Acquisition and disposal costs

including changes to deferred

or contingent consideration;

– Impairment charges;

– Reversal of previously recognised

impairment charges;

– Property-related provisions;

– Restructuring costs as part of an

announced programme;

– Retranslation and remeasurement

of foreign currency contingent

consideration;

– General dilapidations provision interest

unwinding;

– General dilapidations asset depreciation;

– Discontinued operations;

–

Signiﬁcant, material proceeds from

tax appeals; and

– Tax impact of all the above.

For further detail of those items included

as SDIs, refer to note 4.

(b) Climate change

The Group continues to consider the impact

of climate change in the consolidated and

Company ﬁnancial statements and

considers that the most signiﬁcant impact

would be in relation to the cost of energy

to the Group for which best estimates have

been factored into future forecasts, the

carrying value of assets in the accounts,

albeit this is not considered to have a

material impact at the current time and

the useful economic life of assets.

The Group constantly monitors the

latest government legislation in relation

to climate related matters. The approach

taken by the Group to managing climate

related risks and opportunities is not static

but reﬂects continuous monitoring and

assessment of these issues including their

potential impact upon the business and

the Group’s impact on the environment.

There is no material impact on

impairment, provisions and fair values.

1 General information and

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

172

More details of this approach can be seen

on page 60. At the current time, no

legislation has been passed that will impact

the Group. The Group will adjust key

assumptions in value in use calculations

and sensitise these calculations should

a change be required.

The provision represents the estimated

cost of dilapidation at the end of the lease

term of certain properties. The provision

is reviewed periodically and reﬂects

judgement in the interpretation of lease

terms and negotiation positions with

landlords including the likelihood that the

current leasehold properties may be subject

to redevelopment at the end of lease term.

Key sources of estimation

uncertainty

The estimates and assumptions which

have a signiﬁcant risk of causing a

material adjustment to the carrying

amounts of assets and liabilities within the

next ﬁnancial year are discussed below.

The Group based its assumptions and

estimates on parameters available when

the ﬁnancial statements were prepared.

Existing circumstances and assumptions

about future developments, however,

may change due to market changes or

circumstances arising that are beyond

the control of the Group. Such changes

are reﬂected in the assumptions when

they occur.

(a) Estimated impairment or

subsequent reversal of previously

recognised impairment for non-

financial assets

Details of the Group’s accounting policy

in relation to impairments and impairment

reversals are disclosed in note 1.14.

The application of the policy requires the

use of accounting estimates in determining

the recoverable amount of cash-generating

units to which the goodwill, intangible

assets, right-of-use assets and property,

plant and equipment are associated.

The recoverable amount is the higher

of the fair value less costs of disposal and

value in use. Estimates of fair value less

costs of disposal are performed internally

by experienced senior management

supported by knowledge of similar

transactions and advice from external

experts or, if applicable, offers received.

Value in use is calculated using estimated

cash ﬂow projections from strategic plans

and ﬁnancial budgets, discounted by

selecting an appropriate rate for each

cash-generating unit.

Consistent with the prior year, the Group

has assessed the continuing impact of

COVID-19 risk into the impairment testing

of goodwill and non-current assets and

included additional sensitivity analysis

in the disclosures. The key judgement

is the level of trading in the venues and

its recovery following reopening, overall

macroeconomic conditions and its impact

on estimated future cash ﬂows. Further

details of the assumptions, estimates and

sensitivity are disclosed in note 13.

The Company also tests annually

the carrying value of its investments

in subsidiaries. The application of this

policy requires the use of estimates and

judgements in determining the recoverable

amount of the subsidiary undertakings.

The recoverable amount is determined by

applying an estimated valuation multiple

to budgeted future earnings and

deducting estimated costs of disposal

(fair value less costs of disposal) and/or by

using discounted cash ﬂows (value in use),

along with consideration of the underlying

net assets and market capitalisation and

is disclosed in note 13.

(b) Dilapidation provision

Provisions for dilapidations are recognised

where the Group has the obligation to

make-good its leased properties. These

provisions are measured based on

historically settled dilapidations which

form the basis of the estimated future cash

outﬂows. Any difference between amounts

expected to be settled and the actual cash

outﬂow will be accounted for in the period

when such determination is made.

The Group’s provisions are estimates

of the actual costs and timing of future

cash ﬂows, which are dependent on

future events, property exits and market

conditions. Thus, there is inherently an

element of estimation uncertainty within

the provisions recognised by the Group.

Any difference between expectations and

the actual future liability will be accounted

for in the period when such determination

is made.

The provisions are most sensitive to

estimates of the future cash outﬂows

which are based on historically settled

dilapidations. This means that an increase

in cash outﬂows of 1% would have resulted

to a £0.3m increase in the dilapidations

provision. Likewise, a decrease in cash

outﬂows of 1% would have resulted to

a £0.3m decrease in the dilapidations

provision.

of intangible assets

The Group estimates the fair value of

acquired intangible assets arising from

business combinations by selecting and

applying appropriate valuation methods.

These include the relief from royalty and

multi-period excess earnings valuation

methods, both of which require signiﬁcant

estimates to be made. Examples include

estimating expected cash ﬂows and

identifying appropriate royalty and

discount rates. The fair value of each

acquired intangible asset is amortised

over the respective asset’s estimated

useful life. The Group uses projected

ﬁnancial information together with

comparable industry information as

well as applying its own experience and

knowledge of the industry in making such

judgements and estimates. Where a third

party is involved to determine the fair

value of the acquired intangible assets,

the key assumptions reviewed by the Group

include cash ﬂow projections, terminal

growth rates and discount rates as well

as a sensitivity analysis.

(d) Income taxes

The Group is subject to income taxes in

numerous jurisdictions and as such requires

judgements to be made as well as best

estimates and assumptions.

Judgement must be applied in assessing

the likely outcome of certain tax matters

whose ﬁnal outcome may not be

determined for a number of years. These

judgements are reassessed in each period

until the outcome is ﬁnally determined

through resolution with a tax authority

and/or through a legal process. Differences

arising from changes in judgement or

from ﬁnal resolution may be material and

will be charged or credited to the Group

income statement in the relevant period.

Within the Group’s net income tax

receivable of £9.2m (30 June 2022: £3.9m)

are amounts of £0.3m payable (30 June

2022: £0.3m) that relate to uncertain tax

positions. The Group evaluates uncertain

items, where the tax judgement is subject

to interpretation and remains to be agreed

with the relevant tax authority. Provisions

for uncertain items are made using an

estimation of the most likely tax expected

to be paid, based on a qualitative

assessment of all relevant information.

In assessing the appropriate provision

for uncertain items, the Group considers

progress made in discussions with tax

authorities, expert advice on the likely

outcome and recent developments in case

law. Further details of income tax are

disclosed in note 19.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

173

1.1.4 Changes in accounting policy

and disclosures

(a) Standards, amendments to and

interpretations of existing standards

adopted by the Group

In preparing the consolidated ﬁnancial

statements for the current period, the

Group has adopted the following new

IFRSs, amendments to IFRSs and IFRS

Interpretations Committee (IFRIC)

interpretations. All standards do not have a

signiﬁcant impact on the results or net assets

of the Group. Changes are detailed below:

– Property, plant equipment: proceeds

before intended use (amendment

to IAS 16)

–

Onerous contracts: cost of fulﬁlling

a contact (amendment to IAS 37)

– Interest rate benchmark reform –

Phase 2 (amendment to IAS 39)

– Annual improvements to IFRS Standards

2018 – 2020 (amendment to IFRS 1,

IFRS 9, IFRS 16 and IAS 41)

– Reference to the conceptual framework

(amendment to IFRS 3)

(b) Standards, amendments to and

interpretations of existing standards

that are not yet effective

At the date of authorisation of the

consolidated ﬁnancial statements, the

following Standards, amendments and

Interpretations, which have not been applied

in these consolidated ﬁnancial statements,

were in issue but not yet effective:

– Disclosure of accounting policies

(amendments to IAS 1 and IFRS Practice

Statement 2 effective for period

beginning 1 July 2023)

–

Deﬁnition of accounting estimates

(amendments to IAS 8 effective for

period beginning 1 July 2023)

– Deferred tax related to assets and

liabilities arising from a single transaction

(amendment to IAS 12 effective for

period beginning 1 July 2023)

– Liability in a sale and leaseback

(amendment to IFRS 16 effective

for period beginning 1 July 2024)

–

Classiﬁcation of liabilities as current

and non-current (amendment to IAS 1

effective for period beginning 1 July 2024)

– Insurance contracts (amendment to

IFRS 17 effective for period beginning

1 July 2024).

– Non-current liabilities with Covenants

(amendments to IAS 1 effective for

period beginning 1 July 2024).

The Group does not currently believe

that the adoption of these new standards

or amendments would have a material

effect on the results or ﬁnancial position

of the Group.

1 General information and accounting policies (continued)

1.1.5 Prior period restatement

These consolidated ﬁnancial statements include a prior year restatement in relation to prior year costs identiﬁed in the Digital business

which erroneously had not been recognised in the prior year consolidated income statements. The error was considered to be material

due to its nature and impact to key performance indicators.

During the year, the Group identiﬁed an accumulated total of £2.2m prior year payment processing costs within the Digital business

which erroneously had not been recognised in the prior year income statement. Of the total value, £1.3m relates to the year ended

30 June 2022 with the remaining £0.9m relating to previous accounting periods. As a consequence, cost of sales have been restated

increasing by £1.3m in the year ended 30 June 2022.

The impact of the adjustment on the June 2022 balance sheet is a reduction to cash and short-term deposits of £2.2m, a reduction

to closing reserves as at 30 June 2022 of £2.2m and a reduction to opening reserves as at 1 July 2021 of £0.9m.

The above restatement reduces both basic and diluted EPS by 0.3 pence for the year ended 30 June 2022.

The prior period comparatives have been restated in accordance with IAS 8: ‘Accounting Policies, Changes in Accounting Policies

and Errors’ and have impacted the primary ﬁnancial statements as follows:

Income Statement

for the year ended 30 June 2022

As previously

reported

£m

Adjustment

£m

As restated

£m

Revenue

644.0

–

644.0

Cost of sales

(412.3)

–

(412.3)

Gross proﬁt

231.7

–

231.7

Other operating income

91.9

–

91.9

Other operating costs

(241.5)

(1.3)

(242.8)

Operating proﬁt

82.1

(1.3)

80.8

Financing:

–

ﬁnance costs

(13.1)

–

(13.1)

–

ﬁnance income

0.1

–

0.1

–

other ﬁnancial gains

5.2

–

5.2

Total net ﬁnancing charge

(7.8)

–

(7.8)

Proﬁt before taxation

74.3

(1.3)

73.0

Taxation

(16.9)

–

(16.9)

Proﬁt for the period from continuing operations

57.4

(1.3)

56.1

Proﬁt after tax from discontinued operations

8.8

–

8.8

Proﬁt for the period

66.2

(1.3)

64.9

Earnings per share attributable to equity shareholders

– basic

14.2p

(0.3)p

13.9p

– diluted

14.2p

(0.3)p

13.9p

Earnings per share – continuing operations

– basic

12.3p

(0.3)p

12.0p

– diluted

12.3p

(0.3)p

12.0p

Earnings per share – discontinued operations

– basic

1.9p

–

1.9p

– diluted

1.9p

–

1.9p

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

174

Balance Sheet

at 30 June 2022

As previously

reported

£m

Adjustment

£m

As restated

£m

Assets

Cash and short-term deposits

97.9

(2.2)

95.7

Total assets

858.9

(2.2)

856.7

Total liabilities

(431.6)

–

(431.6)

Net assets

427.3

(2.2)

425.1

Equity

Retained earnings

158.7

(2.2)

156.5

Total equity before non-controlling interests

427.4

(2.2)

425.2

Non-controlling interests

(0.1)

–

(0.1)

Total shareholders’ equity

427.3

(2.2)

425.1

Cashflow statement

for the year ended 30 June 2022

As previously

reported

£m

Adjustment

£m

As restated

£m

Cash ﬂows from operating activities

Cash generated from operations

171.3

(1.3)

170.0

Net cash generated from operating activities

155.1

(1.3)

153.8

Net cash used in investing activities

(32.4)

–

(32.4)

Net cash used from ﬁnancing activities

(94.3)

–

(94.3)

Net increase in cash and short-term deposits

28.4

(1.3)

27.1

Cash and short-term deposit at the start of the period

69.6

(0.9)

68.7

Cash and short-term deposits at end of period

97.9

(2.2)

95.7

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

175

1 General information and

accounting policies (continued)

1.2 Consolidation

The consolidated ﬁnancial statements

comprise the ﬁnancial statements of the

parent and its subsidiaries as at 30 June

2023. Control is achieved when the Group

is exposed, or has rights, to variable

returns from its involvement with the

investee and has the ability to affect

those returns through its power over the

investee. Speciﬁcally, the Group controls

an investee if, and only if, the Group has

(a) power over the investee, (b) exposure,

or rights, to variable returns from the

investee, and (c) ability to use its power

to affect those returns.

The Group re-assesses whether or

not it controls an investee if facts and

circumstances indicate that there are

changes to one or more of the three

elements of control. Consolidation of a

subsidiary begins when the Group obtains

control over the subsidiary and ceases

when the Group loses control of the

subsidiary. Assets, liabilities, income

and expenses of a subsidiary acquired or

disposed of during the year are included

in the consolidated ﬁnancial statements

from the date the Group gains control

until the date the Group ceases to control

the subsidiary.

If the Group loses control of a subsidiary,

it derecognises the related assets

(including goodwill), liabilities and other

components of equity, while any resultant

gain or loss is recognised in the Group

income statement.

Intercompany transactions, balances

and unrealised gains on transactions

between Group companies are eliminated.

Unrealised losses are also eliminated

unless the transaction provides evidence

of an impairment of the asset transferred.

Accounting policies as applied to

subsidiaries have been changed where

necessary to ensure consistency with

the policies adopted by the Group.

The Group has no material associates.

1.3 Business combinations and

goodwill

Business combinations are accounted

for using the acquisition method.

The consideration transferred in a

business combination is measured at

the acquisition date and represents the

aggregate fair value of assets transferred

and liabilities incurred.

Amounts payable in respect of deferred

or contingent consideration are recognised

at fair value at the acquisition date and

included in consideration transferred.

The subsequent unwind of any discount

is recognised as an SDI in ﬁnance cost

in the Group income statement. Other

contingent consideration that either is

within the scope of IFRS 9 or within the

scope of other standards is remeasured

at fair value at each reporting date and

changes in fair value are recognised

as an SDI in the Group income statement.

Changes in the fair value of contingent

consideration recognised as a ﬁnancial

liability that qualify as measurement period

adjustments (being 12 months from the

acquisition date) are adjusted retrospectively,

with corresponding adjustments against

goodwill. Material changes that do not

qualify as measurement period adjustments

are recognised as an SDI in the Group

income statement.

When the Group acquires a business,

it assesses the ﬁnancial assets acquired

and liabilities assumed for appropriate

classiﬁcation and designation in

accordance with the contractual terms,

economic circumstances and pertinent

conditions as at the acquisition date.

Goodwill is initially measured at cost,

being the excess of the aggregate of

the acquisition date fair value of the

consideration transferred over the fair

value of the net identiﬁable amounts of the

assets acquired and the liabilities assumed

in exchange for the business combination.

Identiﬁable intangible assets are

recognised separately from goodwill.

If the aggregate of the acquisition date

fair value of the consideration transferred

is lower than the fair value of the assets,

liabilities and contingent liabilities in

the business acquired, the difference

is recognised through the Group

income statement.

If the initial accounting for a business

combination is incomplete by the end

of the reporting period in which the

combination occurs, the Group reports

provisional amounts for items for which

the accounting is incomplete. Those

provisional amounts are adjusted during

the measurement period (see above),

or additional assets or liabilities are

recognised, to reﬂect new information

obtained about facts and circumstances

that existed at the acquisition date that,

if known, would have affected the amounts

recognised at that date.

Acquisition costs incurred are expensed

as an SDI.

1.4 Revenue recognition

Revenue consists of the fair value of sales

of goods and services net of sales taxes,

rebates and discounts.

The fair value of free bets, promotions and

customer bonuses (‘customer incentives’)

are also deducted from appropriate

revenue streams.

(a) Gaming win – Casino

Revenue for casinos includes gaming win

before deduction of gaming-related duties

for venue and online gaming. Although

disclosed as revenue, gaming win – casino

is accounted for and meets the deﬁnition

of a gain under IFRS 9 ‘Financial

Instruments’. Gaming revenue includes

gains and losses arising where customers

play against the house. Due to the nature

of the transaction, the amount of the

payment the Group may be obliged to pay

to the customer is uncertain. The ﬁnancial

instrument is therefore a derivative and is

initially recognised at fair value and

subsequently remeasured to fair value

with changes in fair value recorded in the

Group income statement. The initial fair

value is generally the amount staked by

the customer and includes adjustment

for customer incentives, such as free bets,

promotions and customer bonuses, where

applicable. The instrument is subsequently

remeasured when the result of the

transaction is known and the amount

payable is conﬁrmed. This movement may

be a gain or a loss. Gains and losses are

offset on the basis that they arise from

similar transactions. Such gains and

losses are recorded in revenue.

(b) Gaming win – Slots and other

digital products

Revenue for bingo is net of customer

contribution to prizes but gross of company

contributed prizes. It is net of any sales taxes

but before deduction of gaming-related

duties. Revenue for poker represents the

rake received. Revenue for other digital

products, including interactive games,

represents gaming win before deduction

of gaming-related duties. The Group’s

income earned from the above items is

recognised when control of the goods or

services are transferred to the customer

and is within the scope of IFRS 15.

Revenue from food, beverage and other

sales is recognised at the point of sale

when control of the goods or services are

transferred to the customer and is within

the scope of IFRS 15.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

176

1.5 Segment reporting

Operating segments are reported in

a manner consistent with the internal

reporting provided to the chief operating

decision-makers. The chief operating

decision-makers, who are responsible

for allocating resources and assessing

performance of the operating segments,

have been identiﬁed as the senior

management team (the composition

of which is disclosed on page 94 and at

www.rank.com), which makes strategic

and operational decisions.

The Group reports ﬁve segments:

Digital, Grosvenor venues, Mecca venues,

Enracha venues and Central costs.

–

UK digital, Enracha digital, YoBingo

and Stride is a single operating segment

which is known as Digital,

–

Grosvenor venues cover all UK casinos,

–

Mecca venues covers all UK bingo halls,

and

–

Enracha venues covers all Spanish-

facing venues.

1.6 Non-current assets held for sale

and discontinued operations

The Group classiﬁes non-current assets

and disposal of an asset as held for sale if

their carrying amounts will be recovered

principally through a sale transaction

rather than through continuing use.

Non-current assets are measured at the

lower of their carrying amount and fair

value less costs to sell. Costs to sell are the

incremental costs directly attributable to

the disposal of an asset, excluding ﬁnance

costs and income tax expense.

The criteria for held for sale classiﬁcation

is regarded as met only when the sale is

highly probable and the asset is available

for immediate sale in its present condition.

Actions required to complete the sale

should indicate that it is unlikely that

signiﬁcant changes to the sale will be

made or that the decision to sell will be

withdrawn. Management must be

committed to the plan to sell the asset and

the sale expected to be completed within

one year from the date of the classiﬁcation.

Property, plant and equipment, right-of-

use assets and intangible assets are not

depreciated or amortised once classiﬁed

as held for sale.

Assets and liabilities classiﬁed as held for

sale are presented separately as current

items in the balance sheets.

Discontinued operations are excluded

from the results of continuing operations

and are presented as a single amount as

proﬁt or loss after tax from discontinued

operations in the Group income statement.

1.7 Foreign currency translation

The consolidated and Company ﬁnancial

statements are presented in UK sterling

(‘the presentation currency’), which is

also the Company’s functional currency.

Items included in the ﬁnancial statements

of each of the Group’s entities are measured

using the currency of the primary economic

environment in which the entity operates

(‘the functional currency’).

(a) Transactions and balances

Foreign currency transactions are

translated into the functional currency

using the exchange rates prevailing at the

date of the transactions. Foreign exchange

gains and losses resulting from the

settlement of such transactions and

from the translation at year-end exchange

rates of monetary assets and liabilities

denominated in foreign currencies are

recognised in the Group income statement

in ﬁnance costs or income.

(b) Group companies

The results and ﬁnancial position of all the

Group companies (none of which has the

currency of a hyper-inﬂationary economy)

that have a functional currency different

from the presentation currency are

translated into the presentation currency

as follows:

(i)

assets and liabilities for each balance

sheet presented are translated at the

closing rate on the balance sheet date.

The closing euro rate against UK

sterling was 1.16 (30 June 2022: 1.16);

(ii)

income and expenses for each income

statement are translated at average

exchange rates unless this average

is not a reasonable approximation

of the cumulative effect of the rates

prevailing on the transaction dates,

in which case income and expenses

are translated at the rates prevailing

on the dates of the transactions. The

average euro rate against UK sterling

was 1.15 (year ended 30 June 2022:

1.21); and

(iii)

all resulting exchange differences are

recognised as a separate component

of equity.

When a foreign operation is sold, such

exchange differences are recognised in

the Group income statement, as part of the

gain or loss on sale. Goodwill and fair

value adjustments arising on the

acquisition of a foreign entity are treated

as assets and liabilities of the foreign

entity and translated at the closing rate.

1.8 Financial assets

Financial assets within the scope of IFRS 9

are classiﬁed as ﬁnancial assets at initial

recognition, as subsequently measured at

amortised cost, fair value through other

comprehensive income (‘OCI’), and fair

value through proﬁt or loss.

The classiﬁcation of ﬁnancial assets

at initial recognition depends on the

ﬁnancial asset’s contractual cash ﬂow

characteristics and the Group’s business

model for managing them. The Group

initially measures a ﬁnancial asset at its

fair value plus, in the case of a ﬁnancial

asset not at fair value through proﬁt or

loss, transaction costs.

In order for a ﬁnancial asset to be

classiﬁed and measured at amortised cost

or fair value through OCI, it needs to give

rise to cash ﬂows that are ‘solely payments

of principal and interest (‘SPPI’)’ on the

principal amount outstanding. This

assessment is referred to as the SPPI test

and is performed at an instrument level.

For purposes of subsequent measurement,

ﬁnancial assets are classiﬁed in two

categories:

–

Financial assets designated at fair

value through OCI with no recycling

of cumulative gains and losses upon

derecognition (equity instruments); and

–

Financial assets at fair value through

proﬁt or loss.

(a) Financial assets designated

at fair value through OCI

(equity instruments)

Upon initial recognition, the Group

can elect to classify irrevocably its equity

investments as equity instruments

designated at fair value through OCI

when they meet the deﬁnition of equity

under IAS 32 Financial Instruments:

Presentation and are not held for trading.

The classiﬁcation is determined on an

instrument-by-instrument basis. Gains

and losses on these ﬁnancial assets are

never recycled to proﬁt or loss. Dividends

are recognised as other income in the

Group income statement when the right

of payment has been established, except

when the Group beneﬁts from such

proceeds as a recovery of part of the

cost of the ﬁnancial asset, in which case,

such gains are recorded in OCI. Equity

instruments designated at fair value

through OCI are not subject to impairment

assessment. The Group elected to classify

its non-listed equity investments under

this category.

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Overview

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Notes to the financial statements

Continued

The Rank Group Plc

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178

1 General information and

accounting policies (continued)

(b) Financial assets at fair value

through profit or loss

Financial assets at fair value through proﬁt

or loss include ﬁnancial assets held for

trading, ﬁnancial assets designated upon

initial recognition at fair value through

proﬁt or loss, or ﬁnancial assets mandatorily

required to be measured at fair value.

Financial assets are classiﬁed as held for

trading if they are acquired for the purpose

of selling or repurchasing in the near

term. Financial assets with cash ﬂows that

are not solely payments of principal and

interest are classiﬁed and measured at fair

value through proﬁt or loss, irrespective

of the business model. Financial assets at

fair value through proﬁt or loss are carried

in the Balance sheet at fair value with net

changes in fair value recognised in the

Group income statement.

Derecognition

A ﬁnancial asset (or, where applicable,

a part of a ﬁnancial asset or part of a group

of similar ﬁnancial assets) is primarily

derecognised (i.e. removed from the

Group’s Balance sheet) when:

–

The rights to receive cash ﬂows from

the asset have expired; or

– The Group has transferred its rights

to receive cash ﬂows from the asset

or has assumed an obligation to pay

the received cash ﬂows in full without

material delay to a third party.

1.9 Financial liabilities

Financial liabilities within the scope of

IFRS 9 are classiﬁed, at initial recognition,

as ﬁnancial liabilities at fair value through

proﬁt or loss, loans and borrowings or

payables. All ﬁnancial liabilities are

recognised initially at fair value and,

in the case of loans and borrowings

and payables, net of directly attributable

transaction costs. The Group and

Company’s ﬁnancial liabilities include

trade and other payables, loans and

borrowings including bank overdrafts

and ﬁnancial guarantee contracts.

The subsequent measurement of ﬁnancial

liabilities depends on their classiﬁcation,

as described below:

(a) Financial liabilities at fair value

through profit or loss

Financial liabilities at fair value through

proﬁt or loss include ﬁnancial liabilities

held for trading and ﬁnancial liabilities

designated upon initial recognition as at

fair value through proﬁt or loss. Gains or

losses on liabilities held for trading are

recognised in the Group income statement.

Financial liabilities designated upon initial

recognition at fair value through proﬁt or

loss are designated at the initial date

of recognition, and only if the criteria

in IFRS 9 are satisﬁed.

(b) Financial liabilities at amortised

cost (loans and borrowings)

After initial recognition, interest-bearing

loans and borrowings are subsequently

measured at amortised cost using the

effective interest rate (‘EIR’) method.

Gains and losses are recognised in

the Group income statement when the

liabilities are derecognised as well as

through the EIR amortisation process.

Amortised cost is calculated by taking

into account any discount or premium

on acquisition and fees or costs that

are an integral part of the EIR. The EIR

amortisation is included as ﬁnance costs

in the Group income statement.

(Company only)

Financial guarantee contracts issued

by the Company are those contracts

that require a payment to be made to

reimburse the holder for a loss it incurs

because the speciﬁed debtor fails to make

a payment when due in accordance with

the terms of a debt instrument. Financial

guarantee contracts are initially measured

at fair value by applying the estimated

probability of default to the cash outﬂow

should default occur and subsequently

amortising over the expected length of the

guarantee, to the extent that the guarantee

is not expected to be called. Subsequently,

the liability is measured at the higher

of the best estimate of the expenditure

required to settle the present obligation

at the reporting date or the amount

recognised less cumulative amortisation.

Derecognition

A ﬁnancial liability is derecognised

when the obligation under the liability

is discharged or cancelled or expires.

When an existing ﬁnancial liability

is replaced by another from the same

lender on substantially different terms,

or the terms of an existing liability are

substantially modiﬁed, such an exchange

or modiﬁcation is treated as the

derecognition of the original liability

and the recognition of a new liability.

The difference in the respective carrying

amounts is recognised in the Group

income statement.

Offsetting of financial instruments

Financial assets and ﬁnancial liabilities

are offset and the net amount is reported

in the Balance sheet if there is a

currently enforceable legal right to

offset the recognised amounts and there

is an intention to settle on a net basis,

to realise the assets and settle the

liabilities simultaneously.

1.10 Leases

The Group leases various properties

and equipment. Rental contracts are made

for various ﬁxed periods. Lease terms are

negotiated on an individual basis and

contain a wide range of different terms

and conditions. The lease agreements

do not impose any covenants, but leased

assets may not be used as security for

borrowing purposes.

The Group assesses at contract inception

whether a contract is, or contains, a lease.

That is, if the contract conveys the right to

control the use of an identiﬁed asset for a

period of time in exchange for consideration.

Leases are recognised as a right-of-use

asset and a corresponding liability at the

date at which the leased asset is available

for use by the Group. Each lease payment

is allocated between the liability and

ﬁnance cost. The ﬁnance cost is charged

to the Group income statement over the

lease period so as to produce a constant

periodic rate of interest on the remaining

balance of the liability for each period.

The right-of-use asset is depreciated over

the shorter of the asset’s useful life and

the lease term on a straight-line basis.

Assets and liabilities arising from a lease

are initially measured on a present value

basis. Lease liabilities, where applicable,

include the net present value of the

following lease payments:

– Fixed payments (including in-substance

ﬁxed payments), less any lease

incentives receivable;

– Variable lease payments that are based

on an index or a rate;

– Amounts expected to be payable by the

lessee under residual value guarantees;

– The exercise price of a purchase option

if the lessee is reasonably certain to

exercise that option; and

– Payments of penalties for terminating

the lease, if the lease term reﬂects the

lessee exercising that option.

Variable lease payments that are not based

on an index or a rate are not part of the

lease liability, but they are recognised

in the Group income statement when the

event or condition that triggers those

payments occurs.

The carrying amount of lease liabilities

is remeasured if there is a modiﬁcation,

a change in the lease term, a change

in the lease payments or a change in the

assessment of an option to purchase the

underlying asset.

The lease payments are discounted

using the interest rate implicit in the

lease. If that rate cannot be determined,

the lessee’s incremental borrowing rate is

used, being the rate that the lessee would

have to pay to borrow the funds necessary

to obtain an asset of similar value in a

similar economic environment with

similar terms and conditions.

Right-of-use assets, where applicable, are

measured at cost comprising the following:

– The amount of the initial measurement

of lease liability;

– Any lease payments made at or before

the commencement date less any lease

incentives received; and

– Any initial direct costs.

The depreciation period for the right-of-

use asset is from the lease commencement

date to the earlier of the end of the lease

term or the end of the useful life of the

asset, as follows:

– Land and buildings up to 32 years; and

– Fleet and machines up to 5 years.

Payments associated with short-term

leases and leases of low-value assets are

recognised on a straight-line basis as an

expense in the Group income statement.

Short-term leases are leases with a lease

term of 12 months or less. In determining

the lease term, management considers

all facts and circumstances that create

an economic incentive to exercise an

extension option. Extension options are

only included in the lease term if the lease

is reasonably certain to be extended (or not

terminated). The assessment is reviewed if

a signiﬁcant event or a signiﬁcant change

in circumstances occurs which affects this

assessment and that is within the control

of the Group as a lessee.

Where appropriate the Group will sub-let

properties which are vacant in order to

derive lease income, which is shown net

of lease costs.

1.11 Provisions, contingent liabilities

and regulatory matters

Provisions are recognised when the

Group has a present legal or constructive

obligation as a result of past events, it is

more likely than not that an outﬂow of

resources will be required to settle the

obligation and the amount can be reliably

estimated. Provisions are measured at the

best estimate of the expenditures required

to settle the obligation. If the effect of the

time value of money is material, provisions

are discounted using a pre-tax rate that

reﬂects, where appropriate, the risks

speciﬁc to the liability. Where discounting

is used, the increase in the provision due

to the passage of time is recognised as

a ﬁnance cost.

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Overview

179

Contingent liabilities are possible

obligations and present obligations that

are not probable or not reliably measurable.

Contingent liabilities are disclosed but not

accounted for. However, disclosure is not

required if payment is remote. The Group’s

policy is to engage collaboratively with

regulators and address any concerns raised

as soon as possible. The Group takes legal

advice, as appropriate, as to the manner in

which it should respond to matters raised

and the potential outcome. However, for

the majority of these matters, the Board

is unable to quantify reliably the likelihood,

timing and outﬂow of funds that may

result, if any. For material matters where

an outﬂow of funds is probable and can

be measured reliably based on the latest

information available at the reporting date,

amounts have been recognised in the

consolidated and Company ﬁnancial

statements within Provisions.

1.12 Property, plant and equipment

Property, plant and equipment is stated

at cost, net of accumulated depreciation

and impairment. Such cost includes

expenditure that is directly attributable

to the acquisition of the items. Subsequent

costs are included in the asset’s carrying

amount or recognised as a separate asset,

as appropriate, only when it is probable

that future economic beneﬁts associated

with the item will ﬂow to the Group and the

cost of the item can be measured reliably.

All other repairs and maintenance are

charged to the income statement during the

ﬁnancial period in which they are incurred.

Depreciation is calculated on assets using

the straight-line method to allocate their

cost less residual values over their

estimated useful lives, as follows:

Freehold and

50 years or lease

leasehold property

term if less

Refurbishment of

5 to 20 years or

property

lease term

Fixtures, ﬁttings, plant

and machinery

3 to 20 years

Land is not depreciated.

Residual values and useful lives are

reviewed at each balance sheet date, and

adjusted prospectively, if appropriate.

An item of property, plant and equipment

is derecognised upon disposal or when

no future economic beneﬁts are expected

from its use or disposal. Any gain or loss

arising on derecognition of the asset

(calculated as the difference between the

net disposal proceeds and the carrying

amount of the asset) is included in the

Group income statement.

Pre-opening costs are expensed to the

Group income statement as incurred.

Assets under construction included in

property, plant and equipment are amounts

relating to expenditure for assets in the

course of construction.

1.13 Intangible assets

(a) Goodwill

Goodwill represents the excess of the fair

value of the consideration transferred over

the fair value of the Group’s share of the

net identiﬁable assets less the liabilities

assumed at the date of acquisition.

Goodwill on acquisitions is included in

intangible assets. Goodwill is tested

annually for impairment and is allocated to

the relevant cash-generating unit or group

of cash-generating units for the purpose of

impairment testing. A cash-generating unit

is the smallest identiﬁable group of assets

that generates cash inﬂows, that are largely

independent of the cash inﬂows from other

assets or groups of assets. After initial

recognition, goodwill is measured at cost

less any accumulated impairment losses.

(b) Casino and other gaming

licences and concessions

The Group capitalises acquired casino and

other gaming licences and concessions.

Management believes that casino and

other gaming licences, with the exception

of seven (7) venues in Enracha, have

indeﬁnite lives as there is no foreseeable

limit to the period over which the licences

are expected to generate net cash inﬂows

and each licence holds a value outside the

property in which it resides. Each licence

is reviewed annually for impairment.

Costs that are directly associated with the

production and development of identiﬁable

and unique software products controlled

by the Group, and that are expected to

generate economic beneﬁts exceeding

costs beyond one year, are recognised

as intangible assets for both externally

purchased and internally developed

software. Direct costs include speciﬁc

employee costs for software development.

Software acquired as part of a business

combination is recognised at fair value

at the date of acquisition.

Costs associated with maintaining

computer software programmes are

recognised as an expense as incurred.

(d) Brands

Represents the fair value of brands and

trademark assets acquired in business

combinations at the acquisition date.

1 General information and

accounting policies (continued)

(e) Customer relationships

Represents the fair value of customer

relations acquired in business

combinations at the acquisition date.

Amortisation is recognised on a straight-

line basis over the estimated useful life

of intangible assets unless such lives are

indeﬁnite. The estimated useful lives

are as follows:

Casino and other

10 years or

gaming licences

indeﬁnite

Software and

developments

3 to 5 years

Brands

10 years

Customer

relationships

4 years

1.14 Impairment or subsequent

reversal of previously recognised

impairment for non-financial assets

Assets that have an indeﬁnite useful life are

not subject to depreciation or amortisation

and are tested annually for impairment.

Assets that are subject to depreciation or

amortisation are reviewed for impairment

whenever events or changes in

circumstances indicate that the carrying

amount may not be recoverable or where

they indicate a previously recognised

impairment may no longer be required.

An impairment loss is recognised as

the amount by which an asset’s carrying

amount exceeds its recoverable amount.

The recoverable amount is the higher of an

asset’s fair value less costs of disposal and

value in use. For the purposes of assessing

impairment, assets are grouped at the

lowest levels for which there are separately

identiﬁable cash inﬂows (cash-generating

units). The expected cash ﬂows generated

by the assets are discounted using

appropriate discount rates that reﬂect the

time value of money and risks associated

with the groups of assets.

If an impairment loss is recognised,

the carrying amount of the asset

(cash-generating unit) is reduced to its

recoverable amount. An impairment loss

is recognised as an expense in the Group

income statement immediately.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

180

Any impairment is allocated pro-rata

across all assets in a cash-generating unit

unless there is an indication that a class

of asset should be impaired in the ﬁrst

instance or a fair market value exists for

one or more assets. Once an asset has

been written down to its fair value less

costs of disposal then any remaining

impairment is allocated equally amongst

all other assets.

Where an impairment loss subsequently

reverses, the carrying amount of the asset

(cash-generating unit) is increased to the

revised estimate of its recoverable amount,

but only to the extent that the increased

carrying amount does not exceed the

carrying amount that would have been

determined had no impairment loss been

recognised for the asset (cash-generating

unit) in prior years. Reversals are

allocated pro-rata across all assets in

the cash-generating unit unless there

is an indication that a class of asset should

be reversed in the ﬁrst instance or a fair

market value exists for one or more

assets. A reversal of an impairment loss

is recognised in the Group income

statement immediately.

An impairment loss recognised for goodwill

is never reversed in subsequent periods.

1.15 Employee benefit costs

(a) Pension obligations

The Group operates a deﬁned contribution

plan under which the Group pays ﬁxed

contributions to a separate entity. The

Group has no further payment obligations

once the contributions have been paid.

The contributions are recognised as

employee beneﬁt expense when they

are due.

The Group also has an unfunded pension

commitment relating to three former

Executives of the Group. The amount

recognised in the balance sheet in respect

of the commitment is the present value

of the obligation at the balance sheet date,

together with adjustment for actuarial

gains or losses. The Group recognises

actuarial gains and losses immediately

in the Group statement of other

comprehensive income. The interest cost

arising on the commitment is recognised

in net ﬁnance costs.

(b) Share-based compensation

The Group operates share-based payment

schemes for employees of its subsidiaries

whereby the Company makes awards

of its own shares to employees of its

subsidiaries, and as such recognises

an increase in the cost of investment

in its subsidiaries equivalent to the

equity-settled share-based payment charge

recognised in its subsidiaries’ ﬁnancial

statements, with the corresponding credit

being recognised directly in equity.

The cost of equity-settled transactions

with employees for awards is measured

by reference to the fair value at the date

on which they are granted. The fair value

is determined by using an appropriate

pricing model.

The cost of equity-settled transactions is

recognised, together with a corresponding

increase in equity, over the period in which

the performance and/or service conditions

are fulﬁlled (the vesting period). The

cumulative expense recognised for

equity-settled transactions at each

reporting date until the vesting date

reﬂects the extent to which the vesting

period has expired and the Group’s

best estimate of the number of equity

instruments that will ultimately vest.

The income statement expense or credit

for a period represents the movement

in cumulative expense recognised as

at the beginning and end of that period.

No expense is recognised for awards that

do not ultimately vest, except for equity-

settled transactions where vesting is

conditional upon a market or non-vesting

condition, which are treated as vesting

irrespective of whether or not the market

or non-vesting condition is satisﬁed,

provided that service conditions are

also satisﬁed.

Where the terms of an equity-settled

transaction award are modiﬁed, the

minimum expense recognised is the

expense as if the terms had not been

modiﬁed, if the original terms of the

award are met. An additional expense

is recognised for any modiﬁcation that

increases the total fair value of the

share-based payment transaction or

is otherwise beneﬁcial to the employee

as measured at the date of modiﬁcation.

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Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

181

Where an equity-settled award is

cancelled, it is treated as if it vested on the

date of cancellation, and any expense not

yet recognised for the award is recognised

immediately. This includes any award

where non-vesting conditions within the

control of either the entity or the employee

are not met. However, if a new award is

substituted for the cancelled award, and

designated as a replacement award on the

date that it is granted, the cancelled and

new awards are treated as if they were

a modiﬁcation of the original award, as

described in the previous paragraph. All

cancellations of equity-settled transaction

awards are treated equally, regardless of

whether the entity or the employee cancels

the award.

The dilutive effect of outstanding options

is reﬂected as additional share dilution

in the computation of diluted earnings

per share.

The proceeds received net of any directly

attributable transaction costs are credited

to share capital (nominal value) and share

premium when the options are exercised.

The Group recognises a liability in respect

of the best estimate of bonuses payable

where contractually obliged to do so or

where a past practice has created a

constructive obligation.

1.16 Cash and short-term deposits

Cash comprises cash in hand, balances

with banks and on-demand deposits,

and cash with payment service providers.

Short-term deposits are short term, highly

liquid investments that are readily

convertible to known amounts of cash.

They include short-term deposits

originally purchased with maturities

of three months or less.

1.17 Inventories

Inventories are valued at the lower of cost

and net realisable value. Cost of inventory

is determined on a ‘ﬁrst-in, ﬁrst-out’ basis.

The cost of ﬁnished goods comprises

goods purchased for resale.

Net realisable value is the estimated selling

price in the ordinary course of business.

When necessary, provision is made for

obsolete and slow-moving inventories.

1.18 Taxation

(a) Current tax

Current tax assets and liabilities for the

current and prior periods are measured

as the amount expected to be paid or to

be recovered from the taxation authorities.

The tax rates and tax laws used to compute

the amount are those that are enacted,

or substantively enacted, by the

reporting date.

Current tax relating to items recognised

directly in equity is recognised in equity

and not the income statement.

Management evaluates positions taken

in the tax returns with respect to situations

in which applicable tax regulations

are subject to interpretation at each

reporting date and establishes provisions

where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability

method on temporary differences arising

between the tax bases of assets and

liabilities and their carrying amounts in the

ﬁnancial statements. However, if deferred

tax arises from the initial recognition of an

asset or liability in a transaction, other than

a business combination, that at the time of

the transaction affects neither accounting

nor taxable proﬁt or loss, it is not accounted

for. Deferred tax is determined using tax

rates (and laws) that have been enacted or

substantively enacted by the balance sheet

date and are expected to apply when the

related deferred tax asset is realised or

the deferred tax liability is settled.

Deferred tax assets are recognised to the

extent that it is probable that future taxable

proﬁt will be available against which the

temporary differences can be utilised.

Deferred tax assets and liabilities are

offset when there is a legally enforceable

right to set off current taxation assets

against current taxation liabilities and it is

the intention to settle these on a net basis.

Deferred tax is provided on temporary

differences arising on investments in

subsidiaries, except where the timing of

the reversal of the temporary difference is

controlled by the Group and it is probable

that the temporary difference will not

reverse in the foreseeable future.

Revenues, expenses and assets are

recognised net of the amount of sales

tax except:

– Where the sales tax incurred on a

purchase of assets or services is not

recoverable from the taxation authority,

in which case the sales tax is recognised

as part of the cost of acquisition of the

asset or as part of the expense item

as applicable; and

– For receivables and payables that

are stated with the amount of sales

tax included.

The net amount of sales tax recoverable

from, or payable to, the taxation authority

is included as part of receivables or

payables in the balance sheet.

1.19 Share capital

Ordinary shares are classiﬁed as equity.

1.20 Dividends

Dividends proposed by the Board of

Directors and unpaid at the period end are

not recognised in the ﬁnancial statements

until they have been approved by

shareholders at the Annual General

Meeting. Interim dividends are recognised

when paid.

1.21 Separately disclosed items

The Group separately discloses those

items which are required to give a full

understanding of the Group’s ﬁnancial

performance and aid comparability of the

Group’s result between periods. Such

items are considered by the Directors to

require separate disclosure due to their

size or nature in relation to the Group.

1.22 Government grants

Government grants are recognised where

there is reasonable assurance that the

grant will be received, and all attached

conditions will be complied with. When

the grant relates to an expense item, it

is recognised as income on a systematic

basis that the related costs, for which it

is intended to compensate, are expensed.

2 Segmental reporting

(a) Segment information – operating segments

Year ended 30 June 2023

Digital

£m

Grosvenor

Venues

£m

Mecca

Venues

£m

Enracha

Venues

£m

Central

Costs

£m

Total

£m

Continuing operations

Revenue

202.9

306.3

136.3

36.4

–

681.9

Other operating income

–

Underlying operating proﬁt (loss)

13.8

16.3

(7.0)

9.1

(13.1)

19.1

Separately disclosed items

(9.1)

(51.7)

(67.1)

(4.2)

3.2

(128.9)

Segment result

4.7

(35.4)

(74.1)

4.9

(9.9)

(109.8)

Finance costs

(12.6)

Finance income

0.8

Other ﬁnancial losses

(1.1)

Loss before taxation

(122.7)

Taxation

27.1

Loss for the year from continuing operations

(95.6)

Other segment items – continuing operations

Capital expenditure

(10.6)

(19.5)

(12.5)

(1.2)

(0.3)

(44.1)

Depreciation and amortisation

(14.3)

(28.8)

(10.9)

(1.5)

(2.5)

(58.0)

SDI from continuing operations

Impairment charges

–

(53.3)

(61.5)

(4.1)

–

(118.9)

Impairment reversals

–

6.6

–

6.6

Closure of venues

–

(3.0)

(4.6)

(0.1)

–

(7.7)

Amortisation of acquired intangible assets

(8.6)

–

(8.6)

Integration costs

(0.1)

–

(0.1)

Business transformation costs

(0.4)

(0.6)

(0.5)

–

(0.5)

(2.0)

Property-related provisions

–

(1.4)

(0.5)

–

(1.9)

Disposal release

–

3.7

Year ended 30 June 2022 (restated and re-presented*)

Digital

£m

Grosvenor

Venues

£m

Mecca

Venues

£m

Enracha

Venues

£m

Central

Costs

£m

Total

£m

Continuing operations

Revenue

183.3

296.6

134.0

30.1

–

644.0

Other operating income

–

2.6

1.0

–

3.6

Underlying operating proﬁt (loss)*

13.3

36.2

(7.7)

7.4

(10.7)

38.5

Separately disclosed items

(14.5)

15.5

34.4

7.6

(0.7)

42.3

Segment result

(1.2)

51.7

26.7

15.0

(11.4)

80.8

Finance costs

(13.1)

Finance income

0.1

Other ﬁnancial gains

5.2

Proﬁt before taxation

73.0

Taxation

(16.9)

Proﬁt for the year from continuing operations

56.1

Other segment items – continuing operations

Capital expenditure

(15.2)

(14.0)

(8.0)

(1.1)

(2.3)

(40.6)

Depreciation and amortisation

(13.2)

(32.4)

(15.1)

(1.3)

(5.4)

(67.4)

SDI from continuing operations

VAT claim – net of costs

–

29.8

47.7

–

(0.4)

77.1

Impairment charges

–

(26.9)

(20.9)

–

(47.8)

Impairment reversals

–

13.3

–

8.7

–

22.0

Property-related provisions

–

10.4

–

10.4

Amortisation of acquired intangible assets

(11.7)

–

(11.7)

Closure of venues

–

(0.7)

(2.8)

(1.1)

–

(4.6)

Integration costs

(2.8)

–

(2.8)

Gain on remeasurement of previously existing interest

in joint venture

0.8

–

0.8

Business transformation costs

(0.7)

–

(0.3)

(1.0)

Acquisition and disposal costs

(0.1)

–

(0.1)

During the year, the Group undertook a review of the Group’s central costs and has concluded that a proportion of them, which are directly attributable to the

relevant business units, should be allocated to those business units, better reﬂecting the underlying proﬁtability of each segment. This resulted in changes

in the underlying proﬁt (loss) of each business segment in the prior year which has been re-presented in the table above.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

182

The Group reports segmental information on the basis by which the chief operating decision-makers utilise internal

reporting within the business.

Other operating income for prior years related to Government grants received from reimbursement of employee costs relating

to staff furloughed due to COVID-19 under the Coronavirus Job Retention Scheme, Local Restrictions Support Grants and

Restart Grants to support businesses during national lockdown periods and periods of local restrictions.

Assets and liabilities have not been segmented as this information is not provided to the chief operating decision-makers

on a regular basis.

Capital expenditure comprises cash expenditure on property, plant and equipment and other intangible assets.

(b) Geographical information

The Group operates in three main geographical areas (UK, Continental Europe and Rest of World).

(i) Revenue from customers by geographical area based on location of customer

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

616.0

588.7

Continental Europe

60.5

51.0

Rest of World

5.4

4.3

Total revenue

681.9

644.0

(ii) Non-current assets by geographical area based on location of assets

As at

30 June

2023

£m

As at

30 June

2022

£m

562.0

641.3

Continental Europe

70.2

75.1

Total non-current assets

632.2

716.4

With the exception of the UK, no individual country contributed more than 15% of consolidated sales or assets.

Revenue

Proﬁt

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Year ended

30 June

2023

£m

Year ended

30 June 2022

(restated)

£m

Exchange translation reserve

681.9

644.0

(95.6)

56.1

Retained earnings

–

0.3

8.8

681.9

644.0

(95.3)

64.9

(d) Total revenue by income stream

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Revenue recognised under IFRS 9

Gaming win – Casino

552.1

496.8

Revenue recognised under IFRS 15

Gaming win – Bingo

61.8

79.5

Gaming win – Poker

18.9

19.1

Gaming win – other digital products

5.4

4.3

Food and beverage

39.1

39.0

Other

4.6

5.3

Total revenue recognised under IFRS 15

129.8

147.2

Total revenue

681.9

644.0

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

183

2 Segmental reporting (continued)

(e) Total cost analysis by segment

To increase transparency, the Group has decided to include additional disclosure analysing total costs by type and segment.

A reconciliation of total costs, before SDI, by type and segment is as follows:

Year ended 30 June 2023

Digital

£m

Grosvenor

Venues

£m

Mecca

Venues

£m

Enracha

Venues

£m

Central

Costs

£m

Total

£m

Employment and related costs

28.1

122.0

46.1

17.7

7.7

221.6

Taxes and duties

47.7

64.2

27.1

2.0

1.2

142.2

Direct costs

57.1

28.2

20.6

3.0

–

108.9

Depreciation and amortisation

14.3

28.8

10.9

1.5

2.5

58.0

Marketing

33.3

6.2

5.7

2.4

0.2

47.8

Property costs

0.8

11.6

6.5

0.6

0.5

20.0

Other

7.8

29.0

26.4

0.1

1.0

64.3

Total costs before SDI

189.1

290.0

143.3

27.3

13.1

662.8

Cost of sales

409.0

Operating costs

253.8

Total costs before SDI

662.8

Year ended 30 June 2022 (restated and re-presented)

Digital

£m

Grosvenor

Venues

£m

Mecca

Venues

£m

Enracha

Venues

£m

Central

Costs

£m

Total

£m

Employment and related costs

27.8

109.0

47.3

14.7

6.9

205.7

Taxes and duties

40.7

61.0

25.6

1.6

0.2

129.1

Direct costs

49.4

23.6

19.9

2.4

–

95.3

Depreciation and amortisation

13.4

33.3

16.0

1.3

3.4

67.4

Marketing

33.2

5.9

5.8

1.7

0.1

46.7

Property costs

0.5

9.5

4.5

0.6

0.9

16.0

Other

5.0

20.7

23.6

0.4

(0.8)

48.9

Total costs before SDI

170.0

263.0

142.7

22.7

10.7

609.1

Cost of sales

386.5

Operating costs

222.6

Total costs before SDI

609.1

The Group reports segmental information on the basis by which the chief operating decision-makers utilise internal

reporting within the business.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

184

3 Profit for the year – analysis by nature

The following items have been charged in arriving at the (loss) proﬁt for the year before ﬁnancing and taxation

from continuing operations:

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Employee beneﬁt expense

206.9

189.9

Cost of inventories recognised as expense

21.4

18.7

Amortisation of intangibles

15.7

15.4

Depreciation

–

owned assets (including £21.8m (year ended 30 June 2022: £23.5m) within cost of sales)

23.8

25.4

–

right-of-use assets (including £16.8m (year ended 30 June 2022: £24.9m) within cost of sales)

19.0

26.6

Amortisation and depreciation within SDI

10.5

12.6

Operating lease rentals payable – sub-lease income

–

Assets written off

–

SDI – operating (income) costs (see note 4)

128.9

(42.3)

Auditors’ remuneration for audit services

1.7

1.0

In the year, the Group’s auditors, Ernst & Young LLP, including its network ﬁrms, earned the following fees:

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Audit services

–

Fees payable to the Company’s auditor for the parent company and consolidated ﬁnancial statements

1.7

1.0

Other services

–

Fees payable for the review of Group’s interim consolidated ﬁnancial statements

–

1.7

1.0

£35,000 (year ended 30 June 2022: £35,000) of the audit fees related to the parent company.

It is the Group’s policy to balance the need to maintain auditor independence with the beneﬁt of taking advice from the leading ﬁrm

in the area concerned and the desirability of being efﬁcient.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

185

4 Separately disclosed items (SDIs)

Note

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Continuing operations

Impairment charges

10, 11, 12, 13

(118.9)

(47.8)

Impairment reversals

10, 11, 12, 13

6.6

22.0

Closure of venues

(7.7)

(4.7)

Amortisation of acquired intangible assets

(8.6)

(11.7)

Integration costs

(0.1)

(2.8)

Business transformation costs

(2.0)

(0.9)

VAT claim – net of costs

–

77.1

Property-related provision

(1.9)

10.4

Disposal provision release

3.7

Gain on remeasurement of previously existing interest in joint venture

–

0.8

Acquisition and disposal related costs

–

(0.1)

Separately disclosed items

(128.9)

42.3

Interest

(0.6)

5.6

Taxation

27.7

(10.5)

Separately disclosed items relating to continuing operations

(101.8)

37.4

Separately disclosed items relating to discontinued operations

Proﬁt on disposal of business

0.3

8.8

Taxation

–

Total separately disclosed items

(101.5)

46.2

It is Group policy to reverse separately disclosed items in the same line as they were originally recognised.

Impairment charges and reversal

During the year, the Group recognised impairment charges of £118.9m (2022: £47.8m) relating to Grosvenor and Enracha venues

and Mecca clubs. Following the last assessment made on 31 December 2022 where impairment charges of £95.4m were recognised,

the Group recognised a further £23.5m impairment charge for the period for a number of reasons, including lower than anticipated

performances, further reduction in forecast earnings and a decision to close a number of clubs and venues (see note 13 for further details).

The Group also recognised a reversal of previously impaired assets of £6.6m (2022: £22.0m Grosvenor and Enracha venues) relating

to Grosvenor venues. The reversals were driven by better than anticipated performance and improved outlook in the identiﬁed

Grosvenor venues.

These items are material, non-recurring and as such, have been excluded from underlying results.

Closure of venues

During the year, the Group made the decision to close a number of Grosvenor (£3.0m), Mecca venues (£3.1m) and an Enracha venue

(£0.1m) at a total cost of £6.2m (2022: £4.7m relating to a number of Mecca venues). These relate to onerous contract costs, dilapidations

and strip out costs on leased sites that have been identiﬁed for closure. Upon initial recognition of closure provisions, management

uses its best estimates of the relevant costs to be incurred, as well as the expected closure dates.

This item also includes speciﬁc dilapidation costs for recently closed clubs. This includes a speciﬁc dilapidations cost for recently

closed clubs estimated at £1.5m.

These are material, one-off costs and as such have been excluded from underlying results.

Amortisation of acquired intangible assets

Acquired intangible assets are amortised over the life of the assets with the charge being included in the Group’s reported

amortisation expense. Given these charges are material and non-cash in nature, the Group’s underlying results have been adjusted

to exclude the amortisation expense of £8.6m (2022: £11.7m) relating to the acquired intangible assets of Stride, YoBingo and Rialto.

Integration costs

During the year, £0.1m of costs (2022: £2.8m) have been excluded from the underlying operating results of the Group. These costs

have been incurred to ready the RIDE proprietary platform, acquired in the Stride acquisition, to migrate the legacy Rank brands.

Meccabingo.com successfully migrated in January 2022 and grosvenorcasino.com in September 2022.

Costs directly associated with the integration of business acquisitions are charged to the Group income statement. Such items

are material, infrequent in nature and are not considered to be part of the underlying business performance.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

186

Business transformation costs

This was a multi-year change programme for the Group focused around revenue growth, cost savings, efﬁciencies and ensuring the

key enablers are in place. The transformation programme was started in January 2019 and expected to complete by 31 December 2021

but due to COVID-19 this period was extended. The multi-year change programme was a material infrequent programme and was not

considered to be part of the underlying business performance.

During the year £2.0m of costs were incurred and excluded from the underlying results of the Group. Going forward the costs

associated with this programme would form part of the underlying results of the Group.

VAT claim

On 30 June 2021, the Group was informed that the First-tier Tribunal (‘FTT’) had allowed the appeal of the Group on its claim to be

refunded VAT paid on the takings from gaming machines during the period April 2006 to January 2013. Whilst this was a positive

decision for the Group, HMRC had a number of avenues of appeal before this matter reached a deﬁnitive conclusion, beginning with

an initial 56-day period from the date of decision in which to lodge an appeal and agree the exact guarantee of the claim with the Group.

Due to this, the transaction was disclosed as contingent assets in the Group’s Annual Report for the year ending 30 June 2021.

On 2 December 2021, the refund was received in relation to this claim comprising £77.5m principal and interest of £5.6m, with costs

directly incurred amounting to £0.4m. This conﬁrms the closure of the claim and the Group assessed no further appeal opportunities

to any parties.

This is a material, one-off amount and as such has been excluded from underlying results.

Property-related provisions

The Group recognised a dilapidation liability (and corresponding dilapidation asset) of £28.7m during the period ending 31 December

2022. As a result, the Group have recognised dilapidation asset depreciation of £1.9m (2022: £nil) and interest on dilapidation liability

of £0.6m (2022: £nil) both recognised as separately disclosed items.

Property related provisions do not relate to the operations of the Group, rather a direct result of potential club or property closure

and are therefore, excluded from underlying results.

In prior years and as a result of the COVID-19 lockdown, the Group determined it was probable that they will be required to make

payments under a property arrangement for which the liability will revert to the Group if the tenant defaults. A provision of £10.4m

was recognised, being the present value of the amount expected to be paid over the remaining term of the lease.

During the prior year, the Group re-considered this provision in light of the current circumstances and situation for both the Group,

the guarantors and the property tenants. It was determined that payment is no longer probable and therefore, the provision was

released in full.

This is a material, one-off provision and as such has been excluded from underlying results consistent with the original recognition

of the provision.

Disposal provision release

In prior years provision has been made for legacy industrial disease and personal injury claims, and other directly attributable costs

arising as a consequence of the sale or closure of previously owned businesses.

During the year, the Group have re-considered this provision by reviewing the historic and recent claims including the ﬁnal settlement

made. The Group also assessed the likelihood of payment for existing and potential future claims and concluded, on most cases, that

the payment could not be determined as probable. It was therefore determined necessary to release the provision of £3.7m for the year.

Gain on remeasurement of previously existing interest in joint venture

During the prior year, a gain of £0.8m was recognised on the remeasurement of the previously existing interest in a joint venture

following the completion of the purchase of Rank Interactive Limited (previously Aspers Online Limited), see note 34.

The gain is infrequent in nature and does not represent underlying performance and has been excluded from underlying results.

Acquisition and disposal related costs

Acquisition and disposal related costs include non-recurring costs to professional ﬁrms that have resulted from acquisition or potential

disposal of a subsidiary. This has been presented as an SDI due to its one-off nature.

Profit on disposal of business

Charges or credits associated with the disposal of part or all of a business may arise. Such disposals may result in one time impacts

that in order to allow comparability means the Group removes the proﬁt or loss from underlying operating results.

The Group also made the decision to release £0.3m of the warranty provision associated with the Belgium casino sale due to the passage

of time, see note 23.

Taxation

The tax impact of all of the above items are also considered not to be part of the underlying operations of the Group.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

187

5 Financing

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Continuing operations

Finance costs:

Interest on debt and borrowings

(4.8)

(4.5)

Amortisation of issue costs on borrowings

(1.3)

(1.9)

Interest payable on leases

(6.5)

(6.7)

Total ﬁnance costs

(12.6)

(13.1)

Finance income:

Interest income on net investments in leases

0.1

Interest income on short-term bank deposits

0.7

–

Total ﬁnance income

0.8

0.1

Other ﬁnancial losses

(0.5)

(0.4)

Total net ﬁnancing charge before SDIs

(12.3)

(13.4)

SDI – interest

(0.6)

5.6

Total net ﬁnancing charge

(12.9)

(7.8)

Other ﬁnancial losses include foreign exchange losses on loans and borrowings.

6 Taxation

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Current income tax

Current income tax – UK

1.3

(0.7)

Current income tax – overseas

(2.0)

(3.5)

Current income tax on SDI

2.6

(3.3)

Amounts over (under) provided in previous period

0.1

(5.4)

Total current income tax credit (charge)

2.0

(12.9)

Deferred tax

Deferred tax – UK

(5.8)

0.2

Deferred tax – overseas

0.1

(1.4)

Impact of rate changes on deferred tax

5.7

(0.2)

Deferred tax on SDI

25.1

(7.2)

Amounts over provided in previous period

–

4.6

Total deferred tax credit (charge) (note 22)

25.1

(4.0)

Tax credit (charge) in the income statement

27.1

(16.9)

The tax on the Group’s proﬁt before taxation differs from the average rate of UK corporation tax in the period of 20.50% (year ended

30 June 2022: 19.00%), which represents 9 months of 19.00% and 3 months of 25.00%. The differences are explained below:

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

(Loss) proﬁt before taxation on continuing operations

(122.7)

74.3

Tax charge calculated at 20.50% on proﬁt before taxation (year ended 30 June 2022: 19.00%)

25.2

(14.1)

Effects of:

(Expenses) income not deductible for tax purposes

(2.4)

0.8

Difference in overseas tax rates

(2.0)

(3.0)

Impact of rate changes on deferred tax

5.7

(0.2)

Adjustments relating to prior periods

0.1

(0.8)

Deferred tax not recognised

0.5

0.4

Tax credit (charge) in the income statement

27.1

(16.9)

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

188

Tax on SDIs

The taxation impacts of SDIs are disclosed below:

Year ended 30 June 2023

Year ended 30 June 2022

Current

income tax

£m

Deferred

tax

£m

Total

£m

Current

income tax

£m

Deferred

tax

£m

Total

£m

VAT claim – net of costs

–

(4.6)

(11.1)

(15.7)

Net impairment charges

2.0

23.2

25.2

1.3

3.3

4.6

Property-related provisions

0.2

0.7

0.9

(0.6)

(1.4)

(2.0)

Amortisation of acquired intangible assets

–

1.3

–

1.1

Closure of venues

0.2

1.3

1.5

0.5

0.4

0.9

Integration costs

0.1

(1.8)

(1.7)

0.1

0.3

0.4

Business transformation costs

0.1

0.4

0.5

–

0.2

Tax credit (charge) on SDI

2.6

25.1

27.7

(3.3)

(7.2)

(10.5)

Factors affecting future taxation

The Group operates in a number of territories and so the Group’s proﬁts are subject to tax in various jurisdictions. The Group monitors

income tax developments in these territories which could affect the Group’s tax liabilities.

On 20 June 2023 the UK Finance Bill was substantively enacted in the UK, including legislation to implement the OECD Pillar Two

income taxes for periods beginning on or after 1 January 2024. The Group has applied the exception in the Amendments to IAS 12

issued in May 2023 and has neither recognised nor disclosed information about deferred tax assets or liabilities relating to Pillar Two

income taxes.

UK corporation tax is calculated at 20.50% (year ended 30 June 2022: 19.00%) of the estimated assessable proﬁt for the period.

Taxation for overseas operations is calculated at the local prevailing rates.

On 3 March 2021, the Chancellor of the Exchequer announced the increase in the main rate of UK corporation tax from 19.00%

to 25.00% for the year starting 1 April 2023. This change was substantively enacted on 24 May 2021.

This rate increase will increase the amount of cash tax payments to be made by the Group.

7 Results attributable to the Parent Company

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the parent company

income statement. The loss for the year ended 30 June 2022 for the Company was £202.2m (year ended 30 June 2022: loss of £14.5m).

8 Dividends paid to equity holders

No dividend in respect of the year ended 30 June 2023 will be recommended at the Annual General Meeting on 19 October 2023

(year ended 30 June 2022: nil).

9 Earnings per share

(a) Basic earnings per share

Year ended 30 June 2023

Year ended 30 June 2022 (restated)

Underlying

SDI

Total

Underlying

SDI

Total

Proﬁt (loss) attributable to equity shareholders

Continuing operations

£5.8m

£(101.8)m

£(96.0)m

£18.7m

£37.4m

£56.1m

Discontinued operations

–

£0.3m

–

£8.8m

Total

£5.8m

£(101.5)m

£(95.7)m

£18.7m

£46.2m

£64.9m

Weighted average number of ordinary

shares in issue

468.4m

Basic earnings (loss) per share

Continuing operations

1.2p

(21.7)p

(20.5)p

4.0p

8.0p

12.0p

Discontinued operations

–

0.1p

–

1.9p

Total

1.2p

(21.6)p

(20.4)p

4.0p

9.9p

13.9p

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

189

9 Earnings per share (continued)

(b) Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion

of all dilutive potential ordinary shares. Share options issued to employees are not regarded as instruments that could potentially

dilute basic earnings per share in the future, being antidilutive, they are not included in the calculation of weighted average number

of shares.

Year ended 30 June 2023

Year ended 30 June 2022 (restated)

Underlying

SDI

Total

Underlying

SDI

Total

Weighted average number

of ordinary shares in issue

468.4m

Number of shares used for fully

diluted earnings per share

468.4m

Diluted earnings (loss) per share

Continuing operations

1.2p

(21.7)p

(20.5)p

4.0p

8.0p

12.0p

Discontinued operations

–

0.1p

–

1.9p

Total

1.2p

(21.6)p

(20.4)p

4.0p

9.9p

13.9p

10 Intangible assets

Group

Goodwill

£m

Casino

and other

gaming

licences and

concessions

£m

Software

and

development

£m

Brands and

customer

relationships

£m

Total

£m

Cost

At 1 July 2021

218.2

277.8

129.9

21.3

647.2

Additions

2.1

–

11.0

1.4

14.5

Disposals

–

Exchange adjustments

–

0.1

(0.2)

–

(0.1)

At 30 June 2022

220.3

277.9

140.7

22.7

661.6

Additions

–

12.9

0.2

13.1

Disposals

–

(0.7)

(3.0)

(3.7)

Reallocation

–

4.0

–

4.0

Exchange adjustments

–

0.1

–

0.1

At 30 June 2023

220.3

278.0

156.9

19.9

675.1

Aggregate amortisation and impairment

At 1 July 2021

–

60.7

69.6

12.3

142.6

Charge for the year

–

0.1

21.8

5.2

27.1

Impairment charges

–

13.4

–

13.4

Impairment reversal

–

(15.0)

–

(15.0)

Exchange adjustments

–

(0.1)

–

(0.1)

At 30 June 2022

–

59.1

91.4

17.5

168.0

Charge for the year

–

0.1

20.7

3.5

24.3

Impairment charges

–

27.7

–

27.7

Impairment reversal

–

Disposal

–

(0.7)

(3.0)

(3.7)

Reallocation

–

2.1

–

2.1

Exchange adjustments

–

(0.1)

–

(0.1)

At 30 June 2023

–

86.8

113.5

18.0

218.3

Net book value at 30 June 2022

220.3

218.8

49.3

5.2

493.6

Net book value at 30 June 2023

220.3

191.2

43.4

1.9

456.8

Management identiﬁed £1.9m of net book value which should be reclassiﬁed from property, plant and equipment to intangible assets. These have been reﬂected

in the reallocation line in the note above.

Amortisation charge for the year of £24.3m (30 June 2022: £27.1m) comprises of £8.6m (30 June 2022: £11.7m) recognised in respect

of SDI relating to continuing operations and £15.8m (30 June 2022: £15.4m) in respect of operating proﬁt before SDI.

Net impairment charges for the year of £27.7m (30 June 2022: £1.6m) have been recognised in respect of SDI relating to continuing

operations, comprising of an impairment charge of £27.7m (30 June 2022: £13.4m) and impairment reversals of £nil (30 June 2022: £15.0m).

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

190

Software includes internally-generated computer software and development technology with a net book value of £3.3m (30 June 2022:

£3.2m). Included in software and development are assets in the course of construction of £1.2m (30 June 2022: £1.0m).

Brands and customer relationships are fair value adjustments that arose on acquisition.

Intangible assets have been reviewed for impairment as set out in note 13.

11 Property, plant and equipment

Group

Land and

buildings

£m

Fixtures,

ﬁttings,

plant and

machinery

£m

Leasehold

improvements

£m

Total

£m

Cost

At 1 July 2021

109.8

462.4

–

572.2

Reallocation between categories

(74.0)

–

74.0

–

At 1 July 2021 (Re-presented)

35.8

462.4

74.0

572.2

Additions

0.3

25.6

0.2

26.1

Disposals

–

(5.1)

–

(5.1)

Exchange adjustments

–

(0.1)

–

(0.1)

At 30 June 2022

36.1

482.8

74.2

593.1

Additions

–

29.4

30.3

59.7

Disposals

(1.4)

(14.3)

(4.3)

(20.0)

Reallocation

0.8

(4.8)

–

(4.0)

Exchange adjustments

–

(0.2)

–

(0.2)

At 30 June 2023

35.5

492.9

100.2

628.6

Accumulated depreciation and impairment

At 1 July 2021

69.5

385.3

–

454.8

Reallocation between categories

(57.3)

–

57.3

–

At 1 July 2021 (Re-presented)

12.2

385.3

57.3

454.8

Charge for the year

0.4

22.7

2.3

25.4

Impairment charges

0.1

8.4

1.8

10.3

Impairment reversal

–

(5.3)

–

(5.3)

Disposals

–

(5.1)

–

(5.1)

Exchange adjustment

–

(0.1)

–

(0.1)

At 30 June 2022

12.7

405.9

61.4

480.0

Charge for the year

0.3

21.6

3.8

25.7

Impairment charges

4.2

23.2

24.2

51.6

Impairment reversal

–

(3.8)

(0.5)

(4.3)

Disposals

(1.4)

(14.1)

(4.3)

(19.8)

Reallocation

–

(2.1)

–

(2.1)

At 30 June 2023

15.8

430.7

84.6

531.1

Net book value at 30 June 2022

23.4

76.9

12.8

113.1

Net book value at 30 June 2023

19.7

62.2

15.6

97.5

Management identiﬁed £1.9m of net book value which should be reclassiﬁed from property, plant and equipment to intangible assets. These have been reﬂected

in the reallocation line in the note above.

Management identiﬁed £8.9m of net book value which should be reclassiﬁed from land and buildings to leasehold improvements. These have been reﬂected

in the reallocation line in the comparative in the note above, for better comparability.

Included in Leasehold improvements is the recognition of a general dilapidation asset and corresponding liability for all UK venues.

The Group has recognised the addition based on the recent closures of venues in FY21, FY22 and FY23, the possibility of future

closures and the downturn in the trading outlook, together with a hardening position from landlords and recessionary environment

making certain properties less attractive.

Net impairment charges for the year of £47.3m (30 June 2022: £5.0m) have been recognised in respect of SDI relating to

continuing operations, comprising of an impairment charge of £51.6m (30 June 2022: £10.3m) and impairment reversals of £4.3m

(30 June 2022: £5.3m).

Included in property, plant and equipment are assets in the course of construction of £7.1m (30 June 2022: £11.9m).

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

191

12 Right-of-use assets

Group

Right-of-use

land and

buildings

£m

Right-of-use

ﬂeet and

machines

£m

Total

£m

Cost

At 1 July 2021

194.4

5.0

199.4

Additions

21.9

–

21.9

At 30 June 2022

216.3

5.0

221.3

Additions

19.1

–

19.1

Disposals

(1.2)

–

(1.2)

Exchange adjustments

(0.2)

(0.1)

(0.3)

At 30 June 2023

234.0

4.9

238.9

Accumulated depreciation and impairment

At 1 July 2021

68.4

2.4

70.8

Charge for the year

25.0

1.6

26.6

Impairment charges

24.0

–

24.0

Impairment reversal

(1.8)

–

(1.8)

Exchange adjustment

0.1

–

0.1

At 30 June 2022

115.7

4.0

119.7

Charge for the year

18.1

0.9

19.0

Impairment charges

39.6

–

39.6

Impairment reversal

(2.3)

Disposals

(1.2)

–

(1.2)

At 30 June 2023

169.9

4.9

174.8

Net book value at 30 June 2022

100.6

1.0

101.6

Net book value at 30 June 2023

64.1

–

64.1

Net impairment charges for the year of £37.3m (30 June 2022: £22.2m) have been recognised in respect of SDI relating to

continuing operations, comprising of an impairment charge of £39.6m (30 June 2022: £24.0m) and impairment reversals of £2.3m

(30 June 2022: £1.8m).

13 Impairment reviews

Group

The Group considers each venue to be a separate cash-generating unit (‘CGU’). The Group’s digital operations consist of the UK digital

business and the International digital business. UK digital and International digital are each assessed as separate CGUs. The individual

Grosvenor venues are aggregated for the purposes of allocating the Grosvenor goodwill.

As at 30 June 2023, goodwill and indeﬁnite life intangible assets considered signiﬁcant in comparison to the Group’s total carrying

amount of such assets have been allocated to groups of CGUs as follows:

Goodwill

Intangible assets

As at 30 June

2023

£m

As at 30 June

2022

£m

As at 30 June

2023

£m

As at 30 June

2022

£m

Grosvenor – group of CGUs

80.9

179.5

206.4

UK digital CGUs

108.5

–

International digital CGUs

30.9

–

Enracha CGUs

–

11.6

12.2

Total

220.3

191.1

218.6

Each Grosvenor venue is a separate CGU. Each venue holds at least one licence, but can hold multiple licences, which represents an indeﬁnite life intangible asset.

The individual Grosvenor venues are aggregated for the purposes of allocating the Grosvenor goodwill.

Each Enracha venue is a separate CGU. As no individual venue CGU is signiﬁcant in comparison to the total carrying amounts of intangible assets and other assets,

the venue CGUs have been presented on aggregated basis.

The carrying amounts of the Group’s non-ﬁnancial assets, other than inventories and deferred tax assets, are reviewed at each reporting

date to determine whether there is any indication of impairment as required by IAS 36. If any such indication exists, then the asset’s

or CGU’s recoverable amount is estimated. For goodwill and intangible assets that have indeﬁnite lives, the recoverable amount of the

related CGU or group of CGUs is estimated each year at the same time. The recoverable amount is determined based on the higher of

the fair value less costs of disposal and value in use. The nature of the test requires that the Directors exercise judgement and estimation.

The impairment test was conducted in June 2023; management is satisﬁed that the assumptions used were appropriate and that

the goodwill asset is not impaired, no reasonable possible changes in assumptions will result in an impairment and therefore

no sensitivity analysis has been disclosed.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

192

Testing is carried out by allocating the carrying value of these assets to CGUs, as set out above, and determining the recoverable

amounts of those CGUs. The individual CGUs were ﬁrst tested for impairment and then the group of CGUs to which goodwill is

allocated were tested. Where the recoverable amount exceeds the carrying value of the CGUs, the assets within the CGUs are

considered not to be impaired. If there are legacy impairments for such assets, except goodwill, these are considered for reversal.

The recoverable amounts of all CGUs or group of CGUs have been calculated with reference to their value in use. Value in use

calculations are based upon estimates of future cash ﬂows derived from the Group’s strategic plan for the following ﬁve years. The

strategic plan is updated in the ﬁnal quarter of the ﬁnancial year and has been approved by the Board of Directors. Future cash ﬂows

will also include an estimate of long-term growth rates which are estimated by business unit.

Pre-tax discount rates are applied to each CGU or group of CGUs’ cash ﬂows and reﬂect both the time value of money and the risks

that apply to the cash ﬂows of that CGU or group of CGUs. These estimates have been calculated by external experts and are based

on typical debt and equity costs for listed gaming and betting companies with similar risk proﬁles. The rates adopted are disclosed

in the table below.

Pre-tax discount rate

Long-term growth rate

2022/23

2021/22

2022/23

2021/22

Grosvenor venues

12.17%

11.3%

Mecca venues

12.17%

11.3%

UK digital

12.57%

13.0%

International digital

12.63%

14.7%

Enracha venues

13.83%

12.5%

Expenses are assessed separately by category. Assumptions include an extrapolation of recent cost inﬂation trends, known inﬂation

trends such as national living wage and an expectation that costs will be incurred in line with agreed contractual rates.

Where a CGU does not have goodwill or indeﬁnite life intangible assets, the CGU is only assessed for impairment where an indicator

of impairment to the associated deﬁnite life intangible, right-of-use assets and/or property, plant and equipment is identiﬁed.

The approach to determine recoverable amounts for a CGU without goodwill or indeﬁnite life intangibles is the same as that described

above and is determined based on the higher of fair value less costs of disposal and value in use.

As a result of the procedures outlined above, the following impairment charges and impairment reversal have been recognised during

the year and disclosed within SDIs in the Group income statement.

Property,

plant and

equipment

£m

Right-of-use

asset

£m

Intangible

assets

£m

Total

£m

Impairment charges

Grosvenor venues

(18.9)

(7.5)

(26.9)

(53.3)

Mecca venues

(31.8)

(29.7)

–

(61.5)

Enracha venues

(0.9)

(2.4)

(0.8)

(4.1)

Impairment reversals

Grosvenor venues

4.3

2.3

–

6.6

Enracha venues

–

Net impairment (charge) reversals

(47.3)

(37.3)

(27.7)

(112.3)

Impairment charge and reversal are recorded at the different individual Grosvenor venue CGUs. The total value in use of the CGUs where an impairment charge

or impairment reversal was recognised totalled to £108.7m.

Impairment charge and reversal are recorded at the different individual Mecca venue CGUs. The total value in use of the CGUs where an impairment charge

or impairment reversal was recognised totalled to £13.4m.

Impairment charge and reversal are recorded at the different individual Enracha venue CGUs. The total value in use of the CGUs where an impairment charge

or impairment reversal was recognised totalled to £60.1m.

Mecca clubs and Grosvenor and Enracha venues had indicators of impairment, primarily caused by lower than anticipated

performance post the pandemic, and low level of forecast earnings, or a decision to close venues. This further resulted in a decision

to close a Grosvenor venue and a number of Mecca clubs which resulted in impairment of £7.1m.

During the prior year, the Group also recognised a reversal of previously impaired assets of £6.6m relating to Grosvenor venues

(2022: £22.0m). The reversals were driven by better than anticipated performance and improved outlook in the in the identiﬁed

Grosvenor and Enracha venues.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

193

13 Impairment reviews (continued)

Sensitivity of impairment review

The calculation of value in use is most sensitive to the following assumptions:

–

revenue growth

–

discount rates

–

growth rates used to extrapolate cash ﬂow beyond the forecast period

Revenue growth − the Group prepared cash ﬂow projections derived from the most recent budget for the year ending 30 June 2024 and

the Group’s strategic plan to 30 June 2027, which applied a growth rate reﬂecting management’s strategy for a period of three (3) years

based on past performance and expectations of future changes in the market and Group’s operating model.

Discount rates − discount rates represent the current market assessment of the risks speciﬁc to each CGU, taking into consideration

the time value of money and individual risks of the underlying assets that have not been incorporated in the cash ﬂow estimates.

The discount rate calculation is based on the speciﬁc circumstances of the Group and its operating segments and is derived from

its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from

the expected return on investment by the Group’s investors. The cost of debt is based on the interest-bearing borrowings the Group

is obliged to service. Segment-speciﬁc risk is incorporated by applying individual beta factors. The beta factors are evaluated annually

based on publicly available market data. Adjustments to the discount rate are made to factor in the speciﬁc amount and timing of the

future tax ﬂows in order to reﬂect a pre-tax discount rate.

Growth rate estimates − medium-term growth rates applied to the value-in-use calculations of each CGU reﬂect management’s strategy

for a period of three (3) years to ﬁve (5) years. Terminal values were determined using a long-term growth assumption for each CGU

noted in the table above.

Earnings multiples − utilised in determining the terminal value within the Grosvenor CGUs.

The Group assessed the impact of climate change in the impairment review and considers that the most signiﬁcant impacts would be

in relation to the cost of energy to the Group for which best estimates have been factored into future forecasts. The Group constantly

monitors the latest government legislation in relation to climate related matters. At the current time, no legislation has been passed

that will impact the Group. The Group will adjust the key assumptions used in value in use calculations and sensitivity to changes

in assumptions should a change be required.

The Group has carried out sensitivity analysis on the reasonable possible changes in key assumptions in the impairment tests for

(a) each CGU or group of CGUs to which goodwill has been allocated and (b) its venue CGUs (including indeﬁnite life intangible assets’).

For Grosvenor, Mecca and Enracha venues, the following sensitivities would result in changes to the recognised impairments.

No reasonable possible changes in assumptions will result in an impairment and therefore no sensitivity analysis has been disclosed

for Digital CGUs.

Grosvenor Venues CGUs

Key Assumption

Reasonable Possible Change

Impact on impairment

£m

Revenue growth

10% decrease in revenue in year 1 – London

Increase

(0.9)

10% decrease in revenue in year 1 – Rest of UK

Increase

(2.5)

10% increase in revenue in year 1 – London

Decrease

–

10% increase in revenue in year 1 – Rest of UK

Decrease

1.4

Pre-tax discount rates

1% decrease in discount rates

Decrease

1.1

1% increase in discount rates

Increase

(1.0)

Earnings multiples

10% decrease in earnings multiples

Increase

(2.2)

10% increase in earnings multiples

Decrease

1.5

Long-term growth rates

1% decrease in long-term growth rates

Increase

(0.3)

1% increase in long-term growth rates

Decrease

0.3

Mecca Venues CGUs

Key Assumption

Reasonable Possible Change

Impact on impairment

£m

Revenue growth

10% decrease in revenue in year 1

Increase

(1.1)

10% increase in revenue in year 1

Decrease

1.2

Pre-tax discount rates

1% decrease in discount rates

Decrease

0.6

1% increase in discount rates

Increase

(0.6)

Long-term growth rates

1% decrease in long–term growth rates

Increase

(0.4)

1% increase in long–term growth rates

Decrease

0.5

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

194

International Venues

Key Assumption

Reasonable Possible Change

Impact on impairment

£m

Revenue growth

10% decrease in revenue in year 1

Increase

(1.2)

10% increase in revenue in year 1

Decrease

1.2

Pre-tax discount rates

1% decrease in discount rates

Decrease

1.0

1% increase in discount rates

Increase

(0.9)

Earnings multiples

10% decrease in earnings multiples

Increase

(0.2)

10% increase in earnings multiples

Decrease

0.2

Long-term growth rates

1% decrease in long–term growth rates

Increase

(0.4)

1% increase in long–term growth rates

Decrease

0.4

14 Investments

(a) Group investments

On 21 April 2022, Rank completed the purchase of the remaining 50% shareholding in Rank Interactive Limited (formerly known as

Aspers Online Limited) for £1.3m made up of (i) cash consideration of £1 (ii) loan repayment of £0.5m and (iii) deferred consideration

of £0.8m, refer to note 34 for details.

(b) Company investments

As at

30 June

2023

£m

As at

30 June

2022

£m

Cost

At start of year

1,452.3

At end of year

1,452.3

Provision for impairment

At start of year

320.5

Impairment charge

182.6

–

At end of year

503.1

320.5

Net book value at start of year

1,131.8

Net book value at end of year

949.2

1,131.8

The Company calculates a recoverable amount of its subsidiaries based upon the Board approved strategic plans and business models

and, where required, adjustments for long-term provisions and net intercompany positions are made.

Company

The Company also tests annually the carrying value of its investments in subsidiaries, being its investments in Rank Nemo

(Twenty-Five) Limited, a holding company for all companies within the Group with the exception of Rank Group Finance plc which

acts as the Group’s ﬁnancing company.

Consistent with the prior year, the recoverable amount was calculated by reference to value in use. The value in use of the Company’s

investment in Rank Group Finance Limited is estimated based on the net assets of the company which principally consist of amortised

cost receivables and so is considered to approximate value in use.

The calculation of value in use for Rank Nemo (Twenty-Five) Limited is based upon estimates of future cash ﬂows from the Group’s

CGUs and derived from the Group’s strategic plan for the following three years and, where required, adjustments for long-term

provisions and lease liabilities. The key assumptions underlying the forecasts are those described above with regards to the

impairment testing of the Group’s CGUs.

As a result of the procedures outlined above, the following impairment charges have been recognised during the year.

Investment in Rank Nemo (Twenty-Five) Limited

Investment in Rank Group Finance PLC

Total

£m

Impairment charges

182.6

–

182.6

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

195

14 Investments (continued)

Sensitivity of impairment review

The calculation of value in use for Rank Nemo (Twenty-Five) Limited is most sensitive to the following assumptions like revenue

growth, discount rates and growth rates used to extrapolate the cashﬂows of CGUs beyond the forecast period.

Key Assumption

Reasonable Possible Change

Impact on impairment

£m

Revenue growth

10% decrease in revenue in year 1 – Grosvenor

Increase

(95.9)

10% decrease in revenue in year 1 – Mecca

Increase

(1.1)

10% decrease in revenue in year 1 – Enracha

Increase

(6.1)

10% decrease in revenue in year 1 – International Digital

Increase

(4.5)

10% decrease in revenue in year 1 – UK Digital

Increase

(161.8)

10% decrease in revenue in year 1 – Grosvenor

Decrease

65.9

10% increase in revenue in year 1 – Mecca

Decrease

1.1

10% increase in revenue in year 1 – Enracha

Decrease

6.1

10% increase in revenue in year 1 – International Digital

Decrease

4.5

10% increase in revenue in year 1 – UK Digital

Decrease

17.8

Pre-tax discount rates

1% decrease in discount rates – Grosvenor

Decrease

46.5

1% decrease in discount rates – Mecca

Decrease

0.9

1% decrease in discount rates – Enracha

Decrease

7.1

1% decrease in discount rates – International Digital

Decrease

3.8

1% decrease in discount rates – UK Digital

Decrease

16.1

1% increase in discount rates – Grosvenor

Increase

(41.4)

1% increase in discount rates – Mecca

Increase

(0.8)

1% increase in discount rates – Enracha

Increase

(5.8)

1% increase in discount rates – International Digital

Increase

(3.3)

1% increase in discount rates – UK Digital

Increase

(14.2)

Long-term growth rates

1% decrease in long-term growth rates – Grosvenor

Increase

(11.6)

1% decrease in long-term growth rates – Mecca

Increase

(1.7)

1% decrease in long-term growth rates – Enracha

Increase

(3.5)

1% decrease in long-term growth rates – International Digital

Increase

(2.6)

1% decrease in long-term growth rates – UK Digital

Increase

(14.2)

1% increase in long-term growth rates – Grosvenor

Decrease

12.8

1% increase in long-term growth rates – Mecca

Decrease

1.8

1% increase in long-term growth rates – Enracha

Decrease

4.1

1% increase in long-term growth rates – International Digital

Decrease

2.8

1% increase in long-term growth rates – UK Digital

Decrease

15.4

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

196

The Company owns directly or indirectly 100% (unless otherwise noted) of the ordinary share capital and voting rights

of the following companies:

Name

Country of

incorporation

Principal activities

Registered ofﬁce address

Daub Alderney Limited

Alderney

Support services to interactive

gaming

Inchalla, Le Val, Alderney GY9 3UL

QSB Gaming Limited

Alderney

Intermediary holding company

La Corvee House, La Corvee,

Alderney, GY9 3TQ

Rank Digital Gaming

(Alderney) Limited

10,11

Alderney

Dormant

La Corvee House, La Corvee,

Alderney, GY9 3TQ

8Ball Games Limited

England and Wales

Marketing services

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Grosvenor Casinos (GC)

Limited

England and Wales

Casinos

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Grosvenor Casinos Limited

England and Wales

Casinos

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Linkco Limited

England and Wales

Processing of credit transfers

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Luda Bingo Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Mecca Bingo Limited

England and Wales

Social and Bingo clubs

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank (U.K.) Holdings Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Casino Holdings Limited

England and Wales

Intermediary holding company

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Digital Holdings Limited

England and Wales

Intermediary holding company

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Digital Limited

England and Wales

Support services to interactive

gaming

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Group Finance Plc

England and Wales

Funding operations for the Group

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Group Gaming Division

Limited

England and Wales

Intermediary holding company and

property services

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Group Holdings Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Leisure Holdings

Limited

England and Wales

Intermediary holding company and

corporate activities

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Leisure Limited

England and Wales

Adult gaming centres in Mecca and

Grosvenor Casinos venues

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Leisure Machine

Services Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Nemo (Twenty-Five)

Limited

England and Wales

Intermediary holding company

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Overseas Holdings

Limited

England and Wales

Intermediary holding company

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

RO Nominees Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Spacebar Media Limited

England and Wales

Development and maintenance of

online gaming software

Unit 450 Highgate Studios 53-79

Highgate Road, Kentish Town,

London, NW5 1TL

Stride Together Limited

England and Wales

Support services to interactive

gaming

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

The Gaming Group Limited

England and Wales

Casinos

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

The Rank Organisation

Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Think Beyond Media Limited

England and Wales

Marketing services

Unit 441/2 Highgate Studios 53-79

Highgate Road, Kentish Town,

London, NW5 1TL

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

197

Name

Country of

incorporation

Principal activities

Registered ofﬁce address

Rank Interactive Limited

(formerly known as Aspers

Online Limited)

England and Wales

Interactive gaming

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Upperline Marketing

Limited

6,9

England and Wales

Support services to interactive

gaming

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

MRC Developments Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Precision Industries

Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Rank Speciality Catering

Limited

England and Wales

Dormant

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Associated Leisure France

Properties SCI

France

Dormant

Zi Sud, 12 Rue des Petits Champs,

35400, St Malo, France

Associated Leisure France

SARL

France

Dormant

4 Rue Joseph Monier, 92859 Rueil

Malmaison, Cades, France

Rank Digital Services

(Gibraltar) Limited

Gibraltar

Marketing and property services

Second Floor, Icom House, 1/5 Irish

Town, Gibraltar

Rank Interactive (Gibraltar)

Limited

Gibraltar

Interactive gaming

Second Floor, Icom House, 1/5 Irish

Town, Gibraltar

Mindful Media Limited

Guernsey

Dormant

Kingsway House, Havilland Street,

St Peter Port, Guernsey, GY1 2QE

Passion Gaming Private

Limited

India

Online operator of digital card

games in India

2nd Floor, SCO No 350, Sector 9,

Urban Estate, Panchkula, Haryana,

India

Netboost Media Limited

Israel

Marketing services

5 Ha’Chilazon Street, Ramat Gan,

Israel

S.T.R. Financials Limited

Israel

Dormant

58 Harakevet St. Electra City Tower

Tel-Aviv 6777016 Israel

Stride Gaming Limited

Jersey

Intermediary holding company

12 Castle Street, St. Helier Jersey

JE2 3RT

Bingosoft Plc

Malta

Interactive gaming

Vault 14, Level 2, Valletta

Waterfront, Floriana, FRN 1914,

Malta

Stride Gaming Spain Plc

Malta

Dormant

Level 3, Valleta Buildings, South

Street, Valletta VLT 1103, Malta

Rank Interactive Services

(Mauritius) Limited (formerly

known as SRG Services

Limited)

Mauritius

Shared services support

Suite 112 Grand Bay Business Park,

Grand Bay 1305-02, Republic of

Mauritius

Stride Investment

Mauritius

Intermediary holding company

c/o Mauri Experta Ltd., Ofﬁce 2,

Level 4, Iconebene, Lot B441, Rue

de L’Institut, Ebene, Republic of

Mauritius

Shifttech (Pty) Limited

South Africa

Development and maintenance of

online gaming software

Unit 10, 10 Pepper Street, Cape

Town, Western Cape 8001, South

Africa

Conticin SL

Spain

Operator of parking for social and

bingo clubs

Calle Balmes Nº 268-270 1st Floor,

08006, Barcelona, Spain

Gotfor SA

Spain

Social and bingo clubs

Carrer del Papa Pius XI, 114, 08208

Sabadell, Barcelona, Spain

Rank Cataluña SA

Spain

Social and bingo clubs

Calle Balmes Nº 268-270 1st Floor,

08006, Barcelona, Spain

Rank Centro SA

Spain

Social and bingo clubs

Calle Espoz y mina Nº 8, 1st centro,

28012, Madrid, Spain

Rank Digital España SA

Spain

Dormant

Calle Balmes Nº 268-270 1st Floor,

08006, Barcelona, Spain

Rank Holding España SA

Spain

Intermediary holding company

Calle Balmes Nº 268-270 1st Floor,

08006, Barcelona, Spain

Notes to the financial statements

Continued

14 Investments (continued)

The Rank Group Plc

Annual Report 2023

198

Name

Country of

incorporation

Principal activities

Registered ofﬁce address

Rank Stadium Andalucia SL

Spain

Arcade and sports betting

Calle Balmes Nº 268-270 1st Floor,

08006, Barcelona, Spain

Top Rank Andalucia SA

Spain

Social and bingo clubs

Conde Robledo 1, 14008, Cordoba,

Spain

Verdiales SL

Spain

Social and bingo clubs

Sala Andalucía, Ronda,

Capuchinos 19, 41008, Sevilla,

Spain

Rank America Inc.

U.S.A.

Dormant

The Corporation Trust Company,

1209 Orange Street, Wilmington,

DE 19801, USA

Directly held by the Company.

2. 51% investment and year end 31 March.

3. Year end 31 August.

4. Year end 31 October.

Year end 31 December. Stride Gaming Spain plc is in the process of liquidation as at 30 June 2023.

Principal activities are carried out in Malta through its Malta branch.

Acquired the remaining 50% ownership in joint venture interest on 1 April 2022, see note 34.

Principal activity changed from Dormant to Interactive Gaming with effect from 1 July 2022.

Rank Group plc has issued a parental guarantee exempting the company from the requirements of the Companies Act 2006 related to the audit of individual

accounts by virtue of s479A of the Act.

10. Transfer of business activities to Rank Interactive (Gibraltar) Limited took place on 1 July 2022.

11. Principal activity changed from Interactive Gaming to Dormant with effect from 1 July 2022.

12. Name changed to Rank Interactive Services (Mauritius) Limited on 6 October 2022.

13. Rank Digital España SA transferred its digital business to Bingosoft and became Dormant on 2 November 2021.

The principal activities are carried out in the country of incorporation as indicated above unless otherwise noted.

All subsidiary undertakings have a 30 June year end unless otherwise indicated.

Set out below is the summarised ﬁnancial information for the subsidiary that has non-controlling interests. The amounts disclosed

for each subsidiary are before intercompany eliminations.

Non-controlling interest arises on 49% of the net assets of Passion Gaming Private Limited which was valued using the proportionate

share method per IFRS 3.

As at

30 June

2023

£m

As at

30 June

2022

£m

Current assets

2.1

1.4

Current liabilities

(0.6)

Current net assets

1.5

0.8

Non-current assets

0.1

Non-current liabilities

(1.0)

Non-current assets

(0.9)

Net assets

0.6

(0.1)

Accumulated NCI

0.3

(0.1)

15 Inventories

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Finished goods

2.2

2.3

There were no write downs of inventory in the year (30 June 2022: £nil).

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

199

16 Other receivables

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Current

Other receivables

13.4

10.7

Less: provisions for impairment of other receivables

(0.9)

(1.6)

Other receivables – net

12.5

9.1

Net investment in lease

1.4

Prepayments

15.2

23.7

Other receivables – current

29.1

34.2

Non-current

Other receivables

6.2

6.7

Net investment in lease

–

Other receivables – non-current

6.2

6.7

Group

The Directors consider that the carrying value of other receivables approximate to their fair value.

As at 30 June 2023, other receivables of £0.3m (30 June 2022: £1.3m) were past due but not impaired.

The other classes within receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group

does not hold any collateral as security.

17 Government grants

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

At the start of the year

–

0.8

Receivable in the year

–

3.6

Cash received

–

(4.4)

At the end of the year

–

Government grants were received under the Coronavirus Job Retention Scheme in the UK and similar schemes in other countries

in which the Group operates.

18 Trade and other payables

Group

Company

As at

30 June

2023

£m

As at

30 June

2022

£m

As at

30 June

2023

£m

As at

30 June

2022

£m

Current

Trade payables

13.4

35.8

–

Social security and other taxation

31.6

29.3

–

Other payables

37.6

32.5

0.7

0.4

Accruals

43.5

33.5

–

Trade and other payables – current

126.1

131.1

0.7

0.4

Included within other payables as at 30 June 2022 is £5.9m UK Gambling commission ﬁne issued to Daub Alderney Limited, a Stride

licensed entity. This has been settled during the year.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

200

19 Income tax

Group

Company

As at

30 June

2023

£m

As at

30 June

2022

£m

As at

30 June

2023

£m

As at

30 June

2022

£m

Income tax receivable

14.9

8.1

8.3

–

Income tax payable

(5.7)

(4.2)

–

Net income tax receivable

9.2

3.9

8.3

–

20 Financial assets and liabilities

(a) Interest-bearing loans and borrowings

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Current interest-bearing loans and borrowings

Bank overdrafts

1.5

–

Obligations under leases

42.2

40.4

Term loans

44.4

34.4

Revolving credit facility

18.0

–

Other current loans

Accrued interest

0.4

0.5

Unamortised facility fees

(0.6)

(1.0)

Total current interest-bearing loans and borrowings

105.9

74.3

Non-current interest-bearing loans and borrowings

Obligations under leases

126.8

141.3

Term loans

–

44.4

Other non-current loans

Unamortised facility fees

–

(0.3)

Total non-current interest-bearing loans and borrowings

126.8

185.4

Total interest-bearing loans and borrowings

232.7

259.7

Sterling

232.7

259.7

Total interest-bearing loans and borrowings

232.7

259.7

Term loan facilities

The £128.1m term loan signed on 31 May 2019 has interest payable on a periodic basis depending on the loan drawn. The facility

carries a ﬂoating rate of interest which, on 1 January 2022, changed from LIBOR to SONIA. The total term loan at 30 June 2023

was £44.4m (30 June 2022: £78.8m), a reduction in the year following the third scheduled repayment of £34.4m made in May 2023.

Following the Group completing a reﬁnancing of its revolving credit facilities in August 2023, the Group repaid the outstanding

balance of £44.4m in full.

Revolving credit facilities (‘RCF’)

At 30 June 2023, the Group had total revolving credit facilities (‘RCFs’) of £80.0m, comprising three bilateral RCFs of £25.0m, £40.0m

and £15.0m which mature in August 2023 (extended from July 2023), May 2024 and February 2025 respectively. The facilities all carry

a ﬂoating rate of interest which were based on LIBOR until it transitioned to SONIA on 1 January 2022. At 30 June 2023, £18.0m of the

RCF was drawn (30 June 2022: £nil), providing the Group with £62.0m of undrawn committed facilities.

On 7 August 2023, the Group signed a new RCF for £25.0m with one of its relationship banks. In addition, the Group’s existing £80.0m

of RCFs were reduced to a total of £75.0m, with each bank providing £25.0m, giving the Group a total RCF of £100.0m, £25.0m of which

expires in November 2024, with the remaining £75.0m expiring in February 2025. All ﬁnancial covenants remain unchanged.

Covenants

The Group’s banking facilities require it to meet two ﬁnancial covenant tests biannually, a net debt to earnings before interest,

tax, depreciation, amortisation and SDI’s (‘EBITDA’) ratio of no more than 3x, and an EBITDA to interest charge of no less than 3x.

Both covenants were met in the year.

Post balance sheet event

In August 2023, the Group secured a ﬁnancing package which totalled £100.0m of revolving credit facilities. £25.0m is committed

until November 2024 and the remaining £75.0m is committed until February 2025. The Group subsequently repaid the remaining

term loan of £44.4m.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

201

20 Financial assets and liabilities (continued)

Company

The Company did not hold any external interest-bearing loans or borrowings at 30 June 2023 (30 June 2022: £nil). The Company held

interest bearing loans with other Group companies at 30 June 2023 of £416.5m (30 June 2022: £387.1m).

(b) Hedging activities

The Group has not carried out any hedging activities in either period.

The table below is a comparison by class of the carrying amounts and fair value of the Group and Company’s ﬁnancial instruments

at 30 June 2023 and 30 June 2022.

Carrying amount

Fair value

Group

As at

30 June

2023

£m

As at

30 June

2022

(restated)

£m

As at

30 June

2023

£m

As at

30 June

2022

(restated)

£m

Financial assets:

Loans and receivables

Other receivables

Level 2

3.8

Cash and short-term deposits

Level 1

60.0

95.7

60.0

95.7

Total

63.8

99.5

63.8

99.5

Financial liabilities:

Other ﬁnancial liabilities

Interest bearing loans and borrowings

–

Obligations under leases

Level 2

169.0

181.7

169.0

181.7

–

Floating rate borrowings

Level 2

62.4

78.8

62.4

78.8

–

Bank overdrafts

Level 1

1.5

–

1.5

–

Other

Level 2

0.4

–

0.4

–

Trade and other payables

Level 2

92.9

101.8

92.9

101.8

Total

326.2

362.3

326.2

362.3

Carrying amount

Fair value

Company

As at

30 June

2023

£m

As at

30 June

2022

£m

As at

30 June

2023

£m

As at

30 June

2022

£m

Financial assets:

Loans and receivables

Trade and other payables

0.7

0.4

0.7

0.4

Financial guarantee contracts

1.6

2.6

1.6

2.6

Amounts owed to subsidiary undertakings

416.5

387.1

416.5

387.1

Total

418.8

390.1

418.8

390.1

The fair value of the ﬁnancial assets and liabilities are included at the amount at which the instrument could be exchanged in a current

transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions apply:

–

Cash and short-term deposits, other receivables and other ﬁnancial liabilities approximate to their carrying amounts largely due

to the short-term maturities of these instruments; and

–

The fair value of ﬁxed rate borrowings is based on price quotations at the reporting date.

Fair value hierarchy

The Group uses the following hierarchy to determine the carrying value of ﬁnancial instruments that are measured at fair value:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques which use inputs which have a signiﬁcant effect on the recorded fair value that are not based on observable

market data.

Level 3: techniques which use inputs which have a signiﬁcant effect on the recorded fair value that are not based on observable

market data.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

202

21 Financial risk management objectives and policies

Financial risk factors

The Group and Company’s principal ﬁnancial liabilities comprise loans and borrowings, trade and other payables and ﬁnancial

guarantee contracts. The main purpose of these ﬁnancial liabilities is to ﬁnance the Group’s operations. The Group has other

receivables, and cash and short-term deposits that derive directly from its operations.

The Group is exposed to market risk, credit risk and liquidity risk.

The Group’s overall ﬁnancial risk management programme focuses on the unpredictability of ﬁnancial markets and seeks to minimise

potential adverse effects on the Group’s ﬁnancial performance.

The Group’s senior management oversees the management of these risks. The Finance Committee is supported by the Group’s senior

management, which advises on ﬁnancial risks and the appropriate ﬁnancial risk governance framework for the Group. The Finance

Committee provides assurance that the Group’s ﬁnancial risk-taking activities are governed by appropriate policies and procedures

and the ﬁnancial risks are identiﬁed, measured and managed in accordance with Group policies and risk appetite.

The Board of Directors review and agree policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of future cash ﬂows of a ﬁnancial instrument will ﬂuctuate because of changes in market

prices. Financial instruments affected by market risk include loans and borrowings and deposits.

The sensitivity analyses in the following sections relate to the positions as at 30 June 2023 and 30 June 2022.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of ﬁxed to ﬂoating rates of the debt

and the proportion of ﬁnancial instruments in foreign currencies are all constant.

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash ﬂows of a ﬁnancial instrument will ﬂuctuate because of changes

in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s

operating activities (when revenue or expense is denominated in a different currency from the Group’s functional currency)

and the Group’s net investments in foreign subsidiaries.

The Group’s current policy is not to hedge foreign currency risk.

Foreign currency sensitivity

The following table demonstrates the sensitivity of a possible change in the US dollar and euro, with all other variables held constant,

to the Group’s proﬁt before tax and the Group’s equity. The Group’s exposure to foreign currency changes for all other currencies

is not material.

Effect on proﬁt before tax

Effect on equity

As at

30 June

2023

£m

As at

30 June

2022

£m

As at

30 June

2023

£m

As at

30 June

2022

£m

Change in foreign exchange rates:

+10.0% US$

(0.1)

–

-10.0% US$

0.2

–

+10.0% euro

(0.2)

(0.6)

5.8

30.8

-10.0% euro

0.2

0.7

(5.8)

(30.8)

(ii) Cash flow and fair value interest rate risk

Interest rate risk is the risk that the fair value or future cash ﬂows of a ﬁnancial instrument will ﬂuctuate because of changes in market

interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt

obligations with ﬂoating interest rates.

Historically the Group has managed its interest rate risk by having a balanced portfolio of ﬁxed and variable rate loans and borrowings.

The Group has an agreed policy of maintaining between 40% and 60% of its borrowings at a ﬁxed rate of interest. At 30 June 2023,

the Group is operating outside the policy with 73% of the borrowings at a ﬁxed rate of interest (30 June 2022: 43%), driven by the level

of ﬁxed rate ﬁnance leases.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

203

21 Financial risk management objectives and policies (continued)

(iii) Interest rate sensitivity

The table below demonstrates the sensitivity to a possible change in interest rates on income and equity for the year when this

movement is applied to the carrying value of loans, borrowings, cash and short-term deposits.

Effect on proﬁt before tax

As at

30 June

2023

£m

As at

30 June

2022

£m

Sterling:

100 basis point increase

(0.6)

200 basis point increase

(1.2)

There was no impact on equity in either year as a consequence of loan arrangements.

The Group did not enter into any ﬁxed-to-ﬂoating or ﬂoating-to-ﬁxed interest rate swaps in either year.

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a ﬁnancial instrument or customer contract, leading to a

ﬁnancial loss. The Group is exposed to credit risk from its operating activities (primarily for other receivables) and from its ﬁnancing

activities, including deposits with banks and ﬁnancial institutions, foreign exchange transactions and other ﬁnancial instruments.

Financial instruments and cash deposits

Credit risk from balances with banks and ﬁnancial institutions is managed by the Group’s treasury department in accordance with

the Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each

counterparty. Counterparty credit limits are reviewed by the Chief Financial Ofﬁcer and may be updated throughout the year subject

to the approval of the Group’s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigate

ﬁnancial loss through potential counterparty failure.

The credit worthiness of each counterparty is checked against independent credit ratings on at least a weekly basis, with a minimum

rating of ‘BB’. The Group predominantly invests with its lending banks when appropriate.

Sales to retail customers are settled in cash or using major credit and debit cards and therefore the exposure to credit risk is not

considered signiﬁcant.

No credit limits were exceeded during the reporting period and management does not expect any material losses from non-performance

of its counterparties.

Liquidity risk is the risk that the Group will not have sufﬁcient funds to meet its liabilities. Cash forecasts identifying the liquidity

requirements of the Group are produced monthly. The cash forecasts are sensitivity tested for different scenarios and are reviewed

regularly. Forecast ﬁnancial headroom and debt covenant compliance is reviewed monthly during the month-end process to ensure

sufﬁcient headroom exists for at least a 12-month period.

Due to the dynamic nature of the underlying businesses, Group treasury aims to maintain ﬂexibility in funding by keeping committed

credit lines available. A three-year strategic forecast is prepared annually to facilitate planning for future ﬁnancing needs.

Management actively manages the Group’s ﬁnancing requirements and the range of maturities on its debt.

The Group’s core debt facilities comprise of £80.0m bi-lateral revolving credit facilities (30 June 2022: £80.0m) expiring July 2023

(£25m), May 2024 (£40.0m) and February 2025 (£15.0m), and the £44.4m term loan facility (30 June 2022: £78.8m). On 7 August 2023,

the Group signed a new RCF for £25.0m with one of its relationship banks. In addition, the Group’s existing £80.0m of RCFs were

reduced to a total of £75.0m, with each bank providing £25.0m, giving the Group a total RCF of £100m. £25.0m of which expires in

November 2024, with the remaining £75.0m expiring in February 2025. The Group proactively manages its relationships with its

lending group.

The funding policy of the Group is to maintain, as far as practicable, a broad portfolio of debt diversiﬁed by source and maturity,

and to maintain committed facilities sufﬁcient to cover seasonal peak anticipated borrowing requirements.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

204

The table below summarises the maturity proﬁle of the Group’s ﬁnancial liabilities based on contractual undiscounted payments.

On demand

£m

Less than

12 months

£m

1 to 2 years

£m

2 to 5 years

£m

Greater than

5 years

£m

Total

£m

At 30 June 2023

Interest-bearing loans and borrowings

1.5

62.4

–

63.9

Trade and other payables

–

92.9

–

92.9

Lease liabilities

–

42.2

25.9

60.4

40.5

169.0

1.5

197.5

25.9

60.4

40.5

325.8

At 30 June 2022

Interest-bearing loans and borrowings

–

36.3

45.2

–

81.5

Trade and other payables

–

101.8

–

101.8

Lease liabilities

–

40.4

25.8

72.8

42.7

181.7

–

178.5

71.0

72.8

42.7

365.0

Interest payments on the interest-bearing loans and borrowings have been projected until the instruments mature. The bank facility interest payments were based

on current SONIA as at the reporting date.

Capital management

As a result of the difﬁcult conditions that developed in the global capital markets in recent years, the Group’s objectives when

managing capital have been to ensure continuing access to existing debt facilities and to manage the borrowing cost of those facilities

in order to minimise the Group’s interest charge.

Consistent with others in the gaming industry, the Group monitors capital on the basis of leverage ratio. The ratio is calculated as net

debt divided by EBITDA. Net debt is calculated as total borrowings (including ‘loans and borrowings’ as shown in the Group balance

sheet) less cash and short-term deposits, accrued interest and unamortised facility fees. EBITDA is calculated as operating proﬁt

before SDI, depreciation and amortisation from continuing operations.

Due to the impact of COVID-19 on the Group’s performance and resultant negative EBITDA the ratio for the year ended 30 June 2021

does not provide a useful monitor of capital and therefore has not been shown.

As at

30 June

2023

£m

As at

30 June

2022

(restated)

£m

Total loans and borrowings (note 20)

232.7

259.7

Less: Cash and short-term deposits

(60.0)

(95.7)

Less: Accrued interest

(0.4)

(0.5)

Less: Unamortised facility fees

0.6

1.3

Net debt

172.9

164.8

Operating proﬁt (loss) before SDI from continuing operations

19.1

38.5

Add: Depreciation and amortisation

58.0

67.4

EBITDA

77.1

105.9

Leverage ratio

2.2

1.6

Collateral

The Group did not pledge or hold any collateral at 30 June 2023 (30 June 2022: £nil).

Company

The maximum exposure to credit risk at the reporting date is the fair value of its cash and short-term deposits of £nil (30 June 2022: £nil).

The Company does not have any other signiﬁcant exposure to ﬁnancial risks.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

205

22 Deferred tax

The analysis of deferred tax included in the ﬁnancial statements at the end of the year is as follows:

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Deferred tax assets:

Accelerated capital allowances

11.1

14.6

Tax losses carried forward

31.9

9.2

Other UK temporary differences

5.7

5.8

Deferred tax assets

48.7

29.6

Deferred tax liabilities:

Other overseas temporary differences

(2.6)

(3.5)

Business combinations – acquired intangibles

(1.6)

(0.7)

Business combinations – non-qualifying properties

–

(0.6)

Temporary differences on UK casino licences

(38.4)

(43.9)

Deferred tax liabilities

(42.6)

(48.7)

Net deferred tax asset (liability)

6.1

(19.1)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and current tax

liabilities and it is the intention to settle the balances on a net basis. Deferred tax assets and liabilities of £41.1m (30 June 2022: £28.2m)

have been offset and disclosed on the balance sheet as follows:

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Deferred tax assets

7.6

1.4

Deferred tax liabilities

(1.5)

(20.5)

Net deferred tax asset (liability)

6.1

(19.1)

There is a net DTA of £6.0m in respect of the UK, comprising DTAs of £45.0m and DTLs of £39.0m. Deferred tax assets are recognised

to the extent that it is probable that future taxable proﬁts will be available against which they can be used. Of the £45.0m of DTAs,

£20.3m are recognised based on future taxable proﬁts arising from the reversal of existing taxable temporary differences. The remaining

£24.7m of DTAs are recognised based on future taxable proﬁts in excess of the proﬁts arising from the reversal of existing taxable

temporary differences.

Deferred tax assets are reviewed at each reporting date taking into account the recoverability of the deferred tax assets, future

proﬁtability and any restrictions on use. In considering their recoverability, the Group takes into account all relevant and available

evidence to assess future proﬁtability over a reasonably foreseeable time period. This consideration includes the fact that the UK group

has suffered a loss for accounting and tax purposes in the current period. In assessing the probability of recovery, the Directors have

reviewed the Group’s ﬁve-year Strategic Plan that has been used for both the Going Concern and the ﬁxed asset impairment testing.

This plan anticipates the existence of future taxable proﬁts as the Group continues its recovery from the impact on trading from

COVID-19. This recovery is expected primarily in the Grosvenor business with recent and ongoing investment in refurbishing venues

and product enhancement driving additional revenues. Based on the Group’s ﬁve-year Strategic Plan, the deferred tax asset recognised

on tax losses is expected to be recovered by 2028.

In addition to the above the Group has unrecognised UK tax losses of £0.5m (30 June 2022: £0.4m) and overseas tax losses of £27.3m

(30 June 2022: £16.1m) that are carried forward for offset against suitable future taxable proﬁts. No deferred tax asset has been

recognised in relation to these losses as no utilisation is currently anticipated. Included in unrecognised tax losses are losses of £1.4m

that will expire between 2027 and 2029 (30 June 2022: £1.9m that will expire between 2026 and 2029). Other losses will be carried

forward indeﬁnitely.

The Group has UK capital losses carried forward of £779m (30 June 2022: £779m). These losses have no expiry date and are available

for offset against future UK chargeable gains. No deferred tax asset (30 June 2022: £nil) has been recognised in respect of these

capital losses as no further utilisation is currently anticipated.

Temporary differences associated with Group investments

There was no deferred tax liability recognised (30 June 2022: £nil) for taxes that would be payable on the unremitted earnings of

certain subsidiaries. The Group has determined that any unremitted earnings that do not fall within the dividend exemption introduced

in the Finance Act 2009 will not be distributed in the foreseeable future and the parent company does not foresee giving such consent

at the balance sheet date.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

206

The deferred tax included in the Group income statement is as follows:

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Deferred tax in the income statement

Accelerated capital allowances

(3.5)

(5.0)

Tax losses

22.7

(0.3)

Business combinations – property lease fair value adjustments

0.6

0.1

Temporary differences on UK casino licences

5.5

2.9

Other temporary differences

(0.2)

(1.7)

Total deferred tax credit/(charge)

25.1

(4.0)

The deferred tax movement on the balance sheet is as follows:

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

As at start of year

(19.1)

(14.7)

Exchange adjustments

0.1

(0.1)

Acquisition of Rank Interactive Limited

–

(0.3)

Deferred tax (charge) credit in the income statement

25.1

(4.0)

Deferred tax credit to equity

–

As at end of year

6.1

(19.1)

23 Provisions

Group

Property-

provision

£m

Disposal

provision

£m

Indirect tax

provision

£m

Pay

provision

£m

Warranty

provision

£m

Total

£m

At 1 July 2022

6.8

3.9

1.2

0.1

0.5

12.5

Created

28.7

–

28.7

Charge to the income statement – SDI

7.4

–

7.4

Release to the income statement – SDI

(3.2)

(3.7)

–

(0.3)

(7.2)

Utilised in the year

(2.4)

–

(2.4)

At 30 June 2023

37.3

0.2

1.2

0.1

0.2

39.0

Current

5.6

0.2

1.2

0.1

0.2

7.3

Non-current

31.7

–

31.7

Total

37.3

0.2

1.2

0.1

0.2

39.0

Provisions have been made based on management’s best estimate of the future cash ﬂows, taking into account the risks associated

with each obligation.

Property-related provisions

Where the Group no longer operates from a leased property, onerous property contract provisions are recognised for the least net cost

over the expected economic beneﬁts. Unless a separate exit agreement with a landlord has already been agreed, the Group’s policy

is that this onerous contract provision includes all unavoidable costs of meeting the obligations of the contract. The amounts provided

are based on the Group’s best estimates of the likely committed outﬂows and site closure dates. These provisions do not include lease

liabilities, however do include unavoidable costs related to the lease such as service charges, insurance and other directly related

costs. As at 30 June 2023, property related provision include £34.4m (2022: £1.7m) provision for dilapidations and £2.8m (2022: £5.1m)

onerous contracts provision.

Provisions for dilapidations are recognised where the Group has the obligation to make-good its leased properties. Following the recent

closures of venues in FY21, FY22 and FY23, the possibility of future closures and the downturn in the trading outlook, together with

a hardening position from landlords and recessionary environment making certain properties less attractive, the Group recognised

an additional asset and liability of £28.7m. These provisions are recognised based on historically settled dilapidations which form the

basis of the estimated future cash outﬂows. Any difference between amounts expected to be settled and the actual cash outﬂow will

be accounted for in the period when such determination is made within the income statement.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

207

23 Provisions (continued)

Where the Group is able to exit lease contracts before the expiry date or agree sublets, this results in the release of any associated

property provisions. Such events are subject to the agreement of the landlord, therefore the Group makes no assumptions on the ability

to either exit or sublet a property until a position is contractually agreed.

Disposal provisions

In prior years, a provision has been made for legacy industrial disease and personal injury claims, and other directly attributable costs

arising as a consequence of the sale or closure of previously owned businesses.

During the period, the Group have re-considered this provision by reviewing the historic claims and any ﬁnal settlements made.

The nature and timing of any personal injury claims is uncertain and therefore, in most cases, the payment could not be determined

as probable. It was therefore determined necessary to release the provision of £3.7m and recognise the possible settlement of legacy

industrial disease and personal injury claims as a contingent liability (see note 32).

Indirect tax provision

The indirect tax provision relates to an amusement machine licence duty claim by HMRC. The balance of £1.2m (30 June 2022: £1.2m)

represents the Directors’ best estimate of the outﬂow likely to arise.

Pay provision

The balance of £0.1m (30 June 2022: £0.1m) relates to the remaining settlements associated with the National Minimum Wage

Regulations for those employees for whom the Group is still in contact for payment details.

Warranty provision

As a result of the Group’s sale of its Blankenberge Casino in Belgium, a warranty provision of £0.8m was recognised in SDI as at

30 June 2021. This amount represented Rank’s best estimate of liability in relation to certain indemnities and warranties provided

to the purchaser. In the event that the provision for warranties is not called upon over the ﬁve-year period, this amount will be released

to the Group income statement as an additional proﬁt on sale. During the year, the Group recognised £0.3m additional proﬁt on sale

within the SDI of the Group income statement (30 June 2022: £0.2m). The release in the year represents Rank’s best estimate of

liabilities that have now passed due to the passage of time in which the purchaser can no longer claim.

Company

In prior years, a provision has been made for legacy industrial disease and personal injury claims, and other directly attributable costs

arising as a consequence of the sale or closure of previously owned businesses.

During the period, the Company have re-considered this provision by reviewing the historic claims and any ﬁnal settlements made.

The nature and timing of any personal injury claims is uncertain and therefore, in most cases, the payment could not be determined

as probable. It was therefore determined necessary to release the provision of £1.0m and recognise the possible settlement of legacy

industrial disease and personal injury claims as a contingent liability (see note 32).

24 Share capital and reserves

As at 30 June 2023

As at 30 June 2022

Number

Nominal

value

£m

Number

Nominal

value

£m

Authorised ordinary shares of 13

p each

1,296.0

180.0

1,296.0

180.0

Issued and fully paid

As at 30 June 2023

As at 30 June 2022

Number

Nominal

value

£m

Number

Nominal

value

£m

At start of the year

468.4

65.0

468.4

65.0

At end of the year

468.4

65.0

468.4

65.0

Share premium

As at 30 June 2023

As at 30 June 2022

Number

Nominal

value

£m

Number

Nominal

value

£m

At start of the year

468.4

155.7

468.4

155.7

At end of the year

468.4

155.7

468.4

155.7

Total shares in issue at 30 June 2023 are 468,429,541 (2022: 468,429,541).

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

208

25 Notes to cash flow

Reconciliation of (Loss)/proﬁt for the year to cash generated from operations:

Group

Company

Note

Year ended

30 June

2023

£m

Year ended

30 June 2022

(restated)

£m

Year ended

30 June

2023

£m

Year ended

30 June

£m

Loss/proﬁt for the year

(95.3)

64.9

(202.2)

(14.5)

Adjustments for:

Depreciation and amortisation

60.1

67.4

–

Amortisation of arrangement fees

1.3

–

Loss on disposal of assets

0.2

–

Net ﬁnancing charge

12.3

13.4

33.7

15.5

Income tax expense (credit)

0.6

6.4

(12.4)

–

Share-based payments

1.1

(0.3)

–

Separately disclosed items

101.5

(46.2)

182.6

–

81.8

105.6

1.7

1.0

Decrease (increase) in inventories

0.2

(0.3)

–

Decrease (increase) in other receivables

11.2

(18.4)

(8.3)

–

(Decrease) increase in trade and other payables

(8.4)

12.5

29.6

14.6

84.8

99.4

23.0

15.6

Cash utilisation of provisions (see note 23)

(2.4)

(1.8)

(1.7)

(0.1)

Cash (payments) receipts in respect of separately disclosed items

(7.1)

72.4

–

Cash generated from operations

75.3

170.0

21.3

15.5

The Group restated the prior year cash ﬂow format to start from proﬁt for the year instead of operating proﬁt. This method provides

more comprehensive information which would be useful to the reader of the consolidated and Company ﬁnancial statements.

26 Cash and short-term deposits

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Cash at bank and on hand

58.1

75.7

Short-term deposits

1.9

20.0

Total

60.0

95.7

The analysis of cash and short-term deposits by currency is as follows:

Group

As at

30 June

2023

£m

As at

30 June

2022

£m

Sterling

42.8

78.3

Euro

14.3

14.1

Others

2.9

3.3

Total

60.0

95.7

Cash at bank earns interest at ﬂoating rates based on daily bank deposit rates. Short-term deposits are made for varying periods

depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates.

Included in cash is £8.9m (2022: £8.0m) relating to customer funds which is matched by liabilities to customers of equal value within

trade and other payables (note 18).

Company

At 30 June 2023 the Company had cash and short-term deposits of £nil (30 June 2022: £nil).

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

209

27 Reconciliation of cash flow from financing activities

Reconciliation of net debt:

Group

As at

30 June

2023

£m

As at

30 June

2022

(restated)

£m

Cash and cash equivalents

58.5

95.7

Loans and borrowings

(62.4)

(78.8)

Lease liabilities

(169.0)

(181.7)

Net debt

(172.9)

(164.8)

For the purpose of the statements of cash ﬂow, cash and cash equivalents comprise the following:

Group

As at

30 June

2023

£m

As at

30 June

2022

(restated)

£m

Cash at bank and on hand

58.1

75.7

Short-term deposits

1.9

20.0

60.0

95.7

Bank overdrafts

(1.5)

–

Total

58.5

95.7

Changes in liabilities arising from ﬁnancing activities:

Transactions year ended

30 June 2022

As at

30 June

2023

£m

Cash ﬂow

Non-cash

changes

As at

30 June

2022

£m

Lease liabilities

169.0

(43.6)

30.9

181.7

Term loans

44.4

(34.5)

0.1

78.8

Revolving credit facility

18.0

–

Total borrowings

231.4

(60.1)

31.0

260.5

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

210

28 Employees and Directors

(a) Employee benefit expense for the Group during the year

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Wages and salaries

182.6

168.4

Social security costs

17.7

16.7

Pension costs

5.5

5.1

Share-based payments

1.1

(0.3)

206.9

189.9

The Company has no employees (year ended 30 June 2022: nil).

(b) Average monthly number of employees

Full-time

Year ended

30 June

2023

Part-time

Year ended

30 June

2023

Total

Year ended

30 June

2023

Full-time

Year ended

30 June

2022

Part-time

Year ended

30 June

2022

Total

Year ended

30 June

2022

Grosvenor Venues

2,401

1,502

3,903

2,558

1,515

4,073

Mecca Venues

364

1,287

1,651

573

1,385

1,958

Digital

733

752

660

677

Enracha Venues

484

566

435

505

Central Costs

355

371

343

360

4,337

2,906

7,243

4,569

3,004

7,573

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Salaries and short-term employee beneﬁts (including social security costs)

1.8

2.3

Termination beneﬁts

–

Post-employment beneﬁts

0.1

Share-based payments

–

0.1

1.9

2.5

Included in key management compensation are bonuses of £nil in respect of the current year (year ended 30 June 2022: £nil).

Key management is deﬁned as the Senior Management Team of the Group excluding the Executive Directors, details of which are

set out on page 103 and at www.rank.com. Further details of the emoluments received by the Executive Directors are included in the

Remuneration Report.

(d) Directors’ interests

The Directors’ interests in shares of the Company, including conditional awards under the Long-Term Incentive Plan, are detailed

in the Remuneration Report.

(e) Total emoluments of the Directors of The Rank Group plc

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Salaries and short-term employee beneﬁts (including social security costs)

1.5

1.3

Post-employment beneﬁts

–

0.1

Share-based payments

0.1

1.6

1.5

No Director accrued beneﬁts under deﬁned beneﬁt pension schemes in neither year nor is a member of the Group’s deﬁned contribution

pension plan in either year. Further details of emoluments received by Directors, including the aggregate amount of gains made by

Directors upon the vesting of conditional share awards, are disclosed in the Remuneration Report on page 123.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

211

29 Share-based payments

During the year ended 30 June 2023, the Company operated an equity-settled Long-Term Incentive Plan (‘LTIP’). Further details of the

LTIP are included in the Remuneration Report on pages 123 to 125. The LTIP is an equity-settled scheme and details of the movements

in the number of shares are shown below:

As at

30 June

2023

As at

30 June

2022

Outstanding at start of the year

8,108,854

7,518,376

Granted

5,773,421

3,937,473

Exercised

(148,858)

(98,489)

Expired

(2,561,969)

(1,802,540)

Forfeited

(845,548)

(1,445,966)

Outstanding at end of the year

10,325,900

8,108,854

Weighted average remaining life

0.8 years

1.6 years

Weighted average fair value for shares granted during the year (p)

33.2p

101.13p

There are six LTIP awards currently in issue during the ﬁnancial year ended 30 June 2023.

LTIP – 2017/18 award

Vests in three tranches; 33.3% in October 2021, 33.3% in October 2022 and 33.3% in October 2023. All LTIP awards have a £nil

exercise price.

LTIP – 2020/21 award

Vests in a single tranche in December 2023. All LTIP awards have a £nil exercise price.

LTIP – 2021/22 award

Vests in a single tranche in September 2024. All LTIP awards have a £nil exercise price.

Recovery Incentive Scheme (RIS) – 2021/22 award

Vests in a single tranche in October 2023 for the non-executive RIS. Vests in two tranches; 50% in October 2022 and 50% in October 2023

for the executive RIS. All RIS awards have a £nil exercise price.

LTIP – 2021/22 Exec award

Vests in two tranches. 50% in May 2023 and 50% in March 2024. All LTIP awards have a £nil exercise price.

LTIP – 2022/23 award

Vests in a single tranche in September 2025. All LTIP awards have a £nil exercise price.

The number of LTIP awards and the fair value per share granted during the year were as follows:

30 June

2023

30 June

2022

Number

5,773,421

2,215,812

Weighted average fair value per share

33.2p

74.1p

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

212

The fair value of the LTIP awards granted during the year is based on the market value of the share award at grant date less

the expected value of dividends forgone. The following table lists the inputs used in assessing the fair value of the share awards:

30 June

2023

30 June

2022

Dividend yield (%)

2.00

Vesting period (years)

3.00

2.00

Weighted average share price (p)

75.9p

173.0

The number of RIS awards and the fair value per share granted during the prior year were as follows:

30 June

2022

Number

1,535,025

Weighted average fair value per share

162.9p

The number of LTIP Exec awards and the fair value per share of the LTIP Exec awards granted during the prior year were as follows:

30 June

2022

Number

186,636

Weighted average fair value per share

110.1p

The fair value of the LTIP Exec awards granted during the prior year is based on the market value of the share award at grant date

less the expected value of dividends forgone. The following table lists the inputs used in assessing the fair value of the share awards:

30 June

2022

Dividend yield (%)

2.00

Vesting period (years)

2.00

Weighted average share price (p)

106.0

To the extent that grants are subject to non-market based performance conditions, the expense recognised is based on expectations

of these conditions being met, which are reassessed at each balance sheet date. The Group recognised a £1.1m charge (30 June 2022:

£0.3m credit) in operating proﬁt for costs of the scheme in the current year.

30 Retirement benefits

Deﬁned contribution scheme

The Group operates the Rank Group Stakeholder Pension Plan (‘the Plan’) which is externally funded and the Plan’s assets are held

separately from Group assets. During the year ended 30 June 2023, the Group contributed a total of £5.5m (year ended 30 June 2022:

£2.4m) to the Plan. There were no signiﬁcant contributions outstanding at the balance sheet date in either year.

Other pension commitment

The Group has an unfunded pension commitment relating to three former executives of the Group. At 30 June 2023, the Group’s

commitment was £3.4m (30 June 2022: £3.6m). The Group paid £0.2m (year ended 30 June 2022: £0.2m) in pension payments during

the year. The actuarial gain arising on the commitment, resulting from the changes in assumptions outlined below in the year was

£nil (year ended 30 June 2022: £0.1m) before taxation and £nil after taxation (year ended 30 June 2022: £0.1m).

30 June

2023

% p.a.

30 June

2022

% p.a.

Discount rate

5.1

3.8

Pension increases

5.0

4.9

The obligation has been calculated using the S2 mortality tables with a 1.5% per annum improvement in life expectancy.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

213

31 Leases

Group as a Lessee

The Group leases various properties and equipment. Rental contracts are made for various ﬁxed periods ranging up to 94 years.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements

do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise

an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended

(or not terminated). The assessment is reviewed if a signiﬁcant event or a signiﬁcant change in circumstances occurs which

affects this assessment and that is within the control of the Group as a lessee.

Set out below are the carrying amounts of lease liabilities and the movements during the period:

30 June

2023

£m

30 June

2022

£m

At the beginning of the year

181.7

206.9

Additions

47.8

21.9

Accretion of interest

6.5

6.6

Payments

(66.6)

(53.7)

Foreign exchange

(0.4)

–

At the end of the year

169.0

181.7

Current liabilities

42.2

40.4

Non-current liabilities

126.8

141.3

Total

169.0

181.7

The maturity analysis of lease liabilities are disclosed below:

As at 30 June 2023

Present value

of the

minimum

lease

payments

£m

Total

minimum

lease

payments

£m

Within 1 year

42.2

49.1

After 1 year but within 2 years

25.9

30.2

After 2 years but within 5 years

60.4

70.3

After 5 years

40.5

47.2

169.0

196.8

Less: total future interest expenses

(27.8)

Present value of lease liabilities

169.0

The following are the amounts recognised in the Group income statement:

Year ended

30 June

2023

£m

Depreciation expense of right-of-use assets

20.9

Interest expense on lease liabilities

6.5

Total amount recognised in the income statement

27.4

The Group has several lease contracts that include extension and termination options. These options are negotiated by management

to provide ﬂexibility in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises

signiﬁcant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

214

Group as a lessor

The Group is party to a number of leasehold property contracts. Where appropriate the Group will sub-let properties which are vacant,

in order to derive lease income which is shown net of lease costs. Lease income as at 30 June 2023 from lease contracts in which the

Group sub-lets certain property space is £1.7m (year ended 30 June 2022: £1.0m).

Future minimum rentals receivable under non-cancellable operating leases as at 30 June are as follows:

As at

30 June

2023

Total

minimum

lease

payments

£m

Within 1 year

2.6

After 1 year but within 2 years

0.9

After 2 years but within 5 years

1.0

After 5 years

1.7

Total

6.2

Capital commitments

At 30 June 2023, the Group has contracts placed for future capital expenditure of £6.2m (30 June 2022: £15.3m).

32 Contingent liabilities and contingent assets

Contingent liabilities

Group

Property arrangements

The Group has certain property arrangements under which rental payments revert to the Group in the event of default by the third

party. At 30 June 2023, it is not considered probable that the third party will default. As such, no provision has been recognised in

relation to these arrangements. If the third party were to default on these arrangements, the obligation for the Group would be £0.8m

on a discounted basis.

Legal and regulatory landscape

Given the nature of the legal and regulatory landscape of the industry, from time to time the Group receives notices and

communications from regulatory authorities and other parties in respect of its activities and is subject to compliance assessments

of its licensed activities.

The Group recognises that there is uncertainty over any ﬁnes or charges that may be levied by regulators as a result of past events

and depending on the status of such reviews, it is not always possible to reliably estimate the likelihood, timing and value of potential

cash outﬂows.

Disposal claims

As a consequence of historic sale or closure of previously owned businesses, the Group may be liable for legacy industrial disease

and personal injury claims alongside any other directly attributable costs. The nature and timing of these claims is uncertain and

depending on the result of the claim’s assessment review, it is not always possible to reliably estimate the likelihood, timing and

value of potential cash outﬂows.

Contingent consideration

On 21 April 2022, the Group completed the purchase of the remaining 50% shareholding of Rank Interactive Limited (formerly known

as Aspers Online Limited) for a total consideration £1.3m. Of this consideration, £0.5m was paid in cash on completion in lieu of the

outstanding loan balance the Company owed to the seller and £0.8m in contingent consideration included in Trade and other payables

of the Group balance sheet. The contingent consideration will be equivalent to a percentage of the net gaming revenue generated from

the acquired customer database. A present value of £0.8m has been provisionally recognised for the contingent consideration and is

dependent upon the date a competing online gaming operation is established.

At 30 June 2023, the Group settled £0.4m of the contingent consideration leaving a balance of £0.4m.

Company

Disposal claims

As a consequence of historic sale or closure of previously owned businesses, the Group may be liable for legacy industrial disease

and personal injury claims alongside any other directly attributable costs. The nature and timing of these claims is uncertain and

depending on the result of the claim’s assessment review, it is not always possible to reliably estimate the likelihood, timing and

value of potential cash outﬂows.

Guarantees

At 30 June 2023, the Company has made guarantees to subsidiary undertakings of £45.0m (30 June 2022: £79.5m).

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

215

33 Related party transactions

Group

Details of compensation paid to key management are disclosed in note 28.

Entities with significant influence over the Group

Guoco Group Limited (Guoco), a company incorporated in Bermuda, and listed on the Hong Kong Stock Exchange has a controlling

interest in The Rank Group Plc. The ultimate parent undertaking of Guoco is GuoLine Capital Assets Limited (‘GuoLine’) which is

incorporated in Jersey. At 30 June 2023, entities controlled by GuoLine owned 57.4% (30 June 2022: 56.1%) of the Company’s shares,

including 53.3% (30 June 2022: 52.0%) through Guoco’s wholly-owned subsidiary, Rank Assets Limited, the Company’s immediate

parent undertaking. Hong Leong Company (Malaysia) Berhad (‘Hong Leong’) was the ultimate parent company of Guoco until

16 April 2021 whereupon, following an internal restructure, GuoLine became the ultimate parent company of Guoco.

For further information see page 149.

Company

The following transactions with subsidiaries occurred in the year:

Year ended

30 June

2023

£m

Year ended

30 June

2022

£m

Interest payable to subsidiary undertaking

(33.7)

(15.0)

During the year, Rank Group Finance Plc, a subsidiary of the Company, received cash from the Company of £nil (year ended 30 June 2022:

received cash from the Company of £0.1m).

34 Acquisition of subsidiary undertakings

On 21 April 2022, the Group completed the purchase of the remaining 50% shareholding of Rank Interactive Limited (formerly known

as Aspers Online Limited) for a total consideration £1.3m. Of this consideration, £0.5m was paid in cash on completion in lieu of the

outstanding loan balance the Company owed to the seller and £0.8m in contingent consideration. The contingent consideration will

be equivalent to a percentage of the net gaming revenue generated from the acquired customer database. A present value of £0.8m has

been provisionally recognised for the contingent consideration and is dependent upon the date a competing online gaming operation

is established.

At the date of acquisition, the fair value of assets acquired and liabilities assumed, goodwill and consideration, including the fair value

of the Group’s pre-acquisition 50% shareholding at the acquisition date, are outlined below. The fair value of operational cash and trade

and other payables totalling £0.5m corresponds to their book value.

£m

Customer relationships

1.4

Cash

0.1

Trade and other payables

(0.6)

Deferred tax liability

(0.4)

Net assets acquired

0.5

Goodwill

2.1

Total consideration

2.6

Notes to the financial statements

Continued

The Rank Group Plc

Annual Report 2023

216

The fair value of each component of consideration is analysed as:

£m

Cash

–

Loan settlement

0.5

Contingent cash consideration

0.8

Fair value of previously existing interest in joint venture

1.3

Total

2.6

Cash consideration of £1 for shares.

The identiﬁed intangible assets recognised separately from goodwill are as follows:

£m

Customer relationships

1.4

Total

1.4

The goodwill consists of future revenue opportunities attributable to new customers, the new brands and development of technology

and amounts that are required for general operational purposes. No amount of the goodwill recognised is expected to be deductible

for tax purposes.

At the date of acquisition, the Group recognised a gain of £0.8m on remeasurement of its pre-acquisition 50% shareholding and

acquisition related costs of £0.02m both of which were recognised as SDIs in the Group income statement.

In the year ended 30 June 2022, Rank Interactive Limited contributed statutory revenue of £0.8m and proﬁt before tax of £nil. If the

acquisition had occurred at the beginning of the year, the continuing statutory revenues of the entity in the 12 months to 30 June 2022

would have been £6.1m and loss before tax would have been £0.2m.

At 30 June 2023, the Group settled £0.4m of the contingent consideration leaving a balance of £0.4m.

35 Post balance sheet events

In August 2023, the Group secured a ﬁnancing package which totalled £100m of revolving credit facilities. £25m is committed until

November 2024 and the remaining £75m is committed until February 2025. The Group subsequently repaid the remaining term loan

of £44.4m.

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

217

Year

ended

30 June

2023

£m

Year

ended

30 June

2022

(restated)

£m

Year

ended

30 June

2021

(restated)

£m

Year

ended

30 June

2020

£m

Year

ended

30 June

2019

£m

Continuing operations

Revenue

681.9

644.0

329.6

629.7

695.1

Operating proﬁt (loss) before separately disclosed items

19.1

38.5

(85.4)

49.1

75.7

Separately disclosed items

(128.9)

42.3

(8.4)

(27.6)

(36.7)

Group operating proﬁt (loss)

(109.8)

80.8

(93.8)

21.5

39.0

Total net ﬁnancing charge

(12.9)

(7.8)

(14.4)

(8.1)

(4.4)

Proﬁt (loss) before taxation

(122.7)

73.0

(108.2)

13.4

34.6

Taxation

27.1

(16.9)

10.4

(5.2)

(7.0)

Proﬁt (loss) after taxation from continuing operations

(95.6)

56.1

(97.8)

8.2

27.6

Discontinued operations

0.3

8.8

24.9

1.2

1.5

Proﬁt (loss) for the year

(95.3)

64.9

(72.9)

9.4

29.1

Basic earnings (loss) per ordinary share

1.2p

4.0p

(20.5)p

7.0p

15.3p

Total ordinary dividend (including proposed) per ordinary share

0.00p

2.80p

7.65p

Group funds employed

Intangible assets, property, plant and equipment and

right-of-use assets

618.4

708.3

750.6

810.7

609.3

Provisions

(39.0)

(12.4)

(21.4)

(18.9)

(46.8)

Other net liabilities

(76.5)

(106.0)

(111.3)

(128.4)

(166.2)

Total funds employed at year-end

502.9

589.9

617.9

663.4

396.3

Financed by

Ordinary share capital and reserves

330.0

425.1

360.3

365.9

398.1

Net (cash) debt

172.9

164.8

257.6

297.5

(1.8)

502.9

589.9

617.9

663.4

396.3

Average number of employees (000s)

7.2

7.6

7.9

8.4

9.0

Five year review

The Rank Group Plc

Annual Report 2023

218

Annual General Meeting

The 2023 Annual General Meeting (‘AGM’)

will be held on 19 October 2023, providing

a valuable opportunity for communication

between the Board and shareholders.

Further details on how shareholders will

be able to participate in the meeting will

be detailed as part of the AGM notice.

Shareholders will be invited to vote on the

formal resolutions contained in the AGM

notice, which will be published at least

20 working days before the AGM. The full

text of notice of the meeting, together with

explanatory notes, will be set out in a

separate document at www.rank.com.

If a shareholder has chosen paper

information, the notice will be enclosed

with their hard copy of this Annual Report.

Shareholders wishing to change their

election may do so at any time by

contacting the Company’s registrar,

details of which can be found below

and on our website at www.rank.com.

Shareholders may use electronic means

to vote, or appoint a proxy to vote on their

behalf, at the annual and other general

meetings of the Company.

Following the meeting, the business

presentation, voting results and a summary

of the questions and answers are made

available at www.rank.com, or in printed

format on request.

Registrar

All administrative enquiries relating

to shares should, in the ﬁrst instance,

be directed to the Company’s registrar

(quoting reference number 1235) and

clearly state the registered shareholder’s

name and address. Please write to The

Rank Group Plc registrar, Equiniti Limited,

Aspect House, Spencer Road, Lancing,

BN99 6DA. Tel: +44 (0)371 384 2098

If calling from overseas please ensure

you are using the correct country code.

Shareview

The Shareview portfolio service from the

Company’s registrar gives shareholders

more control of their Rank shares and

other investments including:

–

direct access to data held for them

on the share register including recent

share movements and dividend details;

–

a recent valuation of their portfolio; and

–

a range of information and practical

help for shareholders including

how they can elect to receive

communications electronically.

It is easy and free to set up a portfolio

– shareholders will just need the

shareholder reference printed on their

proxy form or dividend stationery. Please

visit the following website for more details:

www.shareview.co.uk.

Payment of dividends

The Company does not operate a dividend

re-investment plan. Shareholders may ﬁnd

it more convenient to make arrangements

to have dividends paid directly to their

bank account. The advantages of this

are that the dividend is credited to a

shareholder’s bank account on the

payment date, there is no need to present

cheques for payment and there is no risk

of cheques being lost in the post.

To set up a dividend mandate or to

change an existing mandate please contact

Equiniti Limited, our registrar, whose

contact details are above. Alternatively,

shareholders who use Equiniti’s Shareview

can log on to www.shareview.co.uk and

follow the online instructions.

Shareholder information

A wide range of information for

shareholders and investors is available

in the Investors area of the Rank corporate

website, www.rank.com.

Frequently asked questions

We have a shareholder ‘frequently asked

questions’ section on our website which

provides answers to many questions:

www.rank.com/en/investors/shareholder-

centre/faqs.html.

Capital gains tax

For the purpose of calculating UK capital

gains tax on a disposal of ordinary shares

in the Company held since 31 March 1982

(including shares held in the predecessor

company, The Rank Organisation Plc),

the price of the Company’s ordinary shares

at that date was 190p per share. This price

should be adjusted for the effects of the

rights issue in January 1990, the enhanced

share alternative in July 1993, the sub-

division and consolidation of shares in

March 1994, the enhanced scrip dividend

in March 1998, and the 18 for 25 sub-

division and share consolidation (aligned

with the 65p special dividend payment)

which took place in March 2007. More

information regarding these adjustments

is available on www.rank.com.

Shareholder security

We are aware that shareholders can

on occasion receive unsolicited telephone

calls concerning their Rank shares. These

communications tend to be from overseas-

based ‘brokers’ who offer a premium price

for your Rank shares but ask you to make

an upfront payment, typically in the form

of an insurance bond. We recommend that

before paying any money you:

–

obtain the name of the person

and ﬁrm contacting you;

–

check the FCA register at

https://register.fca.org.uk to ensure

they are authorised;

–

use the details on the FCA register

to contact the ﬁrm;

–

call the FCA Consumer Helpline on

0800 111 6768 (freephone) if there are

no contact details on the FCA register

or you are told they are out of date; and

–

search the FCA’s list of unauthorised ﬁrms

and individuals to avoid doing business

with: www.fca.org.uk/consumers/

unauthorised-ﬁrms-individuals

Shareholder information

2023/24 financial calendar

Not applicable

Record date for 2022/23 ﬁnal dividend

19 October 2023

Annual general meeting and trading update

Not applicable

Payment date for 2022/23 ﬁnal dividend

1 February 2024

Interim results announcement

Lines are open 08:30 to 17:30, Monday to Friday

(excluding public holidays in England and Wales).

The Rank Group Plc

Annual Report 2023

Strategic report

Governance report

Financial statements

Overview

219

If you use an unauthorised ﬁrm to

buy or sell shares or other investments,

you will not have access to the Financial

Ombudsman Service or Financial Services

Compensation Scheme (‘FSCS’) if things

go wrong.

Below, please ﬁnd the link to the FCA’s

website which gives information on scams

and swindles, which shareholders may ﬁnd

helpful: www.fca.org.uk/consumers/

protect-yourself-scams.

Further information on fraud can be found

at www.actionfraud.police.uk

Action Fraud’s helpline is 0300 123 2040.

We recommend that you report any

attempted share frauds to the authorities,

since providing information with regard

to how the fraudsters have contacted and

dealt with you will assist the authorities

in understanding the fraudsters’ way of

operating so as to enable them to disrupt and

prevent these activities and prosecute them.

ShareGift

Shareholders with a very small number

of shares, the value of which may make it

uneconomical to sell, may wish to consider

donating them to charity through ShareGift,

a registered charity administered by

The Orr Mackintosh Foundation.

Further information about ShareGift

is available at

www.sharegift.org or by writing to:

ShareGift

PO Box 72253

London SW1P 9LQ

Tel: 020 7930 3737

For any other information please

contact the following persons

at our registered ofﬁce:

Asha Magnus

, Company Secretary

Sarah Powell

, Director of Investor

Relations & ESG

Registered office

The Rank Group Plc,

TOR, Saint-Cloud Way,

Maidenhead SL6 8BN

Tel: 01628 504 000

The Rank Group Plc

Registered in England and Wales

Company number: 03140769

Shareholder information

Continued

The Rank Group Plc

Annual Report 2023

220

For more information, visit our website.

www.rank.com

Printed by Park Communications.

The material used in this book is 100%

recycled. The paper mill and printer are both

registered with the Forestry Stewardship

Council (FSC)® and additionally have the

Environmental Management System ISO 14001.

It has been printed using 100% offshore wind

electricity sourced from UK wind and all the

inks used are vegetable based.

Designed and produced by Gather.london

The Rank Group Plc

TOR

Saint-Cloud Way

Maidenhead

SL6 8BN

Tel: 01628 504 000

www.rank.com

Company registration number: 03140769

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