To excite
and to entertain
Annual Report 2022
Contents
Overview
IC
01 About us
Introduction
Strategic Report
12 Chair’s letter
14 Our business
16 Chief Executive’s review
26 CFO’s review
28 Our external environment
32 How we create long-term value
40 Our strategy
52 Our key performance indicators
54 Our approach to ESG
72 Our business model
74 Risk management
82 Compliance statements
84 Alternative Performance Measures
Governance Report
88 Chair’s introduction to governance
91 2018 Code Compliance Statement
92 How we are governed
94 Our Board
98
How governance supports delivery
– A year in review
100 Nominations Committee Report
107 Audit Committee Report
114
ESG & Safer Gambling Committee
Report
118 Finance Committee Report
120 Remuneration Committee Report
123 Remuneration Policy
131 Annual Report on Remuneration
143 Directors’ Report
147 Directors’ Responsibilities
Financial Statements
150 Independent auditor’s report
160 Group income statement
161
Group statement of comprehensive
income
162 Balance sheets
164 Statements of changes in equity
166 Statements of cash flow
167 Notes to the financial statements
212 Five-year review
Other Information
213 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.
Overview
2022 business highlights
– Underlying operating profit1 for the full
year was £40.4m, in line with guidance
of £40m provided in June 2022.
– Second half performance was adversely
impacted by difficult trading conditions
in Grosvenor venues, particularly in
London, which led to a reset of operating
profit guidance for the full year.
– Underlying venues Net Gaming Revenue
(‘NGR’)1 up 209% year-on-year in the
year but down 19% on CY 20192
reflecting the continued impact of, and
gradual recovery from, the pandemic.
– Underlying digital NGR1 grew 4%
year-on-year supported by a 178%
growth in active cross-channel
customers.
– Six-fold increase in underlying digital
operating profit1 year-on-year to £18.7m
as further synergies realised from the
technology integration following the
Stride acquisition in October 2019.
– Mecca digital business successfully
migrated to the RIDE platform in
January 2022 with the final brand,
Grosvenor, migrating across by end
of Q1 2022/23.
– Underlying venues operating profit1
included energy costs of £23.2m, up
significantly on the CY 20192 cost of
£13.0m. Energy costs for 2022/23 would
be approximately £46m based on
current market prices.
– Mecca being reshaped to return to
profitability with seven venues closed
in Q1 2022/23.
– The strong cash position has enabled
the acceleration of the Group’s
Transformation 2.0 programme, which
is focused on improving the customer
offer and growing customer numbers,
has delivered with good returns from
the £6.2m Grosvenor investment into
new product and £5.3m casino
refurbishments.
– Progression of the Group’s ESG
programme continues with significant
developments introduced throughout the
year to further enhance customer safety
including a new online markers of harm
model, a new risk model across Grosvenor
casinos and the rolling out of a new
machine management system in Mecca.
– Whilst the delay to the publication of
the UK Government’s gambling review
White Paper is disappointing, we
continue to build support for a
programme of modest reforms for the
land-based casino and bingo sectors.
Financial
– Underlying operating profit1 of £40.4m
compares with a loss of £82.4m in
2020/21 which was more heavily
impacted by the pandemic with venues
closed at various points throughout
the year.
– Group operating profit of £82.1m reflects
the net receipt of £77.1m from a VAT
repayment, impairment charge of
£25.8m net of impairment reversal, up
from a Group operating loss of £92.9m
in the prior year.
– Group returned to net cash position
pre-IFRS 16 of £19.1m, supported by
£100.7m cash inflow from operations
and £83.1m of VAT receipts.
– Bank waiver restrictions lifted and
returned to standard debt covenants
from 1 July 2022.
1. On a like-for-like (‘LFL’) basis which removes
the impact of club openings, closures, acquired
businesses, foreign exchange movements and
discontinued operations.
2. Year-on-year comparisons for our venues are
distorted by significant periods of closure,
curfews and regional restrictions in the 2020/21
financial year. The last comparable 12-month
period that was unaffected by the COVID-19
pandemic was the 12 months to 31 December
2019 (‘CY 2019’) which the Group uses as a
comparison to performance levels.
More information
To find out the latest about our business
go to www.rank.com
About us
Rank has been entertaining
Britain since 1937.
Today, we still love bringing
excitement to millions around
the world, with our gaming-
based entertainment brands.
And we believe that by doing it
responsibly, and playing our part
in the community, we can make
sure our venues and online sites
are filled with fun and laughter.
As we emerged from the
pandemic we focused on
refreshing our business to
help us deliver our purpose,
to excite and to entertain.
01
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Refreshing our strategy
and approach to ESG
“ It is important
to ensure our ESG
objectives relate
to and integrate
with our company
growth objectives.”
John O’Reilly
Chief Executive
Learn more about
our approach to ESG
on pages 54-71
02
The Rank Group PlcAnnual Report 2022
03
Above:
John O’Reilly,
Chief Executive
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Reinforcing our approach
to safer gambling is in our DNA
“ The Group looks
to challenge and
motivate all colleagues
to deliver in a manner
that is underpinned
by our commitment
to safer gambling.”
Katie McAlister
Non-Executive Director and Chair of the ESG & Safer Gambling Committee
Learn more about
our commitment
to safer gambling
on pages 56-57
04
The Rank Group PlcAnnual Report 2022
05
Above:
Grosvenor Casino
Sheffield
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview We are investing
in our venues
“ We are changing our
casinos, making them
more relevant and
appealing to a broader
audience through
upgrading our product
and F&B offer.”
Debbie Husband
Managing Director, Grosvenor Venues
Learn more about
our investments
in our Business
Performance review
on pages 17-22
06
The Rank Group PlcAnnual Report 2022
07
Above:
Grosvenor Glasgow
Merchant City
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Developing our digital
and cross-channel offer
“ We are excited by
the roadmap ahead,
as we look to bring
the venues and
digital experiences
closer together.”
Jon Martin
Managing Director, UK Digital
Learn more about
our strategy on
pages 40-51
08
The Rank Group PlcAnnual Report 2022
09
Above:
meccabingo.com
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 10
The Rank Group PlcAnnual Report 2022 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.
12 Chair’s letter
14 Our business
16 Chief Executive’s review
26 CFO’s review
28 Our external environment
32 How we create long-term value
40 Our strategy
52 Our key performance indicators
54 Our approach to ESG
72 Our business model
74 Risk management
82 Compliance statements
84 Alternative Performance Measures
11
Above:
Support Office, Maidenhead
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Chair’s letter
The Group has ended
the year with a strong
balance sheet, positive
trading momentum and
a leadership team
committed to delivering
sustainable value for
all its stakeholders.
Alex Thursby
Chair
Business updates
+14.2p
Earnings per share.
+98%
Underlying Group LFL
Net Gaming Revenue (‘NGR’)
up on prior year.
+4%
Underlying NGR for our UK digital
business driven by the performance of
our Grosvenor and Stride legacy brands.
12
The Rank Group PlcAnnual Report 2022 Dear Shareholders
It has been a year of recovery for the
Group, particularly for our venues
businesses. Clearly the pace of recovery in
the UK has been below expectations, but
the Board and I are confident that robust
plans are in place to drive the required
growth and improvements.
It has also been an important year for
our UK digital business. The Mecca brand
was successfully migrated onto the RIDE
proprietary platform in January 2022 and
the Grosvenor brand is due to migrate
in Q1 2022/23. Following Grosvenor’s
migration, all Group digital businesses
will be operating on owned technology
platforms providing greater agility and
sophistication in responding to customer
needs whilst delivering improved margins.
Great progress has been made in the
year in establishing a Group-wide ESG
and safer gambling strategy. A set of
performance measures have been agreed
which will evolve alongside our various
initiatives. The Group remains dedicated
to a safer gambling environment for
our customers.
The Group recognises the inflationary
pressures facing UK consumers but is
confident that the programme of planned
improvements alongside the reducing
impact of the pandemic will position
it well for future growth.
The Group has ended the year with a
strong balance sheet, positive trading
momentum and a refreshed leadership
team committed to delivering sustainable
value for all its stakeholders.
Regulation
Unfortunately, the UK Government’s
White Paper for gambling reform is yet to
be published. Having originally expected
its publication before the end of 2021,
multiple ministerial changes and more
recently the appointment of a new Prime
Minster have resulted in further delays
to its publication.
The Rank team continues to work hard
outlining modest proposals to modernise
the UK land-based casino and bingo
sectors and it’s still expected that the
Group will benefit from the review when
it concludes.
1. Year-on-year comparisons for our venues
are distorted by significant periods of closure,
curfews and regional restrictions in the 2020/21
financial year. The last comparable 12-month
period that was unaffected by the COVID-19
pandemic was the 12 months to 31 December
2019 (‘CY 2019’) which provides a helpful
comparison to performance levels.
13
Performance
Underlying Group LFL NGR was up 98%
on the prior year, with our venues back
open and our venues’ colleagues doing
what they do best, entertaining and
exciting our customers.
Our venues are still in post COVID-19
recovery, with underlying Group LFL NGR
down 10% compared to our pre-pandemic
performance1. We are confident that the
Group’s targeted capital programme can
drive growth in customer visits and,
alongside delivering operational
efficiencies, an improved performance.
Our UK digital business also recovered in
the year, with underlying Group LFL NGR
up 4%, driven by the performance of
Grosvenor and the Stride legacy brands
which operate on the proprietary RIDE
platform. The Board sees our digital
business as a key provider of future
growth for the Group.
Earnings per share (‘EPS’) was 14.2p,
up from a loss per earnings of 16.5p in the
prior year, due to our venues being back
open and contributing positively to the
Group. EPS before separately disclosed
items was 4.3p.
Dividend
As we started the new financial year on
1 July 2022, we saw the removal of the
bank-imposed restriction on not paying
our shareholders a dividend which was a
condition of our bank financial covenant
waiver put in place during the pandemic.
As the Group’s performance continues to
improve, we will reassess the Group’s
approach to paying dividends to our
shareholders. We expect to provide further
clarity around the resumption of paying
dividends at the time of the half year
results announcement in January.
Board changes
During the year, we continued to strengthen
our Board with the appointment of two
new members.
On 1 May 2022, we welcomed Richard
Harris to the Group as Chief Financial
Officer (‘CFO’) and to the Board following
the departure of Bill Floydd on
31 December 2021. Richard brings
extensive financial and operational
experience which will be invaluable as
Rank moves through the next phase of its
transformation plan. I would like to take
the opportunity on behalf of the Board to
thank Bill for his excellent contribution to
the Group as it navigated its way through
the pandemic and to Simon Hay who took
on the role of Interim CFO for the four
months prior to Richard joining.
On 23 June 2022, we were delighted to
announce that Lucinda Charles-Jones
joined the Board as a Non-Executive
Director. Lucinda’s background in
remuneration and people matters and
experience of operating in regulated
consumer-facing businesses will be a real
asset to the Board.
We also said farewell to two long-serving
Non-Executive Directors during the year.
On 31 January 2022, Susan Hooper
stepped down after serving over six years
on the Rank Board. Susan also successfully
chaired the ESG & Safer Gambling
committee for four and a half years and
was pivotal in ensuring ESG was considered
in its wider form without losing our clear
commitment to safer gambling. Katie
McAlister was appointed Chair of the ESG
& Safer Gambling Committee following
Susan’s departure.
On 19 January 2022, following his
acceptance to join the Board of Nueva
Codere, Chris Bell stepped down from the
Board after serving six and half years as
Senior Independent Director. Following
Chris’s departure, Karen Whitworth was
appointed Senior Independent Director.
Chris’s contribution to the Rank Board has
been invaluable and we wish both Susan
and Chris well for the future.
Thank you
The Group has emerged from the pandemic
with a renewed focus and energy. There lie
many opportunities ahead for the Group
and its future success will not be possible
without the unwavering passion and
resilience of the Rank team. On behalf of
the Board I would like to say thank to all
7,600 colleagues for the part you play in
delivering the Rank strategy.
Alex Thursby
Chair
17 August 2022
Learn more about
our response to
the Government’s
Gambling Review:
www.rank.com/en/
responsibility
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our business
A unique blend of
experiences, branded
venues and digital
channels in the UK
and Spain.
Our branded
venues and
digital
channels
64 Mecca branded venues
Mecca is Rank’s community-gaming
brand for the British market. A national
portfolio of 64 venues offering bingo,
slot machine games, great value food
and drink, and live entertainment.
52 Grosvenor branded venues
The UK’s largest multi-channel casino
operator with 52 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.
Mecca digital channels
The digital channels offer a range of
popular games like bingo, a wide range
of slot games and table games.
Grosvenor digital channels
The brand’s complementary digital
channels offer many popular games,
including its successful live casino,
in addition to a sports betting offer.
9 Enracha branded venues
Enracha is Rank’s community-gaming
business for the Spanish market. Nine
venues offering a range of popular
community games like bingo and poker
as well as electronic casino and slot
games, great value food and drink,
and live entertainment.
Enracha digital channels
Enracha also has a small complementary
digital offer.
64
14
52
9
The Rank Group PlcAnnual Report 2022 Our digital
only brands
The Group operates the market-leading
digital bingo brand, YoBingo, to the
Spanish market alongside its newer 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 licensed software
providing online bingo, casino and
slot gaming.
Our aim is to provide a seamless,
continuous and personalised customer
experience across any device or venue
they wish to visit.
In venues and
online –
extending the
customer
experience
Our markets
Split of LFL NGR – UK
Split of LFL NGR – Spain
Venues £430.6m
Digital £162.3m
Venues £30.1m
Digital £21.0m
15
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Chief Executive’s review
Our strong balance
sheet enables continued
investment in our
Transformation 2.0
programme which
positions the Group
well both for growth
and for the anticipated
regulatory reform to
land-based gaming.
John O’Reilly
Chief Executive
Business updates
+£40.4m
Underlying LFL operating profit of £40.4m
compares with a loss of £82.4m in the
prior year.
+275%
Grosvenor’s underlying LFL Net Gaming
Revenue (‘NGR’) was up 275% compared
to the prior year.
+15%
Increase in spend per visit at Mecca
venues on the core mainstage bingo game.
+£18.7m
Digital underlying LFL operating profit
of £18.7m up from £3.1m in the prior year.
16
The Rank Group PlcAnnual Report 2022 Strategic update
During the year, we took some time as
a Board and executive team to revisit
the Group’s purpose, ambition and
strategic aims.
Purpose
Our overarching purpose of delivering
exciting and entertaining experiences
remains unchanged. However, the Board
recognised that our purpose statement
must reflect our commitment to ensuring
that we meet the needs of all of our
stakeholders in a sustainable way.
Refreshed purpose statement:
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.
Ambition
Our stated Group ambition made reference
to becoming a £1bn revenue international
gaming business by 2023. The impact of
the COVID-19 pandemic on our venues
businesses has made this ambition
unachievable within the timescale.
Following the publication of the White
Paper on UK gambling reform we will have
a better understanding of our future
growth trajectory and will restate our
medium to long-term ambition.
Current trading and outlook
Overall, Group underlying NGR is running
3% ahead of the prior year in the first
seven weeks of 2022/23. Underlying
Digital NGR has grown 12% in the seven
weeks, with venues down 1%. Grosvenor
venues NGR is down 4% year-on-year but
with average weekly NGR in the seven
weeks 11% ahead of Q4, with the gradual
return of overseas customers to our
London casinos more than offsetting
the softer trading conditions outside of
London. Mecca is seeing visits up 8% and
NGR up 2%.
Trading conditions are likely to remain
challenging in the months ahead with
high inflation hitting consumer
discretionary expenditure and inflationary
cost pressures, particularly the further
rise in energy prices in recent weeks,
continuing to impact operating margins.
However, the successful migration to
proprietary technology within the digital
business and the investment into the
venues estate, will result in us being able
to compete strongly in the coming year.
Moreover, the strong balance sheet
enables continued investment in our
Transformation 2.0 programme which
positions the Group well both for growth
and for the anticipated regulatory reform
to land-based gaming following the
outcome of the UK Government’s review
of gambling regulation.
NGR
Grosvenor venues
Mecca venues
Enracha venues
Digital
Underlying LFL2
Impact of venues closures
and FX3
Underlying
Operating profit
Grosvenor venues
Mecca venues
Enracha venues
Digital2
Central costs
Underlying LFL2
Impact of venues closures
and FX3
Underlying
2021/22
£m
296.6
134.0
30.1
183.3
644.0
–
644.0
2021/22
£m
45.1
(0.8)
8.1
18.7
(30.7)
40.4
2020/21
£m
79.2
53.8
15.9
176.4
325.3
4.3
326.8
2020/21
£m
(40.7)
(17.5)
0.6
3.1
(27.9)
(82.4)
Change
275%
149%
89%
4%
98%
95%
Change
(211)%
(96)%
1,233%
499%
9%
(149)%
(0.6)
39.8
(2.1)
(84.5)
(147)%
CY 20191
£m
364.1
175.7
31.6
144.0
715.4
18.6
734.0
CY 2019
£m
75.4
33.0
7.5
22.9
(34.6)
104.2
0.5
104.7
Change
(19)%
(24)%
(5)%
27%
(10)%
(12)%
Change
(40)%
(102)%
8%
(18)%
(11)%
(61)%
(62)%
1. Year-on-year comparisons for our venues are distorted by significant periods of closure, curfews
and regional restrictions in the 2020/21 financial year. The last comparable 12-month period that was
unaffected by the COVID-19 pandemic was the 12 months to 31 December 2019 (‘CY 2019’) which the
Group uses as a comparison to performance levels.
2. Results are presented on a like-for-like (‘LFL’) basis which removes the impact of club closures, foreign
exchange movements and discontinued operations.
3. A full analysis of these adjustments can be found in the Alternative Performance Measures (‘APM’) section.
Business performance
Year-on-year comparisons for our venues
are distorted by significant periods of
closure, curfews and regional restrictions
in the 2020/21 financial year. The last
comparable 12-month period that was
unaffected by the COVID-19 pandemic
was the 12 months to 31 December 2019
(‘CY 2019’) which the Group uses as a
comparison to performance levels.
At a Group level, underlying LFL NGR
of £644.0m was up 98% against the prior
year. The largest growth was in Grosvenor
venues which were subject to the most
severe restrictions in 2020/21. In
comparison to CY 2019, underlying
LFL NGR was down 10%, reflecting the
operating restrictions which were in place
across the venues businesses in the first
half and slower than expected recovery in
our Grosvenor venues in the second half.
Underlying LFL operating profit of £40.4m
compares with a loss of £82.4m in the prior
year and a profit of £104.2m in CY 2019.
Despite the continued strong focus on
driving efficiencies across each of the
businesses, inflationary cost pressures
in the Grosvenor and Mecca UK venues
businesses negatively impacted operating
margins. The material increase has been in
energy which more than doubled to £22.4m
in UK venues. Based on current market
prices, energy costs for FY23 would be
approximately £46m. Prices for the first
quarter of the year are fixed and known but
there remains exposure to market volatility
beyond September. A number of initiatives,
including energy efficiency programmes,
are underway to mitigate some of the
impact of higher energy prices.
17
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Chief Executive’s review
Continued
Grosvenor venues
Grosvenor’s underlying LFL NGR was up
275% compared to the prior year, where
Grosvenor’s venues were either closed or
operating under curfew. Compared with
calendar year 2019, underlying LFL NGR
was down 19% reflecting the continued
impact from the pandemic, the slow return
of overseas customers to our London
casinos and the pressure on UK consumer
discretionary expenditure.
All of Grosvenor’s 52 venues were
operational throughout the period,
however much of the year was impacted
by COVID-19. In the first half of the year,
despite social distancing and the required
wearing of face masks, visitor numbers
and revenues gradually improved.
However, the emergence of the Omicron
variant and the Government’s consequent
Plan B measures saw NGR decline
significantly at the end of Q2 and into Q3.
Whilst all imposed COVID-19 restrictions
were removed in late January, visitor
volumes, particularly across the London
estate of nine venues which account for
over 38% of revenues in a normal trading
year, remained very weak until late June
when some improvement was seen.
Average weekly NGR of £6.1m in Q1
increased to £6.3m in Q2 as travel
restrictions eased and revenues increased
in our London casinos. In Q3 average
weekly NGR fell to £5.3m with the impact
of Omicron and very weak trading
conditions in London. In Q4 average
weekly NGR fell to just £5.1m, with the
volume of overseas players into London
only starting to pick up towards the end
of the year. Compared with calendar year
2019, London NGR was down 27% for the
full year, with the rest of the UK down 13%.
The strongest performing venues were
those in UK ‘staycation’ locations such as
Brighton, Blackpool and Bournemouth and
venues such as Bristol, Walsall, Sheffield,
London Victoria (‘The Vic’) and Nottingham
which have traded strongly, some on the
back of development investment.
The Grosvenor business continued to drive
strong cost efficiencies throughout the
year but with NGR falling 19% compared
with CY 2019 and energy costs increasing
significantly, the operating margin
declined from 20.7% to 15.2% delivering
an underlying LFL operating profit of
£45.1m (operating loss of £40.7m in the
prior year).
18
Key financial performance indicators
LFL2 NGR
London
Rest of the UK
Total NGR
Underlying LFL2 operating
profit/(loss)
Underlying3 operating
profit/(loss)
Total profit/(loss)
2021/22
£m
296.6
101.6
195.0
296.6
45.1
45.1
60.6
2020/21
£m
79.2
26.5
52.7
79.2
Change
275%
283%
270%
275%
CY 20191
364.1
138.7
225.4
Change
(19)%
(27)%
(13)%
(40.7)
(211)%
75.4
(40)%
(40.7)
(27.4)
(211)%
(321)%
1. Year-on-year comparisons for our venues are distorted by significant periods of closure, curfews
and regional restrictions in the 2020/21 financial year. The last comparable 12-month period that was
unaffected by the COVID-19 pandemic was the 12 months to 31 December 2019 (‘CY 2019’) which the
Group uses as a comparison to performance levels. Please refer to the Alternative Performance Measures
section to find out how CY 2019 has been calculated.
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.
3. Before the impact of separately disclosed items.
During the year, Grosvenor recognised
an impairment charge of £26.9m and an
impairment reversal of £13.3m relating to
a number of venues.
Despite a disappointing year from a
trading perspective, a number of key
initiatives have been successfully
delivered to accelerate the transformation
of the Grosvenor business as it recovers
from long periods of lockdown and other
restrictions through the pandemic.
£6.2m has been invested in new electronic
roulette terminals, gaming machines,
tables and wheels during the year. The
healthy table margin of 17.8% was the
result of continued investment in the latest
roulette wheels, tighter table management
controls and enhanced science being
applied to table opening plans.
£5.3m has been invested in property
development during 2021/22.
Refurbishments were completed at Bristol,
Blackpool, Walsall and Huddersfield to
modernise the venues, add enhanced
customer facilities including bars and
restaurants, improve non-gaming lounge
facilities and sports viewing areas, in
addition to making improvements to
gaming floors. An adult gaming centre
licence has been added to additional space
at the ground floor of the St Giles casino in
Tottenham Court Road in readiness for the
anticipated changes in casino regulations
emanating from the UK Government’s
current review of gambling legislation. An
additional casino licence has been added
to Grosvenor Nottingham providing an
additional 20 gaming machines.
Following extensive customer research, a
new concept venue has been developed at
the existing Merchant City site in Glasgow.
The casino which opened shortly after
the year end is more open and welcoming,
providing more intuitive journeys for new
customers. The venue presents a new
Grosvenor brand logo and visual
positioning to help underline the
entertainment and excitement of the
customer proposition. The venue has
a bar, sports viewing areas, restaurant
and gaming machine areas on the ground
floor with a modern and vibrant gaming
floor below. The new Glasgow Merchant
City Casino is another important step for
the Grosvenor brand in broadening the
appeal of casinos to a larger audience
of consumers.
A new customer safety model was trialled
and successfully rolled out across the
Grosvenor estate in November 2021.
The model provides teams with data points
on a daily basis which pinpoint customers
requiring further review to ensure they
are playing safely and within their means.
The hospitality sector has experienced
considerable labour market pressures
since reopening. Within the casino sector,
the particular pressure point has been
around licensed gaming personnel of
whom a large percentage were previously
nationals from mainland Europe. With this
provision of gaming colleagues having
dried up due to Brexit, the Grosvenor
business rolled out clearer career
pathways under a new employee value
proposition and established gaming
academies across the UK to support the
training of newly recruited colleagues and
those looking to transfer from food and
beverage and other positions into licensed
gaming roles. Over 440 colleagues
qualified as Grosvenor gaming colleagues
during the financial year.
The Rank Group PlcAnnual Report 2022 “ It’s so great to
talk to and meet our
customers in our
venues again.”
Debbie Johnston
General Manager, Grosvenor Glasgow
Merchant City
Above:
Grosvenor Glasgow Merchant City
19
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview
Chief Executive’s review
Continued
Mecca venues
The impact of the pandemic has been
severe on the bingo sector given the
importance of an older cohort of customers
to visitor numbers. Mecca’s LFL NGR
increased 149% on the prior year but was
down 24% on CY 2019 on visit volumes
down 32%.
Mecca witnessed a slow recovery from
the pandemic with the biggest shortfall
to pre-pandemic visitor numbers being
amongst older customer segments.
Compared with CY 2019, visitor volumes
were down 32% in H1 at 2,548k. H2
performance was affected by Omicron
case numbers across the UK which further
impacted the willingness of older
consumers to attend indoor hospitality.
Nevertheless, visitor volumes improved
to 2,687k in H2, down 33% on CY 2019.
Mecca has competed hard for customer’s
leisure time by cutting prices across a
range of bingo sessions and guaranteeing
strong prizeboards. Nevertheless, spend
per visit on the core mainstage bingo
game increased 15% on 2019 as customers
utilised the increased value to buy more
tickets in the game. Across the board
spend per visit grew 13% on 2019 with
gaming machine spend growing by 33%
and food and beverage by 27%. Spend per
visit on interval games declined 13% as
expenditure transferred into the mainstage
bingo game.
Enracha venues
The Enracha venues business in Spain
recovered strongly in 2021/22 despite
having COVID-19 restrictions on opening
hours and on capacity levels until well into
H2. Underlying LFL NGR of £30.1m was up
89% against the prior year and down just
5% against pre-pandemic CY 2019.
Impacted by the pandemic, operating
restrictions and lowered consumer
confidence about indoor hospitality, the
volume of visits to Enracha was down 33%
against CY 2019. However, this was largely
offset by a 29% growth in the spend per
visit. This growth in customer expenditure
has largely been driven by 6% growth in
gaming machine NGR despite visitor
numbers being down by a third. The
investment made to the machine offering
across the Enracha estate prior to the
pandemic has delivered strong returns
and this has been further enhanced by
the gradual rollout of a new machine
management system which is providing
enhanced metrics and insights into
customer play.
20
Key financial performance indicators
LFL2 NGR
Total NGR
Underlying LFL2 operating
profit/(loss)
Underlying3 operating
profit/(loss)
Total profit/(loss)
2021/22
£m
134.0
134.0
2020/21
£m
53.8
55.5
Change
149%
141%
CY 20191
175.7
Change
(24)%
(0.8)
(17.5)
(95)%
33.0
(102)%
(0.8)
33.6
(18.9)
(22.7)
(96)%
(248)%
1. Year-on-year comparisons for our venues are distorted by significant periods of closure, curfews
and regional restrictions in the 2020/21 financial year. The last comparable 12-month period that was
unaffected by the COVID-19 pandemic was the 12 months to 31 December 2019 (‘CY 2019’) which the
Group uses as a comparison to performance levels.
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.
3. Before the impact of separately disclosed items.
The underlying LFL operating loss of
£0.8m, reflecting both the fall in NGR and
the £8.1m increase in energy costs in the
year, compares with a £17.5m operating
loss in the prior year and a £33.0m
underlying LFL operating profit in
CY 2019.
Seven loss making venues at lease end
have closed in Q1 2022/23.
During the year, Mecca recognised an
impairment charge of £20.9m relating
to a number of venues.
Mecca Luton reopened in March 2022
following a full redesign and refurbishment.
This new Mecca concept venue provides
for a wide range of entertainment
experiences with bingo at the core. It is
early days for Mecca Luton after a prolonged
closure, but the customer reaction to the
venue and the experience is very positive
and we expect customer volumes and
revenues to continue to build.
Bingo venues continue to provide an
important social amenity and, with the
emergence from the pandemic, a
strengthened Mecca team has a clear
focus on accelerating the rate of year-on-
year growth, returning their venues to
profitability in 2022/23.
Key financial performance indicators
LFL2 NGR
Total NGR
Underlying LFL2 operating
profit/(loss)
Underlying3 operating
profit/(loss)
Total profit/(loss)
2021/22
£m
30.1
30.1
2020/21
£m
15.9
17.5
Change
89%
72%
CY 20191
31.6
Change
(5)%
8.1
7.5
15.1
0.6
1,250%
7.5
8%
(0.2) (3,850)%
(0.8) (1,988)%
1. Year-on-year comparisons for our venues are distorted by significant periods of closure, curfews
and regional restrictions in the 2020/21 financial year. The last comparable 12-month period that was
unaffected by the COVID-19 pandemic was the 12 months to 31 December 2019 (‘CY 2019’) which provides
a helpful comparison to performance levels.
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
3. Before the impact of separately disclosed items.
The nine Enracha venues delivered an
underlying LFL operating profit of £8.1m,
an increase of 8% on CY 2019.
During the year, Enracha recognised an
impairment reversal of £8.8m regarding
a number of its venues.
The Rank Group PlcAnnual Report 2022 “ Our bingo venues
continue to provide
an important social
amenity.”
Andy Crump
Managing Director, Mecca Venues
Above:
Mecca Luton
21
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Chief Executive’s review
Continued
Digital
The digital business performed strongly
in the year, delivering underlying LFL NGR
growth of 4% and increasing underlying
LFL operating profit of £18.7m up from
£3.1m in the prior year.
Within the UK-facing brands, Mecca NGR
declined 3% year-on-year whilst Grosvenor
grew 7% and the Stride legacy brands
grew 11%. The Stride legacy brands on
the RIDE proprietary technology platform
grew 31%, whilst those operating on
third-party platforms fell 14% as other
operators caught up with the affordability
processes and restrictions introduced
across Rank’s digital businesses in 2020.
Yo and Enracha grew NGR by 4% despite
marketing investment being down 51%
against the prior year following the
advertising and other restrictions
introduced by the Spanish Government in
May 2021. Unique active players were down
19% as the volume of first time depositors
halved, but the revenue per customer grew
27% as retention rates improved and the
value of new customers increased.
Mecca was successfully migrated to the
RIDE proprietary technology platform
in January 2022. The Grosvenor online
business will be migrated in September
2022, completing the successful
integration of the Stride acquisition
and freeing up significant development
capability for new products, improved user
journeys and enhanced omni-channel
customer experiences within the
technology roadmap.
Key financial performance indicators
LFL1 NGR
Mecca
Grosvenor
Enracha/Yo
Other including Stride legacy brands
Total NGR
Mecca
Grosvenor
Enracha/Yo
Other including Stride legacy brands
Underlying LFL1 operating profit/(loss)
Underlying2 operating profit/(loss)
Total profit/(loss)
2021/22
£m
183.3
66.9
49.8
21.0
45.6
183.3
66.9
49.8
21.0
45.6
18.7
18.7
4.2
2020/21
£m
176.4
68.7
46.5
20.1
41.1
177.4
68.7
46.5
21.1
41.1
3.1
3.2
(11.3)
Change
4%
(3)%
7%
4%
11%
3%
(3)%
7%
0%
11%
503%
484%
(137)%
1. Results are presented on a like-for-like (‘LFL’) basis which removes the impact of club closures and foreign
exchange.
2. Before the impact of separately disclosed items.
Within the international digital business,
Enracha online was successfully migrated
onto the Yo proprietary technology
platform and in Q4 we launched Enracha
Sports. A new Yo Sports service is in
development for launch in H1.
Passion Gaming, the online Indian rummy
business in which Rank holds a 51% share,
saw NGR grow 18% in the year as legal
restrictions in Tamil Nadu and Kerala
were eased.
During the year, further improvements
were made to the UK digital operating
model with a strengthening of the
software engineering hub in Cape Town,
additional growth in the Mauritius
operations teams and several key
appointments across technology,
marketing and commercial functions.
Cost synergies from the Stride acquisition
totalled £10.2m in 2021/22 with a further
£4.5m expected to be delivered following
completion of the Grosvenor migration.
The business continues to develop and roll
out additional safety mechanisms to help
protect customers by ensuring they are
playing within their means. Affordability
journeys continue to be improved to
reduce unnecessary friction for customers.
A new markers of harm model has been
introduced which enhances real time
identification of potentially at-risk play,
triggering an appropriate interaction with
the customer.
22
The Rank Group PlcAnnual Report 2022 “ Last year was
transformational
for the UK digital
business.”
Jon Martin
Managing Director, UK Digital
23
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Chief Executive’s review
Continued
Strategic pillars
The Board reviewed Rank’s six strategic
pillars and concluded that the key focus
areas of driving our digital business and
evolving our venues is still very much the
priority. Our focus on developing our
cross-channel offering has now
progressed into how we can better provide
a seamless cross-channel service to our
customers which better meets their needs.
It was also concluded that our fourth pillar,
which highlighted the need to innovate,
is now rooted in all our channel initiatives
and therefore should not be a separate
distinct pillar.
We wanted to ensure we have a fully
embedded sustainable strategy and that
what may be classed as ESG aims were not
dealt with separately. As a result, our final
two strategic pillars now fully embed our
sustainability focus areas of customers,
colleagues, communities and the
environment.
Refreshed strategic pillars:
1. Provide a seamless and tailored
experience for customers across venues
and online
2. Drive digital growth powered by our
proprietary technology and live play
credentials
3. Continuously evolve our venues estate
with engaging propositions that appeal
to both existing and new customers
4. Be passionate about the development
and wellbeing of our colleagues and
the contribution we make to our
communities
5. Build sustainable relationships with our
customers by providing them with safe
environments in which to play
For details of our strategic initiatives
in the year please refer to Our Strategy
section on page 40.
Sustainability
In January 2022, we issued our first-ever
Responsible Business Report which
outlined our ESG commitments.
We have continued to build on the good
foundations set out in the January report
and are pleased to report for the first time
on our achievements within our corporate
strategy. We have identified key
performance indicators against each area
of focus to enable us to report more
broadly on our social and environmental
impacts alongside our financial reporting
calendar.
A comprehensive 2022 Responsible
Business Report will be published in
September and will be available to view
and download from our corporate website,
www.rank.com.
Regulatory update
We continue to await the publication of the
Government’s White Paper for gambling
reform. Originally scheduled to be
published before the end of calendar year
2021, ministerial changes in late 2021
contributed to a series of delays
throughout the first half of 2022, which
culminated in June with another key
ministerial change in the Department for
Digital, Culture, Media and Sport (‘DCMS’)
and the Government-wide suspension of
any new legislation or policy, prior to the
appointment of a new Prime Minister.
Our understanding is that the publication
of a White Paper is likely to be followed by
a series of Gambling Commission
consultations relating to specific policy
recommendations. The timeline for these
consultations is unconfirmed but likely
to begin soon after the White Paper
is published.
Over the course of the past year, we have
worked hard to articulate our modest
policy proposals with key parliamentary
stakeholders, principally in terms of
land-based reforms for casinos and bingo
clubs, but also for sensible digital policy
decisions.
“ Our overarching
purpose of
delivering exciting
and entertaining
experiences
remains.”
John O’Reilly
Chief Executive
Below:
John O’Reilly, Katie McAlister
and Alex Thursby
24
The Rank Group PlcAnnual Report 2022 Above:
Richard Harris
In terms of our casinos, we proposed
a sliding scale (based on size of venue)
for increased numbers of slot machines
across UK casinos which would enable all
venues to better cater to customer demand
whilst preserving the character of a UK
casino. We remain hopeful of deregulation
in terms of slot machine numbers and
believe that the sliding scale model is
the most effective solution to ensure
consistent and even-handed reform in line
with the Government’s original objectives.
We have also proposed the availability of
Random Number Generator based product
on terminals in our clubs, along with the
provision of sports betting which would
help to ensure UK casinos start to catch up
with what is widely available throughout
the world. A solution to the issue of
providing credit for High Net Worth
individuals is important, particularly in
our London casinos, and we have argued
that any solution in this space must apply
equally to all venues which compete for
overseas customers.
Our proposals for land-based bingo reforms
have been similarly modest. The existing
‘80:20’ rule, which requires 80% of our
machine mix in clubs to be increasingly
obsolete Cat C or Cat D machines in order
to provide the 20% balance of more
popular B3 machines, is archaic. We have
proposed the rule be removed and that the
ability to offer side-bets on the main stage
game of bingo be permitted. We continue
to work with DCMS and to seek further
engagement from the UK Gambling
Commission in order to ensure that these
modest reforms are fully understood and
can be implemented.
Our UK digital business will likely
be impacted by changes to the digital
elements of the White Paper
recommendations. We have argued
against the imposition of a statutory levy
and against the blanket banning of free
bets, both of which would curtail our
competitive abilities. We hope that any
changes to affordability thresholds and
online slot limits will provide a line in the
sand which sensibly allows customers and
operators to adjust to changes and deliver
a safer gambling consistent experience
without further regulatory creep.
Management changes
During the year we made a number of
key appointments to the executive team.
On 1 May 2022, Richard Harris joined
the Group as Chief Financial Officer
(‘CFO’). Richard joined us from London
estate agents Foxtons Plc where he had
been CFO for three years. Prior to joining
Foxtons, Richard was Group Financial
Controller for Laird plc.
On 2 May 2022, Enric Monton Montero
joined us as Managing Director of Rank
International, our Spanish venues and
digital business. Enric has over 20 years
of experience in the Spanish land-based
and digital betting and gaming sector,
most recently as Managing Director
of Cirsa’s Latin America business.
Debbie Husband was appointed Managing
Director of the Grosvenor venues business
on 3 May 2022. Debbie was previously
National Operations Director for Grosvenor
having joined the Group from Travelodge
in September 2017.
Andy Crump joined the Group as Mecca
Managing Director on 3 May 2022. Andy
joined us from Marks and Spencer where
he was Head of Hospitality Operations
with P&L responsibility for over 400 cafes,
bakeries and deli counters. Prior to Marks
and Spencer, Andy spent 14 years in senior
operational roles with Punch Taverns.
Emma Morning, who joined the
transformation programme office in 2019
having previously worked with KPMG in
the UK and Australia in various consulting
roles, was promoted to the executive team
during the year as Transformation and
Strategy Director.
On 12 September 2022, Hazel Boyle will
join the Group as Chief People Officer.
Hazel joins us from Future plc, where she
was most recently their Chief People
Officer. Hazel brings a wealth of corporate
experience and extensive knowledge of
managing change and transformation
across large groups, with a strong focus
on talent management and development.
The new members of the executive team
bring renewed energy to the transformation
of the Group.
John O’Reilly
Chief Executive Officer
17 August 2022
For more information
on Richard Harris’
appointment, see
page 103
25
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview CFO’s review
For the 12 months
ended 30 June 2022
NGR increased by 95%
to £644.0m due to the
impact of COVID-19
enforced venue closures
and operating restrictions
in the prior year.
Richard Harris
Chief Financial Officer
Business updates
+£82.1m
Increase in operating profit with our
venues back open, from an operating
loss of £92.9m in the prior year.
+14.2p
Increase in basic EPS from (16.5)p
in the prior year.
26
The Rank Group PlcAnnual Report 2022 Within this section all prior year
comparatives are to the year ended
30 June 2021.
Reported net gaming revenue
(‘NGR’)
For the 12 months ended 30 June 2022
NGR increased by 95% to £644.0m due
to the impact of COVID-19 enforced venue
closures and operating restrictions in the
prior year.
Operating profit
With our venues back open, operating
profit grew to £82.1m, from an operating
loss of £92.9m in the prior year.
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 2022
were £46.2m.
The key SDIs in the year were as follows:
– Net VAT receipt of £77.1m (net of costs)
plus the associated interest of £5.6m
concerning a long-standing VAT claim
regarding gaming machines during the
period April 2006 and January 2013;
– Impairment charge of £47.8m relating
to a number of Grosvenor and Mecca
venues;
– An impairment reversal of £22.0m
regarding a number of Grosvenor and
Enracha venues following an improved
current result and forecasted outlook;
– £10.4m release of a property provision
created during the COVID-19 pandemic
recognised to cover the Group
becoming liable to make potential
payments under a property arrangement
if tenants defaulted;
– Amortisation costs of £11.7m relating to
the acquired intangible assets of Stride
and Yo brands;
– Closure costs of £4.7m regarding the
closure of a number of Mecca venues; and
– Profit on disposal of £8.8m relating to
additional proceeds from the disposal
of the Belgium casino.
Further details regarding the SDIs can be
found in note 4 of the financial statements.
Cash flow and net debt
As at 30 June 2022, net debt was £162.6m. Debt comprised £78.8m in term loans and
£181.7m in finance leases, offset by cash at bank of £97.9m. In the period, the Group
repaid £29.6m of the term loan in line with the loan’s agreed amortisation schedule.
The Group finished the prior year with net debt for covenant purposes of £65.5m.
Following the receipt of the VAT repayment in December 2021 and the Group’s venues
back open generating cash we finished the year with net cash for covenant purposes
of £6.7m.
Operating profit from continuing operations
Operating profit from discontinued operations
Depreciation and amortisation
Working capital
Other
Cash inflow/(outflow) from operations
Capital expenditure
Net interest and tax
Lease principal payments
Cashflows in relation to SDIs
Net free cash flow
Share capital issued
Business acquisition and other
Business disposal
Total cash inflow
Opening net cash/(debt) pre IFRS 16
Closing net cash/(debt) pre IFRS 16
IFRS 16 lease liabilities
Closing net (debt) post IFRS 16
2021/22
£m
39.8
–
67.4
(6.2)
(0.3)
100.7
(40.6)
(16.2)
(53.7)
70.6
60.8
–
(0.7)
8.8
68.9
(49.8)
19.1
(181.7)
(162.6)
2020/21
£m
(84.5)
1.5
71.2
(9.2)
(0.2)
(21.2)
(22.2)
(16.3)
(31.8)
(5.9)
(85.6)
68.1
(0.5)
25.2
7.2
(57.0)
(49.8)
(206.9)
(256.7)
Taxation
The Group’s underlying effective
corporation tax rate in 2021/22 was 23.5%
(2020/21: 15.6%) based on a tax charge of
£6.2m (excluding impact of rate changes
on deferred tax) on underlying profit
before taxation. This is higher than the
Group’s anticipated effective tax rate of
17-19% for the year mainly as a result of
lower than forecasted profits in overseas
jurisdictions taxed at lower rates than
the UK.
The underlying effective corporation tax
rate for 2022/23 is expected to be 16-18%,
being below the UK statutory tax rate. The
tax rate is driven by some overseas profits
being taxed at lower rates than the UK
and Maltese tax credits associated with
dividend payments to be received in
2022/23.
Earnings per share (‘EPS’)
Basic EPS grew to 14.2p from (16.5)p in the
prior year. Underlying EPS grew to 4.3p
from (20.1)p in the prior year. For further
details refer to note 10 of the financial
statements.
Cash tax rate
In the year ended 30 June 2022, the Group
had an effective cash tax rate of 13.3% on
total profit before taxation (2020/21: (1.3)%).
The cash tax rate is lower than the
effective tax rate due to the utilisation of
losses arising in 2020/21 to offset profits
in 2021/22 resulting in a reduction in cash
tax due.
The Group is expected to have a cash
tax rate of approximately 1-3% in the year
ended 30 June 2023. This is lower than
the effective tax rate because of utilisation
of brought forward tax losses and Maltese
tax credits expected to be received in
2022/23.
Net financing charge
The £13.4m underlying net financing
charge for the year ended 30 June 2022
was in line with the prior year’s charge.
The underlying net financing charge
includes £6.7m of lease interest calculated
under IFRS 16.
On a statutory basis, the Group had an
effective tax rate of 22.7% (2020/21: 9.7%)
based on a tax charge of £16.9m and total
profit of £74.3m. This is higher than the
effected tax rate on underlying profit
because of certain separately disclosed
items which do not result in a tax credit.
Further details of the tax charge are
provided in note 6 of the financial
statements.
Richard Harris
Chief Financial Officer
17 August 2022
27
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our external environment
Through understanding
the markets in which we
operate, and our customers’
needs and expectations,
we can continually drive
improvements to our
customer experience in
a way that delivers value
to all our stakeholders.
Working across
disciplines and
geographies to improve
the customer experience
28
Above:
Sarah Powell and Katie McAlister
The Rank Group PlcAnnual Report 2022 Meeting the changing
needs of our customers
Customer insights
Our purpose is in part driven by meeting
the changing needs and expectations
of our customers.
Through customer insights we can
understand how and what we need to
do to deliver exciting and entertaining
experiences.
Mecca venues
Mecca is our highly-trusted and
community-focused land-based brand
known for the friendliness of our
colleagues and opportunities to win big.
– Bingo has relevance and appeal to
approximately 30% of the population
but needs to evolve to meet their
changing needs.
– Overall, the bingo market continues
to consolidate.
– There is a desire for new experiences
that are engaging, safe and value
for money.
– There is a desire for more accessible,
modern and lively bingo venues
complemented by an enjoyable food
and beverage offer.
– Post the COVID-19 pandemic the
returned younger players are playing
more often but the older players are
playing less.
– Average Mecca customer age is 44
years; however, the most frequent
customers are females between 60
and 70 years old.
Customer analysis
Female
73%
New
15%
Electronic Bingo (Max Bingo)
39%
<35 years
39%
Recreational
Male
27%
Existing
85%
Paper Bingo
61%
>35 years
61%
Higher frequency
88%
Cross-channel customer
12%
Venues only customer
24%
76%
Grosvenor venues
– Approximately 8% of the UK population
visit casinos at least once a year, though
an additional 12% would consider
visiting a casino if the offer was different
to what they perceive a casino to be.
– There is a desire for fun, enjoyable,
friendly and welcoming experiences
in a safe and secure environment.
29
– There is a need for more modern and
innovative experiences without losing
the thrill and excitement of playing
in a casino.
– Average Grosvenor customer age is
39 years; however, the customers that
visit the most and have higher levels
of spend are over 56 years old.
– Male to female split for Grosvenor’s
customers is 4:1.
Customer analysis
Female
27%
New
Male
73%
Existing
65%
Occasional and casual
35%
Core and higher spending
89%
<35 years
11%
>35 years
66%
Cross-channel customer
34%
Venues only customer
5%
95%
Enracha venues
Enracha is our Spanish land-based
venues brand providing a predominantly
bingo-based gaming experience.
– During 2019, before the COVID-19
pandemic, 2.4m people visited a bingo
venue in Spain. This number decreased
to 1.4m during 2020. Venues bingo in
Spain has relevance and appeal to
approximately 6% of the Spanish
adult population.
– Following recent regulatory restrictions
where the size of available prizes has
been reduced, customers now value
more the great customer service and
seamless customer journeys.
– There is a need for state-of-the-art
electronic gaming areas which are
comfortable and modern, complemented
by additional games such as customised
jackpots and loyalty card functionality.
– Enracha’s biggest customer group is the
26 to 35 years category, representing
over 23% of total customers, but
generating only 12% of total visits.
Whereas customers over 65 years
represent 14% of the customer base,
but generate 29% of our visits.
– The most loyal and frequent Enracha
customers are females over 65 years,
who generate 19% of our total visits,
with an average of 1.5 visits per month.
– Male to female split for Enracha’s
customers is 1:1.
UK Digital bingo
– 2% of the UK population play online
bingo each month; the growth
opportunity that exists within this
segment remains significant.
– Customers are looking for their
experience to be safe and secure, where
it is easy to receive winnings, where
they have fun and more chances to win.
– The experience needs to be intuitive and
easy for customers to use. This includes
having a reliable app which provides
great, simple user experiences.
– There is a growing demand from
customers for variety, whether that be the
promotions that cater for a wider range
of budgets, or the games and features
available. Customers are wanting more
interactive and free-to-play mechanics
that allow their money to go further.
– Customers expect safer gambling to be
embedded across their experience with
the provision of safer gambling tools
available upfront in their customer
journeys.
– The average online bingo player age
is 39 years, slightly older than that for
Mecca at 38 years.
UK Digital casino
– 4% of the UK population play online
casino each month, with opportunities
for growth specifically around slots
and poker.
– There is a desire for great looking sites
which offer the best in new games along
with strong promotions.
– Providing exciting and entertaining
experiences and being a brand that
listens to customer feedback and meets
their needs is important to players, as
is the need to reward loyalty and offer
opportunities to win big.
– Customers have a preference for sites
that provide tools to help them control
their spend and where there is swift and
seamless payment of winnings.
– The average online casino player age
is 37 years, younger than that for
Grosvenor at 41 years.
What this means for Rank
Rank is focused on the continuous
development of new games and formats to
further excite and entertain its customers.
Refer to pages 44 to 47 for further details
of how we are our building digital
capability and scale and evolving our
venues proposition.
Cross-channel
– With its 125 venues, Rank is 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.
– With only 12% of our UK venues
customers playing with us both in
venue and online there is significant
opportunity for the Group to grow its
cross-channel customer base.
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our external environment
Continued
Improving the customer
experience in 2022
“ Only 4% of the
population visit a casino
– we need to make our
venues the go-to place
for everyone who wants
to be entertained.”
“ There is a need for more
modern and innovative
experiences without
losing the thrill and
excitement of playing
in a casino.”
“ Responsible
gaming sits at
the heart of our
customer offer.”
“ Bingo has
relevance and
appeal to c.30%
of the population
but needs to evolve
to meet their
changing needs.”
30
Above:
Grosvenor Glasgow Merchant City
The Rank Group PlcAnnual Report 2022 In Spain, the Government passed a Royal
Decree that imposed restrictions on online
gaming related to advertising and
responsible gambling, the key provisions
of which came into force on 1 May 2021.
This followed on from initial measures
introduced earlier in 2020 to restrict
online gaming advertising in light of the
COVID-19 pandemic. In addition, we expect
a further Royal Decree on safer gambling
to be published in the next few months.
In July 2021 a new Act was passed on
measures to prevent and fight tax fraud,
which limits cash payments in Spanish
venues.
What this means for Rank
Regarding its UK land-based operations,
Rank is seeking harmonisation of the 1968
Act and the 2005 Act relating to casinos,
specifically the ability to provide a more
appropriate level of gaming machines
across its 51 casinos licensed by the
1968 Act.
For our UK bingo venues business,
Rank is seeking removal of the restriction
surrounding the number of Category B3
machines permitted in each bingo venue
along with certain other constraints which
should result in product innovation and
therefore a better experience for our
Mecca customers.
For our UK-facing digital business, the
political debate continues around player
protection checks and we remain engaged
and informed on developments through
our own efforts and via the industry
trade association.
Rank considers its regulators as a key
stakeholder with whom engagement
continues to be important (please see
page 38 for more information about how
we engage with them). We will continue to
engage and evolve our approach to player
protection and consumer fairness.
Operating in highly
regulated geographies
Working closely
with regulators
Great Britain
Rank operates venues under its Mecca
and Grosvenor Casinos brands across
Great Britain.
The venues bingo and casino markets are
well established and are highly regulated.
Unlike Mecca, there are a limited number
of casino licences in Great Britain which
are allocated to certain permitted areas.
Rank operated licences
Rank dormant licences
Total licences
Rank operated venues
Casino
71
7
78
521
Bingo
63
n/a
63
63
1. Excludes casino licence operated from Mecca
Oldbury.
Rank operates its UK customer-facing
digital business through Gibraltar,
Alderney and UK online gaming licences.
Spain
Rank operates venues under its Enracha
brand across Spain through Spanish
gaming licences.
Like Great Britain, the Spanish venues
market is a regulated and mature market.
Rank’s Yo and Enracha digital brands
are operated through Spanish online
gaming licences.
India
Through a joint venture, Rank operates
Passion Gaming, an online rummy
business in India.
What this means for Rank
Our bingo and casino venues in England,
Scotland and Wales accounted for more
than 74% of Group revenue pre-COVID-19.
In addition, the majority of Rank’s digital
customers are based in Britain.
Pre-pandemic, our core market has
provided a relatively stable environment
for gaming and betting by comparison
with many other jurisdictions around
the world.
We work closely with our regulators to
uphold and drive forward the standards
expected of our industry in an ever-
evolving regulatory landscape and
enforcement-led regulator approach. We
are committed to operating in compliance
with all relevant legislation, regulations
and licensing requirements.
The UK Government launched its planned
review of gambling legislation in
December 2020. The review focuses
heavily on online regulation but also
recognises the need to ensure that the
regulation of land-based gambling is
appropriate for today’s consumer and
equitable, relative to online regulations.
It is critical for the future of the industry
that the right balance, evidence and
proportionality is applied during this
review. In its Call for Evidence, to which
we responded, the Government
highlighted that problem gambling has
been stable in the UK for many years.
However, as an industry we must ensure
that we continue to do all we can to protect
vulnerable customers whilst also ensuring
we provide the best experience to the vast
majority of customers who never
experience any harm. The Government’s
White Paper on gambling reform is
anticipated in the next few months.
In the last 12 months, the UK Gambling
Commission (‘Commission’) has published
its consultation responses on three areas:
Remote Customer Interaction, Regulatory
Panel Reform, and Licensing, Compliance
and Enforcement Policy. In particular,
under its conclusion to the customer
interaction consultation, the Commission
moved to implement minimum player
protection standards that will be
considered by the Government as part
of the ongoing review referenced above.
It also determined that new requirements
to ensure that online gambling businesses
do more to identify and take a more
tailored approach to customer interactions
to further protect customers at risk of
harm published as guidance in June 2022
must be implemented in September 2022.
During the year, we were also required
to implement new remote technical
standards requirements that came into
force in October 2021 in relation to display
of transactions, auto-play functionality,
time requirements and reality checks
and responsible product design.
31
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview How we create long-term value
Relevant disclosure
Company purpose (see inside cover and pages 17 and 98)
Our business model (pages 72 to 73)
Our strategy (pages 40 to 51)
Engagement with regulators and legislators (page 38)
Colleagues (pages 59 to 61)
Inclusion and diversity (page 61)
Employee engagement (page 36)
Non-financial reporting (page 83)
Customer engagement (page 35)
Supplier engagement (page 39)
Engagement with regulators and legislators (page 38)
Responsible payment practices (page 39)
Anti-bribery and corruption (page 59)
Modern slavery (page 39)
Community engagement (page 37)
Establishing the ESG & Safer Gambling Committee (page 56)
TCFD disclosures (page 70)
Rank Cares (page 71)
Brands (pages 14 and 15)
Culture and values (pages 60 and 73)
Engagement with regulators and legislators (page 38)
Whistleblowing (page 59)
Internal financial controls (page 108)
Shareholder engagement (page 39)
Annual General Meeting (page 89)
Rights attached to shares (page 145)
Voting rights (page 145)
Examples of how principal decisions in
2021/22 took into account stakeholder
interests can be found on pages 33 and 34.
Other examples of Board engagement can
be found within the ‘Stakeholder
engagement’ section on pages 35 to 39.
The Board performed its duties by,
amongst other things, discussing the
following matters:
– a full review of the Group’s strategy,
purpose and values, particularly in light
of the impact of the pandemic on the
business and its continued recovery.
Please see pages 40 to 51 for more
information.
– continued development of Rank’s ESG
strategy following findings from the
materiality assessment conducted during
2020/21. Please see pages 54 to 71 for
more information.
– capital expenditure and investment
opportunities. Please see pages 34 and
99 for more information.
– updates to the Group’s corporate risk
register and principal risks. Please see
pages 74 to 81 for more information.
– the impact of increasing energy prices
and inflationary pressures. Please see
page 17 for more information.
– regulatory change impacting the Group,
implemented during the year and
anticipated in the forthcoming year.
Please see pages 16 to 25 for more
information.
Section 172 statement
S172 factor
The likely consequences of any decision
in the long term
The interests of the Company’s employees
The need to foster the Company’s
relationships with suppliers, customers
and others
The impact of the Company’s operations
on the community and the environment
The desirability of the Company
maintaining a reputation for high
standards of business conduct
The need to act fairly between members
of the Company
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 Group’s
continued recovery from the pandemic and
review of its strategy, as well as the impact
of increasing inflationary pressures in the
latter half of the year. In taking such
decisions it carefully considered
stakeholders, and the information it
received through 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 Act 2006.
This was particularly relevant in relation
to its discussions and decision-making
on (i) its revised purpose and the refresh
of the Group’s strategic pillars with a view
to ensuring sustainable growth,
(ii) development of the Group’s ESG
framework and strategy, and (iii) capital
investments, each as described on
pages 98 to 99.
32
The Rank Group PlcAnnual Report 2022 Above:
Jonathan Plumb, Karen Whitworth
and Richard Harris
33
Above:
John O’Reilly, Jon Martin
and Alex Thursby
Principal decisionRefreshed purpose and strategy ContextDuring the year, the Board revisited and discussed with management the Group’s purpose, ambition and strategic aims to determine whether these continued to be fit for purpose as the Company recovers from the pandemic and embeds sustainability.Decision-making processThe Board reviewed Rank’s strategic pillars. It discussed Rank’s position within the gambling industry and the wider leisure industry and considered market trends and competitor analysis. It also reflected on economic conditions and the outlook as Rank recovers from the impact of the pandemic. The Board wanted to ensure that Rank has a fully embedded sustainability strategy and also considered the impact of the UK Government’s Gambling Act 2005 review.The Board discussed revised five-year plans presented by each area of the business. It determined that the key focus areas of driving our digital business and evolving our venues is still very much the priority. It concluded that the business’ focus on developing our cross-channel offering has now developed into how we can better provide a seamless cross channel service to our customers which better meets their needs. Key stakeholder considerationsCustomers – player protection, customer experience and relevance of offeringOur people – opportunities for progression, inclusion & diversity, opportunities to share ideas and make a difference and wellbeingCommunities – positive community impact and employmentRegulators and legislators – openness and transparency, safer gambling, policy and gambling regulatory changeShareholders & Investors – strategy, performance and outlook, corporate governance and ESG Suppliers – robust business, long-term partnerships and a collaborative approachKey ESG considerationsEnsuring that the strategic pillars fully embed our sustainability focus areas of customers, colleagues, communities and the environment.Actions and outcomesThe Board approved: –A refreshed purpose statement – to deliver exciting and entertaining experiences in a safe, sustainable and rewarding environment. –Refreshed strategic pillars: 1. Provide a seamless and tailored experience for customers across venues and online 2. Drive digital growth powered by our proprietary technology and live play credentials 3. Continuously evolve our venues estate with engaging propositions that appeal to both existing and new customers 4. Be passionate about the development and wellbeing of our colleagues and the contribution we make to our communities 5. Build sustainable relationships with our customers by providing them with safe environments in which to playImpact of these actions on the long-term success of the CompanyA strong purpose and clear strategic pillars that resonate with all stakeholders creates a combined vision, positioning the Company to create long-term value and sustainable growth. The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview How we create long-term value
Continued
Above:
Grosvenor Glasgow Merchant City
Above:
Grosvenor Glasgow Merchant City
34
Principal decisionGrosvenor, Glasgow Merchant City redevelopment ContextThe Board commenced the 2021/22 financial year focused on initiatives to drive growth including by way of venue redevelopment. Glasgow Merchant City was identified as one such venue. Decision-making processFollowing extensive customer research and insights work that had commenced in 2019/2020, and as part of the Transformation plans, the Chief Transformation Officer and Venues Managing Director presented to the Board redevelopment plans for Glasgow Merchant City. The Board challenged management to ensure that it had considered the views of all key stakeholders in developing the plans. This included local authority and licensing considerations, relationships with suppliers, colleague views and the overall anticipated return on investment. It discussed the potential impact of land-based reforms under the UK Government’s Gambling Act 2005 review on the property. It also discussed the role of this redevelopment in Grosvenor’s overall strategy, noting that the proposition would be a new concept casino and the need therefore to evaluate and reflect on learnings in order to inform further Grosvenor venues investments. Under the Board’s delegated authority the Finance Committee reviewed and approved the final capital expenditure for the Merchant City redevelopment. Key stakeholder considerationsCustomers – player protection, customer experience, relevance of offering and health & safetyOur people – opportunities for progression, opportunities to share ideas and make a difference, health & safety and wellbeingCommunities – positive community impact and local employment Regulators and legislators – compliance with laws and regulations, safer gambling, policy and gambling regulatory changeShareholders & Investors – strategy, performance and outlook, corporate governance and ESG Suppliers – robust business, long-term partnerships and a collaborative approach Key ESG considerationsCustomer – engagement informed development plans, safer gambling, customer service, product quality and health & safetyColleague – engagement, training, ongoing opportunities for developmentEnvironment – energy-efficient approach, such as to lighting and air conditioningCommunity – impact on local environment, redevelopment is aligned with and builds on local area investmentActions and outcomesThe Board challenged the business to consider how the redevelopment aligns and will continue to align with the strategic pillars. Management to report back on initial customer feedback, venue performance following reopening and how this redevelopment will inform other similar investments. Impact of these actions on the long-term success of the CompanyThe Board recognises the need to continuously evolve the venues estate with engaging propositions that appeal to both existing and new customers in order to create long-term value and sustainable growth.The Rank Group PlcAnnual Report 2022 Stakeholder engagement
We believe that to secure our long-term
success, we must take account of what
is important to our key stakeholders.
This is best achieved through proactive
and effective engagement, which helps
us to identify and focus on the issues that
matter most and factor stakeholders’
views into our decision-making. Active
stakeholder engagement is a key part
of how we manage risks and unlock
opportunities.
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 32 and the case studies on
pages 33 and 34. We also engaged with our key stakeholders in
conducting the materiality assessment that shaped and informed
our ESG strategy (please see page 55 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.
Above:
Mecca Luton
35
Customers
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
by means of digital interfaces and conversations in our venues
and remotely. 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.
2021/2022 highlights
– Sought customer views on our approach to protective measures
as pandemic restrictions were lifted.
– Utilised customer insights and considered customer feedback
as part of Mecca and Grosvenor brand development and
decision-making in connection with the redevelopment of
venues including Mecca Luton, Grosvenor Glasgow Merchant
City, Grosvenor Blackpool and Grosvenor Bristol.
– Conducted intercept interviews, accompanied visits and four
mixed age customer groups made up of both infrequent and
regular bingo customers after the reopening of Mecca Luton
in May 2022.
– Utilised an ‘always on’ customer survey focusing on customer
experience in Mecca venues, which can be completed in-person
or via an app.
– Conducted an online survey among a nationally representative
audience based on age, gender and social class to understand
the size of the casino and bingo cross-channel markets and
customer views. Also utilised customer focus groups made
up of representative samples of online and venue customers
who evaluated a set of proposals designed to enhance and
encourage cross-channel play.
– Conducted player research and sought feedback on products
and user journeys, utilising the output in product development
and to inform our approach to user journey refinement. This
led to, amongst other things, safer gambling tool development
work, game tile optimisation and registration improvements.
Above:
Grosvenor Glasgow Merchant City
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview How we create long-term value
Continued
Our people
Our people are the heart and soul of the business and central
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
newsletters 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.
2021/2022 highlights
– Regular communication Group-wide by way of our
Get Connected programme.
– 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.
– Held workshops to assess further ways to develop and enhance
our safer gambling culture and rolling out further tailored
training in response.
– Employee Voice meetings attended by elected representatives
from the business, senior human resources management and
the Chief Executive.
– Talking STARS and Leading STARS forums held and attended
by the designated Non-Executive Director.
– Conducted a full Employee Opinion Survey in September 2021
and a ‘pulse survey’ in May 2022 and implemented action plans
following a review of results.
– STARS values awards continued to recognise individuals
and/or teams for demonstrating Rank’s values in their work,
nominated by their peers.
– Embedded 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, and inviting
a psychotherapist to talk on mental health.
– Wellbeing@Rank programme.
– Open dialogue with trade unions.
– The Board considered workforce engagement updates from
designated Non-Executive Director (who is also chair of the
Remuneration Committee), providing insights from our
colleagues both positive and negative from the regular cadence
of employee forums throughout the year.
– Board Directors conducted site visits to engage firsthand
with colleagues.
Above:
Support Office, Maidenhead
36
Above:
Mecca Luton
The Rank Group PlcAnnual Report 2022 2021/2022 highlights
– Continued to support our communities as the pandemic eased
and continued to make support calls to Mecca customers
including those self-isolating.
– Supported the ‘Everyone Deserves a Christmas’ campaign by
distribution of hampers to local vulnerable and isolated people.
– Raised £284,484.51 during the 2021/22 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. This included an
invitation to carers to take a break and enjoy a Mecca Bingo
club game or Grosvenor venues’ afternoon tea.
– Promoted local vacancies according to postcode regions and
their local job centres and colleges to ensure job seekers can
find local employment and one which has proved to be
successful recruitment method.
– Considered community contribution and impact when
considering estate strategy.
Communities
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.
We engage with the local community through volunteering,
charity work and providing employment and work experience
opportunities.
We are particularly proud of our eight-year partnership with
Carers Trust.
Above:
Mecca Dagenham
Everyone Deserves a Christmas
37
Above:
Grosvenor The Victoria
City Poker Night charity event
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview How we create long-term value
Continued
Regulators and legislators
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) remains a
key focus, particularly in the UK this year with the wide-ranging
review of gambling legislation that is underway. We conduct such
engagement ourselves and also through industry bodies, such
as the Betting and Gaming Council (‘BGC’), the Casino Group
(within the BGC) 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.
2021/2022 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.
– Scheduled a programme of MP visits to local constituency
Grosvenor Casinos.
– Attended and hosted at the Labour party and Conservative
party conferences.
– Executive appearances in front of a number of All-Party
Parliamentary Groups, addressing representatives in
Parliament in relation to the UK Government’s review of the
Gambling Act 2005.
– Chair attended the Commission’s chairs roundtables during
the year.
– Chief Executive attended a meeting held at the BGC offices
with the Commission’s CEO during the year.
– Regular contact with officials in DCMS, including the current
and former Gambling Minister, as we sought to articulate the
case for legislative change that supports Rank’s strategy.
– Members of BGC, Bingo Association and JDigital – lobbyists.
– Submitted Annual Assurance Statement to the Commission.
– Worked on a transparent and collaborative basis with the
Commission and our other regulators.
– Responded to the Commission’s consultation in relation to
Licensing, Compliance and Enforcement Policy.
Above:
Grosvenor Glasgow Merchant City
Above:
Grosvenor Glasgow Merchant City
38
The Rank Group PlcAnnual Report 2022 Shareholders and investors
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.
2021/2022 highlights
– 38 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
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.
– Chair and Senior Independent Director engaged with
shareholders in response to specific meeting requests,
which included discussions on ESG.
– Consultation with major shareholders on the Recovery
Incentive Scheme which was subsequently approved
by shareholders at the 2021 AGM.
Suppliers
We have relationships with circa 1,200 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 and good communication were
particularly important during the pandemic, both for the period
for which our venues were closed, but also in relation to the
collaboration required to implement closures and reopenings.
2021/2022 highlights
– Worked with our suppliers to ensure a pragmatic approach
to recovery from the pandemic.
– Implemented new software solution to improve management
of contract life cycles.
– Implemented a refreshed supplier relationship management
framework to support improved ways of working whilst driving
value creation for both Rank and its partners.
– Worked with suppliers to ensure smooth transition during
platform migrations undertaken during the year.
– Received votes from 93.19% of shareholders for the 2021 AGM.
– Provided training to suppliers and contractors as appropriate
when visiting our venues.
– The Group’s Modern Slavery Statement, which is submitted to
the Board for approval each year, can be found on www.rank.com.
Above:
Grosvenor The Victoria
City Poker Night charity event
39
The Group’s Modern
Slavery Statement
can be found on
www.rank.com
Above:
Grosvenor Casinos
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our strategy
Our strategy
is to evolve our
position as an
entertainment
brand
Learn more about
our business model
on pages 72-73
40
The Rank Group PlcAnnual Report 2022 This year we are reporting under our five
refreshed strategic pillars. Our strategy
remains focused on driving our digital
business and evolving our venues,
alongside a seamless cross-channel
experience.
We took the opportunity to ensure
our sustainability objectives were fully
embedded in the Group’s strategy and
now have two pillars dedicated to our
sustainability focus areas of customer,
colleagues, communities and the
environment.
Our five strategic pillars:
1. Provide a seamless experience
2. Drive digital growth
3. Evolve our venues
4. Be passionate about our colleagues
5. Build sustainable relationships
41
Above:
Mecca Luton
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our strategy
Continued
Strategic
pillar 1
Provide a seamless and
tailored experience for
customers across venues
and online
42
Above:
Grosvenor The Rialto
The Rank Group PlcAnnual Report 2022 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 125 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
– Launch Mecca’s big money
Fortune game once joint liquidity
functionality is rolled out across
the Mecca venues estate.
– Unify registration across venues
and online for Mecca customers.
What we did
– Delivered first to market product, Mecca Fortune, providing live bingo across
our Mecca estate and online.
– Delivered phases 1 and 2 of Mecca’s unified registration across venues and online
meaning customers can sign up seamlessly irrespective of channel via their mobile
phones or via QR codes in our Mecca venues.
– Develop microsites for key
– Launched Mecca venues specific pages onto meccabingo.com where customers
Mecca venues.
can discover more about their venue before visiting.
– Enhance functionality of the My Mecca
app to deliver greater personalisation.
– Considered as part of Mecca’s overall app strategy which was further developed
during the year.
– Further development to improve
– Launched thevic.com where customers can discover much more about the venue
cross-channel customer journeys in
Grosvenor, particularly as we migrate
to the new proprietary platform, RIDE.
before they visit. Also launched rialtocasino.com.
– Developed a quicker sign-up journey, just five clicks, for both new and existing
customers.
– Cross-channel advocates onsite in all venues helping customers to register and
experience our digital offerings.
– Developed and piloted an industry-first electronic roulette progressive jackpot game
across five casinos providing our customers the ability to win an estimated jackpot
of over £1m from a £1 stake. Option to link to digital under investigation.
– Enhance our sportsbook proposition
– Completed enhanced sports viewing areas in eleven of our casinos enabling
in selected Grosvenor venues.
– Develop brand apps to support
cashless transactions in venues.
– Multi-channel TV advertising
campaigns for both Mecca
and Grosvenor.
customers to have better visibility of odds and offers from our Grosvenor sportsbook
and bet directly using QR codes.
– Dedicated new sports zones in our casinos in Huddersfield, Sheffield, Blackpool,
Luton and Glasgow Merchant City.
– Continued to develop app strategy for each brand and this remains a priority focus
area for 2022/23.
– This will be an area of focus for 2022/23 following the investment into digital
customer journeys post-platform migration.
– Further development of Enracha’s
– Work has focused on improving the digital offer in the current year and the focus
cross-channel offer.
will move to improving the cross-channel experience in 2022/23.
KPIs
Percentage of venues customers
that play with us online
13%
Grosvenor +4ppts
Percentage of digital NGR from
cross-channel customers
75%
Grosvenor +44ppts
9%Mecca -5ppts
0%Enracha +0ppts
23%
Mecca +4ppts
0%
Enracha +0ppts
Areas of focus for 2022/23:
– 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.
– Launch live streaming from a further
four Grosvenor casinos to our online
audiences and deliver improvements
to the digital live roulette experience.
43
– Introduce artificial intelligence to
better drive personalisation for our
Grosvenor sports and gaming
customers showing offers, bets and
homepages tailored to their behaviour.
– Continue to deliver compelling Mecca
offers focused on driving new
customer acquisition and retention.
– Launch unified Mecca membership
across online and in venues that
will bring real time communication,
personalised content, cross sell and
improved onboarding.
– Introduce a new Mecca loyalty card
embedded into our apps and single
membership journey aligned to our
single app strategy.
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our strategy
Continued
Strategic
pillar 2
Drive digital growth
powered by our proprietary
technology and live play
credentials
44
Above:
grosvenorcasinos.com
The Rank Group PlcAnnual Report 2022 We have built strong positions in venues-based gaming which we are seeking to replicate across our digital channels. In 2021/22,
our digital operations generated 28% of Group revenue. Across the UK as a whole, digital channels represented around 49% of the
gambling market (excluding the National Lottery) pre-pandemic, presenting a significant growth opportunity.
What we said
– Migrate meccabingo.com (Q3 2021/22)
and grosvenorcasinos.com (Q4
2021/22) onto the proprietary platform.
What we did
– Meccabingo.com was successfully launched onto the RIDE platform in January 2022,
on time and on budget. grosvenorcasinos.com is due to be migrated in Q1 2022/23.
– We migrated our enracha.es site to the Yo proprietary platform, providing greater
development flexibility and scalability.
– Continue the development of new
features to enhance our digital
experience.
– Enhanced personalisation delivered for grosvenorcasinos.com and meccabingo.com
customers tailoring experience to their preferences.
– Improvements delivered for meccabingo.com to improve customer engagement
through the use of pop-ups and banners.
– Additional live casino tables on rialto.com and thevic.com so online players can play
in venues across different European cities.
– Relaunched our sportsbook for enracha.es in the year following its migration onto
the Yo platform.
– Launched Britain’s Got Talent campaign on radio and in print to drive Mecca brand
awareness alongside a daily retention game.
– 5% increase in marketing investment in UK gaming brands.
– A focused approach to our app strategies is a key priority for 2022/23.
– Optimise marketing effectiveness and
scale investment to drive higher levels
of customer acquisition.
– Refresh app strategies with a sharper
focus on cross-channel and supporting
venues experiences.
– Launch new B2B international
– Various B2B partnership opportunities were investigated in the year, however none
partnerships where Rank can provide
its digital offer to established
international gaming venues
businesses.
were considered suitable at this current time.
KPIs
Digital NGR
Customer numbers
UK £162.3m; +4%
International £21.0m; +4%
UK digital 746k; 0%
International digital 47k; -39%
Areas of focus for 2022/23:
– Migrate grosvenorcasinos.com onto
our RIDE platform.
– Enhance Grosvenor’s Daily Retention
Game offering our customers greater
variety and range of prizes.
– Launch the streaming online of live
immersive events in our Mecca venues
to help drive cross channel acquisition.
– Launch a new Spanish sports betting
site YoSport.
– Launch new apps for YoCasino and
YoSport in Spain.
– Roll-out a cross-channel strategy
for Enracha.
– Launch YoBingo in Portugal to replicate
the successful YoBingo model.
– Upgrade the proprietary Yo technology
– Deliver the significant development
platform.
roadmap which follows the migration
of Grosvenor onto the RIDE platform.
45
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our strategy
Continued
Strategic
pillar 3
Continuously evolve
our venues estate with
engaging propositions that
appeal to both existing and
new customers
46
Above:
Grosvenor Bristol
The Rank Group PlcAnnual Report 2022 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
– Refurbishment of further casinos
following the success of previous
pre-COVID-19 investments.
– Launch the new Employee Value
Proposition (‘EVP’) for Grosvenor
colleagues.
– Introduce a new food and beverage
proposition across the Grosvenor
estate tailored to each local market.
– Develop a new demand rostering tool
for Grosvenor covering all areas of
the casino.
What we did
– New brand proof of concept venue launched in Glasgow Merchant City offering
a dramatic new look, new restaurant and bars and sports viewing zone.
– Completed refurbishments in Huddersfield, Bristol, Blackpool, and Walsall improving
casino gaming area layouts and providing better quality restaurants and bars.
– Added an additional Adult Gaming Centre licence to our St Giles casino in London
and expanded our slots offering in Nottingham.
– New e-gaming terminals launched across London and in key regional casinos
to improve customer choice and quality of experience.
– Launched to all Grosvenor employees offering a development pathway to further
their career with Grosvenor.
– Pilots of new menu concepts trialled at The Vic, Merchant City and Blackpool casinos.
Enhanced menus launched along with the refurbishments at our Huddersfield,
Bristol and Walsall casinos.
– Tool in pilot at our Nottingham and Birmingham Hill Street casinos. Performance
has been in line with expectations and the tool will be rolled out across the
remaining casino estate in Q1 2022/23.
– Development of a new concept Mecca
– Our new concept venue at Luton opened in March 2022 with a new ‘always on’ bingo
venue in Luton.
schedule and refreshed food and beverage menu.
– Expansion of Mecca’s new and
improved food and beverage offer
to additional venues.
– New menus delivered for both food and beverage across 14 Mecca venues.
– Further development underway and will be further trialled in another 16 venues
in early 2022/23.
– Further develop improvements for
– Investment in better value for our bingo customers with the introduction of lower
Mecca’s core mainstage bingo game.
prices and bigger guaranteed prizes.
– Implement new machine management
system across the Enracha estate.
– Open our first stand-alone Enracha
Stadium venue.
KPIs
Customer numbers
1,001k
Grosvenor venues +276%
– A new portfolio of side bet games was introduced alongside the mainstage bingo game.
– Upgraded 700 gaming machines, bringing improved variety to our customers.
– Successful delivery has provided us with greater visibility of the performance
of the machines across our Enracha venues.
– Currently on hold as we investigate further the available licensing options.
Strategic investment
£11.8m
Grosvenor venues FY21 £0.3m
Net promoter score
57%
Grosvenor venues +4ppts
635k
Mecca venues +104%
£3.7m
Mecca venues FY21 £0m
61%
Mecca venues -3ppts%
201k
Enracha venues +86%
£0.4m
Enracha venues FY21 £0m
45%
Enracha venues* +9ppts
Areas of focus for 2022/23:
– Launch of new rewards and incentives
programme for our Grosvenor venues.
– Continue the development and
refurbishment of the Grosvenor estate
with 12 venues listed for refurbishment
in FY23.
– Launch of a new electronic roulette
jackpot game, Going for Gold, across
our Grosvenor estate.
– Focus on improving the slots
performance of our Mecca venues
through a better product mix and
presentation in venue.
– Investigate opportunities to share
space in our Mecca venues through
complementary partnerships and
collaborations with third parties.
– Continue the Enracha venues
investment programme in our
Andalucía and Sabadell venues.
47
*
Compared to FY20, not measured in FY21.
– Consider prospective opportunities
to continue growing in the Spanish
market through targeted acquisitions.
– Deploy player tracking and new
jackpots in each Enracha venue
to improve customer experience.
– Full deployment of our Enracha venues
loyalty card into all permitted venues.
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our strategy
Continued
Strategic
pillar 4
Be passionate about the
development and well-
being of our colleagues and
the contribution we make
to our communities
48
Above:
Mecca Luton
The Rank Group PlcAnnual Report 2022 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, offices and colleagues play in the communities in which we operate and together as a collective organisation we strive to
add value wherever possible.
What we said
– Implement ‘Raising Our Game’, our
What we did
– Grosvenor launched a refreshed career pathway to 3,500 venues colleagues allowing
new Employee Value Proposition (EVP)
across the Grosvenor venues business,
to engage our colleagues in delivering
a differentiated customer experience.
– Implement best in class service
training to support the new Mecca
brand proposition underpinning
our ‘Mecca of the Future’ strategy.
– Implement the ‘Talent’ workstream
of Transformation 2.0, ensuring we
recruit, develop and retain emerging
and top talent.
them access to bespoke support through training and development activities.
‘Raising our Game’ was evolved during the year into a Group-wide programme,
renamed ‘Work. Win. Grow.’.
– A new suite of training initiatives was implemented in the year covering a wide
range of topics, from customer service principles to training on ensuring a deeper
knowledge of each product on offer.
– We have implemented talent programmes at three levels with appropriate levels
of development and support for each. There are 70 colleagues across Rank in talent
programmes with support for them ranging from individual coaching to group
development programmes to post-graduate level programmes at prestigious
universities or institutions specialising in leadership development.
– Continue to develop a high-
– We continue to develop the culture at Rank and have seen an improvement of 3ppts
performance culture, including
understanding the progress being
made through our Employee
Opinion Survey.
– Continue to deliver the Group’s
inclusion and diversity strategy,
including the annual calendar of
events and building on the forums
that are already in place, such as
Families@Rank.
in our engagement score during the year. Our work on Equality, Diversity and
Inclusion (‘ED&I’) is an example of the progress we are making with a question
on ED&I being among the highest scoring in the engagement survey. We continue
to regularly recognise colleagues against Rank’s STARS values.
– Our key ED&I achievement in the year was the successful launch of six ED&I
colleague network groups. The groups provide our colleagues with the opportunity
to provide insightful feedback on where improvements can be made. Each group is
sponsored by an Executive Committee member and supported by a leading external
ED&I partner.
– Ensure colleague facilities are
– We now ensure that all back of house colleague areas are considered as part of all
considered in all venue investments.
– Review working environments
and facilities for our support
office colleagues.
venue refurbishments. In the year, specific improvements were made in our Bristol,
Walsall and Glasgow Merchant City casinos.
– We have placed greater emphasis on collaboration and communication across our
offices to accommodate the changes in colleague working patterns post-COVID-19.
KPIs
Females in senior positions
UK colleagues from ethnic minority
backgrounds
Female 27%; +0ppt
Male 73%; +0ppt
Ethnic minority 32%; +1ppt
White British 68%; -1ppt
Contribution to good causes
£0.3m+0%
EOS engagement score
68%+3ppts
Greenhouse gas emissions intensity
39.2 tCO2e per £m NGR
-40%
Areas of focus for 2022/23:
– 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.
– Expand the reach of the Group’s ED&I
colleague network groups and launch
the Group’s first neurodiverse colleague
network group.
– Launch and embed the newly developed
Group-wide EVP Work. Win. Grow.
– 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.
49
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our strategy
Continued
Strategic
pillar 5
Build sustainable
relationships with our
customers by providing
them with safe
environments in which
to play
50
Above:
Mecca Luton
The Rank Group PlcAnnual Report 2022 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.
What we said
– Rollout a more player centric risk-
What we did
– We have developed a holistic risk matrix to better identify potential ‘at-risk’ play
based affordability assessment model
in Grosvenor venues.
and to assess a customer’s level of affordability. The matrix was trialled in mid-2021,
then rolled out in November to all Grosvenor venues.
– Deliver a real time monitoring tool
looking at customer activity and
changes in customer play in
our casinos.
– Continue our safer gambling cultural
assessment work with colleagues.
– Rollout further refreshed safer
gambling messaging and
communications across Rank
businesses.
– Introduce real time view of customer
play across all brands and channels
to help detect earlier potential at-risk
customers in venues and online.
– Implement a more robust customer
interaction evaluation framework to
help inform and evolve our approach
to player protection.
– This is still under development and will be delivered in H1 2022/23.
– Completed cultural assessment and findings incorporated into three key actions,
as follows:
– Vision: the articulation of what we stand for and why is safer gambling is important
to us.
– Messaging: consistent and regular communication from the leadership team
to reinforce the vision.
– Development of knowledge and skills: deliver role appropriate training supported
by GamCare. This is ongoing and is due to complete by December 2022.
– For our UK digital customers, we introduced a new welcome journey with clear
messaging around what safer gambling measures we have in place and what safer
gambling mechanisms are available to our customers.
– In our venues, we provide and make available to take away, clear and consistent safer
gambling information for our customers.
– We have commenced a project to deliver a cross-channel single customer view,
expected to be delivered in 2022/23.
– To be delivered following further refinement as part of our safer gambling algorithm
for digital customers.
– Further develop our holistic and
– Currently in development and due for implementation in H1 2022/23.
risk-based model for early intervention
for potentially at-risk play.
Areas of focus for 2022/23:
– Continue to refine and improve
the holistic player protection model
in our Grosvenor venues.
– Improve the tools available to
Grosvenor venues colleagues to
make decision-making more efficient
and effective.
– Review and improve our digital
– Continue to develop our markers
of harm model as part of a continuous
improvement and evaluation of player
protection risk models.
– Work towards achieving GamCare
safer gambling accreditation across
our UK operations.
customer onboarding journeys to
remove unnecessary friction caused
by ‘know your customer’ and player
protection processes.
– 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.
51
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our key performance indicators
KPI:
Financial KPIs
Digital NGR
Strategic investment
KPI:
Stakeholder KPIs
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
EOS score
Females in senior positions
UK colleagues from ethnic
minority backgrounds
Contributions to good causes
Greenhouse gas emissions intensity
Strategic pillar
2
3
Page
45
47
Strategic pillar
Page
1
1
2
3
3
4
4
4
4
4
43
43
45
47
47
49
49
49
49
49
Financial KPIs
Underlying1 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 95% in the year due to the impact
of venue closures and other restrictions during the pandemic
in the prior year.
2022
2021
2020
£329.6m
£644.0m
£629.7m
Underlying1 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 increased to an operating profit of £39.8m due
to the impact of venue closures and other restrictions during
the pandemic in the prior year.
2022
2021
2020
£39.8m
£(84.5)m
£49.1m
Net debt
Net debt is calculated as total borrowings less cash and short-
term deposits. Net debt decreased in the year due to £100.7m of
cash generated from operations during the year and the £83.1m
VAT repayment received in December 2021 offsetting the
operational cash used in the business.
2022
2021
2020
£162.6m
£256.7m
£297.5m
Underlying1 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 increased to £107.2m due to the return to
profit following the temporary closure of the Group’s venues
during the COVID-19 pandemic in the prior year.
2022
2021
2020
£(14.2)m
£107.2m
£123.8m
Our five strategic pillars:
1 Provide a seamless experience
2 Drive digital growth
3 Evolve our venues
4 Be passionate about our colleagues
5 Build sustainable relationships
52
The Rank Group PlcAnnual Report 2022 Stakeholder KPIs
Earnings per share (‘EPS’)
EPS is a key indicator of the Group’s growth after allowing for all
costs including separately disclosed items. EPS increased to 14.2p
reflecting the operating profit generated in the year.
2022
2021
2020
14.2p
(16.5)p
2.5p
Underlying1,2 EPS
Underlying EPS is a key indicator of the Group’s growth before
allowing for separately disclosed items.
Underlying EPS increased to 4.3p due to the operating profit
generated in the year.
2022
2021
2020
4.3p
(20.3)p
6.7p
Dividend per share
Dividend per share is the sum of declared dividends issued by the
Company for every ordinary share outstanding.
In light of the COVID-19 pandemic and the material impact on
our business, the Group did not pay an interim dividend and the
Board will not be proposing a final year dividend for 2021/22.
2022 0p
2021
0p
2020
2.80p
1. 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; retranslation and remeasurement of foreign currency
contingent consideration; discontinued operations, significant material
proceeds from tax appeals and the tax impact of these, should they occur
in the period. Collectively these items are referred to as separately disclosed
items (‘SDIs’).
2. Before discontinued operations.
53
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
The following report presents a summary
of Rank’s ESG & safer gambling
commitments and approach. At Rank
we are dedicated to ensuring we operate
sustainably and we have aligned our
processes and policies to international
best practice as part of the strategy to
build an even more resilient and
responsible business.
Our more detailed sustainability disclosure
is included in our maiden full year
Sustainability Report (see www.rank.com),
which includes indexes aligned to the
Sustainability Accounting Standards
Board (SASB) and the Global Reporting
Initiative (GRI). 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’).
Materiality assessment
To ensure that what is most material to the business is being addressed in our ESG
strategy, a key first step was conducting a materiality assessment that engaged with our
stakeholders. Conducted during the 2020/21 financial year, this assessment established
which issues are most important for Rank, from an internal and external perspective.
The results have shaped and will continue to inform our ESG strategy.
17
16
25
15
23
22
14
24
13
20
10
19
2
4
5
12
9
21
11
8
6
1
7
3
18
)
l
a
n
r
e
t
n
i
(
s
l
a
o
g
l
a
i
c
r
e
m
m
o
c
d
n
a
s
s
e
n
i
s
u
b
o
t
e
c
n
a
v
e
l
e
R
Importance to stakeholders (external)
Governance
18 Executive remuneration
19 Procurement practices
20 Supplier relations
21 Corporate governance
22 Economic performance
23 Leadership capability
24 Business ethics
25 Regulatory compliance
Environment
1 Energy use
2 Carbon emissions
3 Waste management
4 Water use
People and Communities
5 Community investment
6 Diversity and inclusion
7 Health and safety
8 Employee engagement
9 Talent management
10 Employee wellbeing benefits
11 Employee training and development
12 Product safety and quality
13 Ethical marketing
14 Customer welfare
15 Customer privacy and data security
16 Protecting young and vulnerable
customers
17 Safer gambling
For Rank’s 2022
Sustainability Report,
please go to
www.rank.com
54
The Rank Group PlcAnnual Report 2022
ESG strategy
During the development of our sustainability strategy, it has been
important to ensure that our objectives relate to and integrate
with our company growth objectives. Our aim and obligation to
shareholders is to be careful custodians of their investment and
this review of material issues within our operations has improved
our appreciation of material risks, aiding our management and
mitigation of potential issues to preserve value in our organisation.
We have established four key focus areas which feed into the
overarching Group strategic pillars and are therefore integrated
with our corporate strategy: Customer Experience; Colleague
Experience; Environmental Management; and Community
Engagement. Each focus area has underlying objectives and
key material issues. We have also started to define a range of
associated ESG-related key performance indicators on which
to measure our progress.
Group strategic pillars
– Provide a seamless and tailored experience for customers across venues and online
– Drive digital growth powered by our proprietary technology and live play credentials
– Continuously evolve our venues estate with engaging propositions that appeal to both existing and new customers
– Be passionate about the development and wellbeing 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
ESG focus areas and objectives
Customer
experience
– Provide a safe, secure
environment and personal
experience
– Create and maintain good
gambling behaviours
– Protect vulnerable
customers
Colleague
experience
– Educate our people to
enable and encourage
positive gaming behaviours
– Create a fair, safe and
inspiring working
environment
Environmental
management
Community
engagement
– Ensure that our operations
minimise any negative
impacts we may have
– Reduce our carbon
emissions wherever
possible
– Provide an essential social
outlet for customers and
generate lasting community
spirit
– Drive community action
and develop genuine social
legacy
– Safer gambling
– Protecting young and
vulnerable customers
– Customer privacy &
data security
Key material issues
– Customer welfare
– Ethical marketing
– Product safety & quality
– Leadership capability
– Talent management
– Employee training &
development
– Employee engagement
– Environmental
management
– Community engagement
– Regulatory compliance
– Economic performance
– Business ethics
Data point
68%(2021: 65%)
Employee opinion survey engagement score
39.2 tCO2e per £m NGR
(2021: 65.8 tCO2e per £m NGR
Energy use (intensity ratio)
£0.3m(2021: £0.3m)
Charitable community contributions
What this means
To deliver an exciting and entertaining experience, we require
a workforce of engaged and motivated employees.
We have engaged with our utility suppliers, fleet managers
and carbon consultants to understand where we can make CO2
savings across our operations.
Through our venues, we connect with a wide range
of communities and have the ability to positively impact
socio-economic standards, through jobs, tax payments
and charitable donations.
55
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
ESG governance
To ensure effective governance of
ESG-related matters and initiatives, during
the year we implemented an updated
governance structure.
While the Board continues to have overall
responsibility for the Group’s ESG strategy,
responsibilities are delegated to the ESG
& Safer Gambling Committee as set out
in the Committee’s Terms of Reference
(for more information, please see the
ESG & Safer Gambling Committee Report
on page 114). This includes overseeing the
progress made by the business under each
of our four ESG focus areas established
this year: Customer Experience, Colleague
Experience, Environmental Management,
and Community Engagement. The Chair
of the Committee keeps the Board
appraised of the Group’s ESG performance
and any arising issues. The Group’s Risk
Committee also keeps the Board and Audit
Committee informed of new or emerging
ESG risks as they relate to the Group.
At management level, our cross-
disciplinary ESG Steering Committee is
responsible for reporting on ESG-related
data points and initiatives under each of
the four focus areas. Its members include
representatives from each area of the
business together with subject matter
experts from across the Group. The
steering committee is responsible for
providing updates to the ESG & Safer
Gambling Committee. The steering
committee ensures that it is informed
of ESG issues through multiple channels
including webinars, publications, and
ongoing advice from ESG corporate
advisors. As our approach to ESG
management continues to mature, our
governance of ESG matters will become
further embedded into the business.
Board of Directors
ESG & SG Committee
– Climate change policy
– Climate change risk
Audit Committee
ESG Steering Committee
Risk Committee
External ESG
specialist
Carbon Reduction
Working Group
Learn more about
our approach to ESG
governance in our
ESG & Safer Gambling
Committee Report
on page 114
56
Customers
Our purpose is to provide an entertaining
and exciting experience for our customers,
and we are continually engaging and
listening to feedback in order to deliver
products and services to best suit them.
Concurrently, working in the gambling
industry we fully appreciate the associated
responsibility to customers’ welfare and
minimising the risk of gambling-related
harm. That is why our commitment to
protecting our customers and promoting
safer gaming is intrinsic to everything we
do. Through advocating an understanding
of responsible play, providing a range of
robust safer gambling tools, utilising
technology to identify ‘at risk’ customers,
and cultivating a culture of awareness, we
are well placed to fulfil this commitment.
Safer Gambling
As every customer is different, there is
no one-size-fits-all approach to identifying
‘at-risk’ play. We employ a wide range of
safer gambling measures to identify any
issues at the earliest possible opportunity.
Assessment and improvement of these
measures is ongoing as we respond to
developments in technology and customer
understanding, as well as new legislation
and regulation. However, the most
effective means of preventing harm and
ensuring a positive experience is through
empowering our customers. By providing
access to safer gambling tools and
educating customers about responsible
play, we are equipping our customers with
the understanding to use our products and
services safely.
“ We are equipping
our customers with
the understanding
to use our products
and services safely.”
Adele Farrell
Director of Compliance &
Responsible Gambling
The Rank Group PlcAnnual Report 2022 Safer gambling messaging
Commensurate with our commitment to
keeping our customers safe, safer gambling
messaging is incorporated into our
operations and communications. Our
dedicated responsible gambling website,
Keep It Fun (https://keepitfun.rank.com/),
provides a hub for advice and information
on safer gambling tools, and the Keep It
Fun messaging appears on all our
communications as standard. We are keen
that this messaging is ubiquitous so that
customers can easily access support
should it be required.
Within our venues, safer gambling
messaging is continually visible. We have
resources on the casino floors and in
bingo halls, display responsible gambling
signage, and promote safer gambling on
our media screens. We also have resources
in the back offices of our venues to ensure
that our employees remain cognisant of our
commitment to safer gambling and are able
to quickly access safer gambling materials.
Safer gambling tools utilised
by Rank
We are continually assessing and
improving the safer gambling measures
we have in place with the objective of
minimising the risk of gambling-related
harm. The proportion of individuals that
display problem gambling behaviours
is very small, and we strive to identify
these individuals and focus our efforts
on providing them with the support they
require, whilst at the same time seek to
provide a seamless user journey for our
customers. The approach that we take
inevitably varies by channel and also
by jurisdiction. We utilise data models to
better identify ‘at-risk’ players, have 24/7
live monitoring for our online brands,
and are progressing our ability to have
a real-time single customer view.
Safer gambling tools available
to customers
In addition to the tools that we deploy to
identify those customers who may require
support and with whom to interact when
appropriate, we also provide tools to help
our customers remain in control of their
play and reduce the risk of harm. All the
information, advice, and signposting for
support is available to customers on
our dedicated safer gambling website,
Keep It Fun.
Customers themselves can apply machine
loss and time limits at slots and electronic
roulette machines in our Grosvenor venues,
B3 gaming machines in the Mecca estate,
and deposit alerts on Mecca Max electronic
touch screen tablets. When a customer
triggers an alert or reaches a self-set
machine spend, an interaction is triggered
and a notification is sent to a dedicated
mobile handset carried by the relevant
venue’s manager.
For customers that are concerned that they
have a problem with gambling and feel
that the tools available are not sufficient
to protect them, they can choose to
self-exclude. Our Grosvenor Casinos,
Mecca Bingo clubs and online sites all
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 CRM system which will suppress
all marketing communications to that
customer and the process of re-joining
following a self-exclusion is also arduous
by design.
Employee training
To ensure these tools are used to best
effect, it is imperative our employees
are equipped with the skills and
understanding to support customers and
intervene when necessary. Every employee
must complete mandatory safer gambling
training, with progress being monitored
through our online platform. In the past
year we have invested significantly in
additional safer gambling training for our
colleagues. In partnership with GamCare,
the leading charity in our sector for
support with problem gambling, we are
delivering further training to employees
to build upon their existing knowledge and
skills as to how to interact with customers
and recognise changes in patterns of play.
Preventing underage play and
protecting vulnerable customers
At Rank, we pay particular attention
to protecting our younger and more
vulnerable customers from being harmed
or exploited by gambling in accordance
with the Gambling Commission for Great
Britain’s (‘Commission’) Licence
Conditions and Codes of Practice.
Recognising that customers under-25
are more vulnerable than those in higher
age brackets, we factor in the age of our
customers as part of our affordability
model, and apply automatic deposit limits
for all customers under-25.
We employ a range of measures to prevent
underage play online and in our venues.
For example, our policy of registration at
all Grosvenor venues limits the risk of
under-18s entering the premises, and we
use third-party credit reference databases
to check and validate customer registration
details online. We do not market our
products and facilities in such a way as
to appeal to children or young people.
As a means of providing reasonable
assurance that we have effective policies
and procedures to prevent underage
gambling, Rank’s casinos and bingo venues
participate in collective test purchasing
programmes organised by the respective
trade associations.
Customer privacy and data security
At Rank we take responsibility for
protecting our customers’ privacy and
keeping their data secure when they play
with us. We have a mature approach to
data security; our priority is to prevent
breach or loss of data and to ensure data
is used in a fair and transparent manner.
This is managed via appropriate tooling
and processes, with broad alignment to
ISO 27001 and enhanced requirements of
other regulators including the Commission,
the Information Commissioner’s Office
and PCI-DSS regulations. We employ a
wide range of protection measures, and
to ensure the effectiveness of our systems
we have regular audits and assessments.
All employees are required to abide by
policies and procedures that relate to
the key data protection principles and
information security protocols and must
complete mandatory training in respect
of data and information security.
Learn more about
our approach to Safer
Gambling in our 2022
Sustainability Report
at www.rank.com
57
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
Customer service
In order to continually drive
improvements in our customer
experience, we need to understand what
it is our customers are looking for when
they visit us in venue or online. Through
a variety of channels, we engage with
our customers to establish their
preferences, gather feedback, and
resolve any issues that may arise.
Katie McAlister
Chair of the ESG & Safer Gambling Committee
Above:
Mecca Luton
58
The Rank Group PlcAnnual Report 2022 Recruitment and development
opportunities
In order to attract and retain the most
talented individuals we are focusing
on streamlining our recruitment process
and making sure we are hiring the most
qualified individuals from a diverse pool
of candidates as quickly as possible. We are
currently developing our new employee
value proposition, Work. Win. Grow.,
which focuses on creating exciting
opportunities for our employees, and
attracting talented, energetic people to join
our global team.
We offer a host of training opportunities
including an e-learning platform that
holds over 700 courses, and place high
potential individuals on succession plans.
Product safety and quality
For Rank, our focus on product safety and
quality means ensuring fairness of play.
Customers are not going to play on
machines if they are not fair. Failing to
ensure product safety and quality can also
have regulatory consequences. Rank is
required to source its gambling equipment
and software for its UK-based casinos, bingo
venues and online sites from companies
licensed by the Commission. We ensure
that our physical and digital games are
compliant with regulatory requirements
including, but not limited to, speed of play,
random number generation, product
performance, and return-to-player rate.
Ethical marketing
When advertising our products, our sole
intention is to reach our intended audience,
to enable those who are permitted to
gamble with us to know about our products
and offers and decide if they wish to play
with us. We consider the appropriate level
of marketing to deliver to our existing
customers and the means by which it
is delivered, taking a tailored approach
rather than producing a high volume of
communications. We also follow strict
processes to prevent marketing
communications from being received
by vulnerable groups or persons who have
self-excluded. We are constantly evaluating
the content of our messaging, ensuring
that it aligns with our values as a business
and our approach to safer gambling.
Health and safety
While physical health and safety risk is
not the most material issue in our wider
industry, we treat the health and safety
of our customers and colleagues as high
priority and are committed to achieving
the highest level of standards and ongoing
improvement across the Group.
The General Managers of each of our
venues are responsible for ensuring that
their respective venue’s operations meet
the requisite standards and a check and
balance is provided in the UK by the
dedicated health and safety team
conducting regular health and safety
assessments for each venue. Results are
circulated to the venues leadership team,
completion of resulting actions is
monitored and any significant issues are
escalated and followed up by management
teams, with the assistance of specialist
external consultants where needed.
Colleagues
In order to deliver an exciting and
entertaining experience, we require
a workforce of engaged, motivated and
skilled employees. As such we are
committed to providing training and
support to our colleagues, and that they
are given the opportunity to develop and
progress through the Group whilst
themselves experiencing a safe and
fun working environment.
Leadership capability
Our Board and Executive Committee
members are required to lead from the front
to drive the business forwards and deliver
on the long-term strategy. We make sure
that all our leaders have the appropriate
knowledge and skills to deliver against
Rank’s objectives and we employ succession
planning to ensure the continuity of
capability in key roles. We offer executive
coaching and leadership courses, and
succession plans are maintained for the
Board, Executive Committee and other
senior leadership positions.
Employee training and development
Mandatory training
All employees must complete compliance
training to make sure that every individual
in the Group is aware of the expectations
for professional behaviour and we
maintain the highest standards in
business ethics. This includes GDPR,
anti-money laundering, anti-bribery, and
health and safety training, as well as other
training specific for the different areas of
the business, which is provided through
our e-learning platform or in-person.
Colleagues are also made aware, on an
ongoing basis, of Speaking Up, the Group’s
whistleblowing programme. To establish
strong awareness across the Group, every
individual at Rank must also complete
mandatory safer gambling training, with
progress being monitored through our
online platform.
In relation to business ethics, we
endeavour to conduct our business with
integrity and adopt values and standards
designed to help guide our colleagues in
their conduct and business relationships.
In addition to training, Rank has in place
policies, procedures, management
systems and internal controls to prevent
bribery and corruption occurring. This
includes a requirement that all colleagues
and other individuals working for us
adhere to our gifts and hospitality policy,
which requires them to consider the
appropriateness of the giving and
receiving of gifts and hospitality and is
reinforced by ratcheting approval levels.
59
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
Employee
engagement
and wellbeing
Our industry is a truly exciting one in
which to operate. This resonates across
the Group, with colleagues valuing the
interesting nature of our business and
the skilled roles we provide. Our business
strategy is also well communicated to
ensure that everyone understands and
is working towards the same goals.
Rank’s culture is defined by its
established values – service, teamwork,
ambition, responsibility and solutions
(STARS) – and its purpose. From the
point of recruitment, all colleagues are
made aware of our values and these are
incorporated into many development
initiatives to ensure they are at the heart
of a successful career at Rank. To ensure
our workforce remains connected and
motivated, we operate a number of
initiatives to facilitate engagement with
colleagues, to allow feedback and the
articulation of any issues, and for business
communications from the Executive.
We have also put increased focus upon
mental health and wellbeing this year,
providing a number of resources and
events for colleagues to access and attend,
to ensure that everyone is getting the
support they need.
60
Above:
Mecca Luton
The Rank Group PlcAnnual Report 2022 At a glance
Male:female split of total Group
Gender pay gap
Board
Senior management
Whole Group
Male
5
51
Female
3
19
3,952 3,618
Mean
Median
30.3%
30.0%
% of UK employees are White British % of colleagues by age band
White British 68%
Other 32%
<30 30%
30-50 46%
>50 24%
% of employees who are part-time
% of colleagues by country
UK
Spain
Mauritius
South Africa
Gibraltar
Malta
Israel
87%
7%
4%
1%
1%
<1%
<1%
Part-time 39%
Full-time 61%
Equality, diversity and inclusion
Creating a working environment that
embodies equality, diversity and inclusion
(‘ED&I’) is incredibly important at Rank.
We have four stated aims against which
we have delivered a number of initiatives
in the past year.
1. Create an inclusive environment
which facilitates our colleagues
to develop, be creative and deliver
exceptional service
– We have a variety of family support
policies and this year launched our
Menopause Policy which includes the
offer of financial support for treatment.
– We are continually assessing how we
can improve our approach to ensure all
our colleagues feel supported and heard
in their roles and we will be looking to
publish a new three-year ED&I strategy
before the end of H1 2022/23.
2. Ensure there is a diverse workforce
across all grades
– We have several initiatives in place
to support under-represented groups,
in particular women in senior positions,
and to support them in developing
their careers.
– Our analysis of data and feedback
is essential to track progress, identify
areas for improvement and measure the
impact of initiatives we have delivered.
3. Make inclusion and diversity integral
to how we do business
– To ensure that all colleagues have
a voice, we further embedded our six
ED&I colleague network groups:
Wellbeing; Women; Racial Equality
and Diversity; LGBT+; Families; and
general ED&I (incorporating religious
celebrations).
– Alongside this, we created a calendar
of twelve ED&I events (two for each
group) that aligned with national or
international events and will be
refreshed on an annual basis.
4. Demonstrate leadership on
inclusion and diversity, internally
and externally, positioning Rank
as an ‘employer of choice’
– We support our colleagues with training
and development and operate a High
Performing Sponsorship Programme
(‘HPSP’) that supports the development
of female colleagues.
– We are looking to onboard an external
platform that will enable high
performing colleagues, including those
on the HPSP, to access world-class
coaching and mentoring services.
61
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
Our approach
As a Group, we recognise the importance
of reducing our environmental impact
and ensuring that we are operating as
sustainably as possible. As part of our
ESG strategy, we are currently mapping
out our environmental commitments,
assessing where carbon reduction
measures can be implemented and how
our venues can operate more efficiently.
We are starting to incorporate ESG
considerations into our due diligence
processes, by requesting environmental
policies from suppliers and including
in our Requests for Proposal a
requirement to support the Group’s
environmental agenda.
62
Above:
Support Office, Maidenhead
The Rank Group PlcAnnual Report 2022 Environment
Energy usage
The most significant area of contribution
to the Group’s carbon footprint is our
venues’ energy usage. We are working
with our energy consultants to determine
where reduction opportunities lie and
once the assessment is complete we will
set a target to reflect these findings.
Power capacity review
Our energy consultants, Consultus,
are conducting a power capacity review of
our properties. Of the 41 supplies approved
for capacity reductions, 23 have been
processed, 8 are in a queue to be
processed, and 10 require re-analysis
following confirmation of existing details.
Once the project has concluded, Consultus
will issue a formal review to detail
successful price reduction by venue.
Waste and water management
Rank is working with its suppliers and
providers to assess our use of resources
and evaluate where improvements can
be made.
We are engaged in early stage
conversations with our water provider,
SES, as well as a water efficiency business,
with the objective of reducing water
consumption and surface water impact
on our business.
We have asked our waste provider, Biffa,
to revisit our Waste & Recycling Guide
and update it to reflect our current waste
consumption and subsequently outline
appropriate measures for waste reduction.
Biffa will be creating on site collateral to
instruct employees on waste segregation
and thereby reduce waste to landfill, and
we are considering further measures to
raise awareness for recycling and best
practice in waste management.
Travel and fleet management
The Group is looking at specific areas
where it can reduce its environmental
impact from travel and is working with
consultants to consider a range of carbon
reduction initiatives. As a result of the
pandemic, remote working has changed
our commuting practices. We will be
reviewing our travel policy in order to
ensure it is fit for purpose, and we are also
reviewing options to electrify our fleet.
Climate change and net zero
planning
In line with the ambitions set out in the
Paris Agreement and commitments set out
at the recent COP26 UN Climate Conference,
Rank is considering its roadmap towards
a carbon net zero future.
In tandem with our energy usage
and power capacity review, we will be
developing our carbon reduction strategies
with our operational partners and will
update stakeholders on our progress.
This will be formalised through a net zero
framework and targets and criteria that
involves achieving actual emissions
reduction and neutralisation of any residual
carbon from our operations.
Task Force on Climate-related
Financial Disclosures (‘TCFD’)
Commensurate with the requirement
under Listing Rule (LR 9.8.6) regarding
disclosures to the Task Force on Climate-
related Financial Disclosures, Rank has
developed its reporting framework to take
into account the TCFD recommendations.
We will align our performance and strategy
reporting to the four pillars of the TCFD:
governance, strategy, risk management,
and metrics and targets.
Governance
Board oversight
To enable oversight and governance
of climate-related issues, it is important
that such considerations are made, and
discussions had, by Rank’s leadership. As
such, both the Board and the ESG & Safer
Gambling Committee are informed of
climate-related issues. The Audit Committee
has also been made aware of the climate
change accounting consideration in the
preparation of this year’s Annual Report
and Accounts. While the Group recognises
climate change as a relevant risk and/or
opportunity for the business, that risk is
presently considered low to the business
over the short, medium and long term.
The ESG & Safer Gambling Committee has
responsibility for the oversight of climate
change policy, strategy and operational
oversight, and identifying climate-related
risks and contributing those to the Audit
Committee for review. The Audit Committee
holds responsibility for assessing the
integrity of the ESG & Safer Gambling
Committee’s climate-related risk process
and ensuring that it is in line with risk
management process, as well as climate
change disclosure.
Further, the Group’s Risk Committee plays
a key role in the management of risks to
the business. Further detail on committee
activity can be found within the
Governance Report section of this report.
The Board is kept appraised of progress on
all climate-related matters via the Chair of
ESG & Safer Gambling Committee, and the
Committee is informed by the Carbon
Reduction Working Group.
The Group’s assessment of climate-related
risks and opportunities continues to develop,
and the Board’s consideration of such
issues in FY 2022 reflects both this and the
current understanding of climate change
as being of low risk to Rank at present.
At the direction of the Board, the ESG
& Safer Gambling and Audit Committees
were both tasked with developing a better
appreciation for climate-related risk and
its potential impacts upon the business.
The ESG & Safer Gambling Committee
received a presentation from an ESG
specialist and receives guidance from
advisors on an ongoing basis.
The Board also considered climate-related
issues when reviewing and shaping the
ESG strategy. This strategy was developed
by the ESG & Safer Gambling Committee,
informed by senior leadership across the
business, and endorsed by the Board.
Material in annual budgeting is the
regular investment into our real estate,
and current considerations include
insulation, lighting, and heating, ventilation
and air conditioning (HVAC) control.
Climate-related issues will continue to be
a consideration for the Board in reviewing
and guiding performance objectives,
monitoring and performance.
As the assessment of climate-related issues
matures and integrates more deeply into
the strategic and risk assessment processes
of the business, the business may integrate
greater consideration of climate matters
into other decision-making processes.
63
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
Management oversight
Climate change has the potential to impact
the Group in a myriad of ways. Therefore,
considerations from multiple segments
of the business must feed into Rank’s
assessment of climate-related risks and
opportunities. For the Group’s finances,
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 capital market risks and
requirements; for our Procurement Team,
a key consideration is Scope 3 emissions
management in order to meet net zero
ambitions; and the management of our
property portfolio through improving
efficiencies and decarbonisation is material
in reducing Scope 1 and 2 emissions.
Climate change is presently considered
an emerging risk for the Group. To remain
abreast of climate-related matters,
management are informed by engaging
with all of the Group’s corporate advisors
(ESG, broking, legal and accounting)
through webinars, publications, 1-2-1
training sessions and ongoing discussions.
In addition to advisor engagement,
management monitor climate-related
issues and their materiality on an ongoing
basis. Risk Committee meetings (which
also consider financial risks) are held
monthly; the risk and audit functions work
very closely together; and the risk registers
are reviewed monthly by management and
on a constant basis by each business unit.
Management informs the Board of
climate-related risks and opportunities via
two key channels. Management personnel
submit climate-related information via
board and committee papers; this year,
papers were issued to the Audit Committee
detailing the TCFD recommendations,
climate change accounting considerations.
Management also attend Board and Board
Committee meetings by invitation.
64
Strategy
The Group defines the short, medium, and
long-term time horizons as the following:
– Short – present to 2030
– Medium – 2030 to 2040
– 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
– High – significant investment
required and considered material
risk to the business
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.
During the year, Rank’s accounting team
conducted an assessment of climate-related
matters that may impact the Group’s
financial statements. A summary of each
is included below:
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 should include
significant changes in the technological,
market, economic or legal environment
that have an adverse of 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 should be ensuring that relevant
fair value measurements appropriately
consider the relevant climate-related risk
factors. Climate change can have a
tangible effect on assets and liabilities
now or in the future (e.g. rising water
levels, changing weather patterns,
increased pollution levels etc.).
Summary findings
The Group constantly monitors latest
government legislation on climate-related
matters. As at year end, there is no
legislation in place that will financially
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.
Climate-related risks and
opportunities
The specific climate-related issues that
could have a material financial impact on
Rank have been identified for each time
horizon and included in the Risk Table on
page 65. Climate-related physical risks,
considered with reference to their potential
impact on the financial performance of
the Group as a whole, are being integrated
into our business strategy through the
mitigation activity flowing from the risk
management processes monitored by the
Risk Committee.
Some risks and opportunities are
considered by geography. Flood risk, for
example, is of greater risk in the UK, and
we also consider law dependent on UK or
EU jurisdiction. In terms of opportunity,
the access to renewal energy is greater
in Spain than in the UK.
Climate change does also present some
opportunities. Organisations that shift
their energy usage toward low emission
energy sources could potentially save
on annual energy costs. Furthermore,
innovation and development of new low
emission products and services may
improve a business competitive position
and capitalise on shifting consumer and
producer preferences.
At year end, climate-related risk is not
anticipated to have a material financial
impact on the business and the risk overall
is considered low. Such issues do mean an
adjustment in the Group’s strategy to
accommodate greater recognition of
climate risk, and how this is assessed,
resourced and communicated to
stakeholders. The Board, Executive and
working groups will continue to monitor
all climate-related issues.
The Rank Group PlcAnnual Report 2022 Risk
Transition: Transitioning to a lower-carbon economy may entail extensive policy, legal, technology, and market changes to address
mitigation and adaptation requirements related to climate change.
Timeframe
Short to
medium
Mitigating activities
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.
Assess property portfolio
to determine investment
programmes that make
building more energy
efficient, less carbon
intensive.
Seek to source green
energy.
Define decarbonisation
strategy to remain ahead
of regulation.
Short
Short to
medium
Regular investment.
Short to
medium
Type
Policy and
Legislation
Policy and
Legislation
Policy and
Legislation
Technology
Risk description
That Rank is not
able to respond
to increasingly
stringent
reporting
obligations to
the frequency or
quality required.
That nation states
may introduce
carbon emission
levies, placing
an additional fee
upon energy
consumption
costs.
That new
climate-related
laws or
regulations for
which Rank is
not prepared.
Technology
advances
introducing more
environmentally
friendly
equipment to
replace existing
IT infrastructure.
Potential outcomes
Legal and/or reputational issues, which in turn
drive compliance costs and potentially impact
cost of capital.
Financial impact: low
This may increase Rank’s operating costs.
Financial impact: low to medium
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
Whilst Rank does not rely on carbon intense
assets for value generation it nevertheless uses
IT equipment to fulfil a variety of functions:
1. Gaming machines on playing floors.
Much of this equipment is sourced from the US.
Whilst the US committed to a 2050 net zero target,
any variances in time commitments and energy
efficiency requirements of electrically powered
equipment, between the US market and the
markets we operate in may lead to unexpected
cost implications.
2. Online gaming platform IT infrastructure
and general business/operating IT
infrastructure may suffer a reduction in useful
life driven by major advances in IT energy
efficiency, driving increase in depreciation
and amortisation costs.
65
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
Type
Market
Risk description
Climate induced
changes to
customer
preferences
for leisure.
Market
Supply chain
cost inflation.
Potential outcomes
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.
Mitigating activities
Formalise and
communicate clear
decarbonisation
strategy.
Financial impact: low
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
Timeframe
Long
Medium
Short
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.
Define and communicate
our net zero ambitions.
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
Risk
Physical: Physical risks resulting from climate change can be event driven (acute) or longer-term shifts (chronic) in climate patterns.
Risk description
Extreme weather events like
drought, flooding and storms.
Potential outcomes
Damage to our properties and vehicles which
will incur increased capex and insurance costs.
Mitigating activities
Business continuity
and crisis management
plans in place.
Timeframe
Short to long
Changes in average climate
conditions including rising sea
levels, coastal flooding and
increased average temperatures.
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
Increased operating costs driven by the as 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
66
The Rank Group PlcAnnual Report 2022 Scenario analysis
To evaluate the resiliency of the Group’s approach to climate-related risks and opportunities, we have conducted an analysis for two
different possible scenarios: the rise in global temperature is limited to less than 2 degrees, or the global temperature rises by more
than 2 degrees. The risks and opportunities to the Group under each scenario are presented against short, medium, and long-term
time horizons.
<2-degree scenario
Our less than 2°c scenario assumes that we act responsibly, improve the efficiency of our portfolio working with our landlords,
and reduce 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 and strategy under this scenario, with only a limited and manageable impact on our
operations from physical risks. That said, we consider this threat to be limited in the short term and therefore our strategy resilient
under this scenario. We considered the IEA’s Net Zero Scenario in developing this scenario.
Short term (to 2030)
Risks
Higher transition risks associated
with moving to a low-carbon economy
Medium term (2030 to 2040)
Risks
Continued transition risks
– 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.
– 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.
Long term (beyond 2040)
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 and outweigh transitional risks. Under this scenario our business and strategy remains resilient in
the short term. Further work to define the resilience of our strategy beyond this time horizon is still required.
Short term (to 2030)
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.
Medium term (2030 to 2040)
Risks
Increasing physical risks due to a failure
to adequately transition to a low-carbon
economy
Long term (beyond 2040)
Risks
Increased 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.
– Increase in energy costs.
– Flooding at certain high-risk venues
due to increased sea level.
– Ad-hoc supply chain interruptions.
– Flooding at certain high-risk venues
due to increased sea level.
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.
67
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
Risk Management
To determine the relative significance of
climate-related risks in relation to other
risks, in 2021 we conducted a materiality
assessment. 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
effect of climate-related issues. Currently,
there are existing and emerging regulatory
requirements related to climate change
that are considered a risk by Rank.
As the Group’s appreciation for the
complexities of climate risk has developed,
(that the risks may manifest in a variety
of transitional and physical risks) so it has
evolved its representation of climate risk
within its risk register. As such, climate
risk is included as an emerging risk on the
Company’s risk register. The potential size
and scope of identified climate-related
risks is determined in the same manner
as any risk on the risk register.
The Group’s risk management process
involves an analysis which weights ‘Impact’
against ‘Likelihood’. The financial impact
of risk is defined thus: 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.
Decisions to mitigate, transfer, accept,
or control climate-related risks are made
in the same manner as any risk on the risk
register, as climate risk is included as a
stand-alone 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 are
encouraged to consider climate-related
matters when considering the following
Principal Risks:
1. Taxation (should a carbon price
be introduced)
2. Business continuity planning and
disaster recovery (should any physical
climate-related risks impact the
business or its supply chain – flash
flooding etc.)
3. People (desire to work for an employer
that is committed to net zero etc.)
Over the coming months the Group will
start to consider the spread of physical and
transitional risks on our register. As
previously acknowledged, climate-related
risks are varied and permeate many other
existing risks overseen by the Board.
During the year, we conducted desktop
assessment to review the perceived flood
risks of our UK properties, which
comprises 92% of our portfolio. Using UK
Government and Scottish Environmental
Protection Agency online tools, we
identified the following:
High
Medium
Reservoir
River
risk
Surface
risk
Coastal
risk
12.20% 0.80% 1.60%
17.10% 3.25%
5.70%
SECR report
Objectives of this report
This report has been prepared to support
Rank’s compliance with the Companies
Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 and the
companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon
Report) Regulations 2019.
These pieces of legislation require quoted
companies to report energy consumption
and greenhouse gas emissions arising
from activities for which those companies
are responsible. The report also provides
Rank with an annual review of the Group’s
energy consumption.
Scope Boundaries
An operational control approach has been
used to define the Greenhouse Gas (GHG)
emissions boundary.
For Rank’s mandatory scope, this captures
emissions associated with the operation
of Rank’s sites and company-owned
transport. The ‘full scope’ also includes
the voluntary disclosure of emissions
resulting from electricity transmission
and distribution losses, private vehicles
(used for company business), air travel and
waste disposal. All emissions, mandatory
and voluntary, refer to UK and Spain
operations only.
This information was collected and
reported in line with the methodology set
out in the UK Government’s Environmental
Reporting Guidelines 2019.
Emissions have been calculated using the
2021 conversion factors provided by Defra.
There are no material omissions from the
mandatory Scope 1 and 2 emissions. The
reporting period is July 2021 to June 2022,
as per Rank’s financial accounts.
Metrics & Targets
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 are published as part of
the Group’s obligations to report in line
with Streamlined Energy & Carbon
Reporting (SECR).
Supporting material
An emissions data file has been compiled
according to a specification agreed with
Rank. The data file will be retained by
Consultus International Group (Consultus)
and is available for audit upon request. The
supporting data, as supplied by Rank and
relevant third parties is held by Consultus
and can be made available on request.
Emissions intensity
For purposes of baselining and 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 in 2021/22 was £644.0m,
giving an intensity of 39.2 tCO2e per £m
NGR, 40% lower than last year.
68
The Rank Group PlcAnnual Report 2022
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 was not complete 12-month energy usage data available, flat profile estimation techniques were used to
complete the annual consumption. Transport mileage and/or fuel usage data was provided for company and employee-owned vehicles.
tCO2e emissions were calculated using the appropriate emission factors from the UK Government GHG conversion information and
retained within the organisation’s Data File for reference where required with the exception of Spain which is from the IEA.
Overall Group Position kWh
Emission source
Energy type
Gas
Electricity
Company travel
Total
UK Group Position kWh
Emission source
Energy type
Gas
Electricity
Company travel
Total
* Company travel 2021/22 includes all Scope 1 and Scope 3 data.
Spain Group Position kWh
Emission source
Energy type
Gas
Electricity
Total
* Belgium’s emission data included in overall group position for 2020/21.
GHG Emissions Summary
Energy type
Gas (Scope 1)
Company transport (Scope 1)
Employee transport (Scope 3)
F-Gases (Scope 1)
Electricity (Scope 2)
Transmission & losses (Scope 3)
Air travel (Scope 3)
Waste (Scope 3)
Total
Energy type
Scope 1 (mandatory)
Scope 2 (mandatory)
Mandatory total
Scope 3 (compulsory)
Total
69
2021/22
kWh
63,554,204
61,279,863
3,993,358
128,827,425
2020/21
kWh
54,304,890
47,548,865
2,529,333
104,383,088
% of 2021/22
total
52%
46%
2%
100%
2021/22
kWh
63,110,578
57,120,020
3,993,358
124,223,956
2020/21
kWh
53,356,974
43,524,462
2,529,333
99,410,769
% of 2021/22
total
54%
44%
3%
100%
Change +/-
17%
29%
58%
23%
Change +/-
18%
31%
58%
25%
2021/22
kWh
443,626
4,159,843
4,603,469
2020/21
kWh
293,036
2,845,759
3,138,795
% of 2021/22
total
9%
9l%
100%
Change +/-
51%
46%
47%
2021/22
2020/21
tC02e
11,641
551
206
145
12,897
1,089
198
112
26,840
%
43.4%
2.1%
0.8%
0.5%
48.1%
4.1%
0.7%
0.4%
100%
tC02e
9,946
622
–
50
11,066
–
15
2,368
24,067
2021/22
12,337
12,897
25,235
1,605
26,840
%
41.3%
2.6%
0.0%
0.2%
46.0%
0.0%
0.1%
9.8%
100%
2020/21
10,618
11,066
21,684
2,383
24,067
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our approach to ESG
Continued
Whilst we embrace the recommendations, we recognise that our disclosures are not yet fully consistent with some of 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. All information considered material to our TCFD disclosures are presented within this TCFD section.
Compliance table
TCFD Pillar
Governance
Recommended Disclosures
a. Describe the Board’s oversight of
climate-related risks and opportunities.
Compliance status and future activity
Status: green
Strategy
Risk management
b. Describe management’s role in
assessing and managing climate-related
risks and opportunities.
a. Describe the climate-related risks
and opportunities the organisation
has identified over the short, medium
and long term.
b. Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy,
and financial planning.
c. Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°c or lower
scenario.
a. Describe the organisation’s processes
for identifying and assessing climate-
related risks.
b. Describe the organisation’s processes
for managing climate-related risks.
c. Describe how processes for identifying,
assessing, and managing climate-
related risks are integrated into the
organisation’s overall risk management.
Metrics and targets
a. Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
b. Disclose Scope 1, Scope 2 and, if
appropriate Scope 3 greenhouse gas
(GHG) emissions and the related risks.
c. Describe the targets used by the
organisation to manage climate-related
risks and opportunities and
performance against targets.
Intention: the Board and relevant committees to strengthen
the consideration of climate-related issues when reviewing
and guiding business plans, major capital expenditure and
M&A activity.
Status: green
Intention: the Group is to clarify the mandate of the Carbon
Reduction Working Group and to keep improving mechanisms
for informing managers of climate-related matters.
Status: green
Intention: continue to mature scenario analysis and resilience
testing of risks over the short, medium and long term.
Status: amber
Intention: seek to prioritise the factoring of climate-related
risks and opportunities into investment strategies and financial
planning.
Status: amber
Intention: continue to mature scenario analysis and resilience
testing of risks over the short, medium and long term.
Status: amber
Intention: build greater capacity within the Group to identify
and assess climate related risks.
Status: amber
Intention: whilst each of the transitional and physical risks listed
in the report are deemed low to medium financial risk to the
business in the short term, further research is required to
determine the financial materiality of these risks over the
medium and longer term.
Status: amber
Intention: further resource and consideration to be given to the
management of climate-related risks.
Status: amber
Intention: whilst the Group already reports Scope 1 and 2
emissions, certain Scope 3 emissions are captured and the
business may consider the adoption of an internal carbon price
to measure impact and the potential payback on business plans
and relevant capital investment programmes.
Status: green
Intention: whilst the Group already reports Scope 1 and 2
emissions, certain Scope 3 emissions are captured and it is the
intention of the business in the coming years to set a firm net
zero target, in line with the requirement of the Science Based
Targets Initiative.
Status: red
Intention: to announce decarbonisation targets during the next
financial year.
Green – Disclosure met; Amber – Programme of work underway to meet disclosure; Red – Programme of work yet to start to meet
disclosure.
70
The Rank Group PlcAnnual Report 2022 Our Group-wide charity
partnership: Carers Trust
Since 2014 Rank has been partnered with
Carers Trust, a charity which works to
improve services, support, and recognition
for unpaid carers. During our partnership
so far, the Group has raised £3,193,763.79
for the charity and supported 13,135
carers. In order to take ownership of
a specific project to support the Carers
Trust, we established Rank Cares Grants.
Enabled by the fundraising efforts of our
colleagues across the Group, we give
grants to carers in three areas:
– Carers Essentials Fund – carers can
apply for grants towards the cost of vital
equipment such as washing machines,
cookers, fridge freezers or beds.
– Carers Take Time Out Fund – giving
carers time out from caring to relax, do
something for themselves and recharge
their batteries.
– Carers Skills Fund – enabling carers
to learn new skills to help them with
caring or to return to work.
For a carer to receive a grant, they must
submit an application with one of our 120
network partners around the UK. These
applications are then reviewed by a Grants
Panel. We invite colleagues from around
the business to sit on these panels so that
they can appreciate the impact of our
fundraising and the importance of
supporting carers.
Community
A central role in the community
We have always occupied a central role in
the communities in which we operate, and
our Mecca venues in particular are a social
hub for local people. Playing bingo is a key
form of social interaction for many isolated
and older people and our clubs will
continue to provide this leisure service
for generations to come. The strong ties
we have with local communities influence
our approach in this area: our colleagues
go beyond the expected to support their
customers, we champion charitable
initiatives on a venue-by-venue basis
and advertise employment opportunities
locally, and we chose our Group-wide
charity partner, Carers Trust, on the
basis of its network of carers centres
across the UK that support people doing
vital unpaid work.
Developing our community strategy
As a result of the pandemic, the
understanding of the integral role we play
in communities came into sharper focus.
We made it a priority to keep supporting
our customers even when our venues were
forced to shut during lockdowns. As the
pandemic restrictions eased, we were still
keen to maintain this community focus.
In the longer term, we want to maintain
this momentum and we recognise that our
customers and communities will continue
to need support. While much of our
activity has been driven locally and we
will continue to operate initiatives on a
venue-by-venue basis, we are working
towards formalising a central strategy on
community engagement and support. Our
new Mecca Managing Director will play a
significant role in developing this strategy.
“ This time out
allows me to have
something more
positive to enjoy in
life which in turn
allows me to be
more positive in
my caring role
at home.”
Jackie
Unpaid carer
Below:
City Poker Night
Rank Cares charity fundraiser
71
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our business model
What we do
Stakeholder value created
We have been entertaining Britain since 1937, from our origins
in motion pictures to today’s gaming-based entertainment brands.
Our customers
Our purpose is to work together to create exciting 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.
2,400k
We create value for our 2,400k customers by providing them with
market-leading gaming experiences through our venues, online,
or across both channels.
We are the only Group that offers customers both venue and digital
bingo and casino experiences.
Our people
Venues
– Largest venues casino operator in Great Britain (52 venues).
– Second-largest venues bingo operator in Great Britain
(64 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 140 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.
7,600
7,600 passionate and committed employees.
Our suppliers
1,200
Over 1,200 suppliers, who through meaningful engagement and
collaboration are key in helping us deliver our strategic aims.
Our communities
£300,000
£300,000 charitable donations made to Carers Trust.
Governments
£171.5m
£171.5m 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.
72
The Rank Group PlcAnnual Report 2022 What we need to create value
1
5
2
Evolving our
position as an
entertainment
brand
4
3
1 Customer insights/engagement
Through customer insights drawn from customer research
and data science we can better understand what our current
and potential customers want, ensuring we provide relevant,
exciting and entertaining experiences.
4 Innovation and technology
– Our goal is to offer seamless and instant journeys across
our digital and venue brands which requires innovation
and investment in technology.
– Investment is driven by our strategic priorities and where
2 Strong brand positioning
Rank has a portfolio of brands, which include its three
well-established cross-channel brands, Grosvenor Casinos,
Mecca and Enracha, alongside our 140 digital-only,
proprietary and non-proprietary brands.
3 Player protection
Our three lines of defence model, involving our front-line
colleagues, our compliance team and our internal audit
team, seeks to ensure that we are taking the appropriate
actions to protect our customers.
returns are proven.
5 Inspiring people
– Our people are our key asset. They are the face of our
venues’ brands. Through strong teamwork, regular
training and a dedicated support network our team
members are experts at delivering a customer-focused
experience.
– Our five STARS values are at the core of everything we do.
In delivering these values, we can achieve our purpose
and exceed our strategic goals.
– A comprehensive employee engagement programme
alongside our equality, inclusion and diversity strategy
ensures we have an inclusive and sustainable culture.
Supported by robust governance and financial management
– Strong leadership during the pandemic meant the right decisions were made at the right time.
– 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.
– A strong, disciplined approach to liquidity through careful cash management provided the necessary support
to the balance sheet through the COVID-19 pandemic resulting in a strong position for future investment.
73
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Risk management
Improving our ability to
identify, mitigate, monitor
and review key risks
Our risk management framework
Identify
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
Audit 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.
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.
i
w
e
v
e
R
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.
Specific activities:
Oversees risk management
framework, controls and
processes. Reviews action plans
to manage significant risks.
Reviews Group risk register.
M
i
t
i
g
a
t
e
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.
Monitor
74
T
o
p
-
d
o
w
n
i
d
e
n
t
i
fi
c
a
t
i
o
n
n
o
i
t
a
c
fi
i
t
n
e
d
i
p
u
-
m
o
t
t
o
B
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.
The Rank Group PlcAnnual Report 2022
Principal risks and uncertainties heatmap
Summary Residual Risk
t
c
a
p
m
I
2
4
3
12
5
7
8
10
11
9
6
Likelihood
1 Uncertain trading environment
2 Compliance with gambling laws and regulations
3 Safer gambling
4 People
1
5 Health and safety
6 Taxation
7 Change programmes: Integration, transformation and
technology projects
8 Business continuity planning and disaster recovery
(operational resilience)
9 Data protection and management
10 Cyber resilience
11 Dependency on third parties and supply chain
12 Pandemic
Yearly change
N/A
N/A
information, so as to ensure we are
well-placed to react to the impacts and
opportunities presented by such
regulatory change.
The Group’s assessment of climate-related
risks and opportunities continues to
develop (please see pages 62 to 70 for
more information). However, whilst
climate risk is an emerging risk for the
Group, it is not of itself currently regarded
as a principal risk and the risk itself is
currently considered low. We nevertheless
continue to keep this under review.
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 most significant near-term emerging
risk is the forthcoming proposed changes
to UK gambling regulation with the
Government’s proposed White Paper on
legislative and regulatory reform expected
to be published in the coming months.
Mitigation has taken the form of ongoing
monitoring and risk assessments, ongoing
membership and contribution to trade
associations, and continuing to build
on and maintain relationships with our
stakeholders. We also continue to develop
our plans and consider our strategy,
to the extent possible based on available
75
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview
Risk management
Continued
Principal risk: 1
Uncertain trading environment
Principal risk: 2
Compliance with gambling laws
and regulations
Yearly change – N/A
Yearly change
Principal risk
Recovery from the pandemic is slowed by inflationary
pressures impacting consumers’ discretionary expenditure.
Such pressures influence customer behaviour and can reduce
spend on entertainment and leisure activities such as those
offered by the Group, and propensity to visit our venues.
This could impact our performance and strategic decisions.
Moreover, the sharp rise in energy cost is impacting the
operating margins of our venues businesses and this will be
further impacted if prices continue to increase. 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 and strategic decisions.
Residual risk rating and change in risk impact
New (evolved from ‘Changing Customer Needs (venues)’)
and considered high residual risk.
With the current trading environment, inflationary pressures,
energy prices at record highs, increases in interest rates and
labour shortages post-COVID-19 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:
– 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.
– reviewing 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.
Link to strategy
Pillars 2 and 3
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.
Link to strategy
Pillars 1, 2, 3, and 5
76
The Rank Group PlcAnnual Report 2022 Principal risk: 3
Safer gambling
Principal risk: 4
People
Yearly change – N/A
Yearly change
Principal risk
People are 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 of 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 increasing.
Considered increasing as 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.
Link to strategy
Pillars 1, 2, 3, 4 and 5
Principal risk
Safer 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. Minimising the potential for
our customers to suffer harm from their gambling 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
New as a stand-alone principal risk and considered medium
residual risk.
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.
Link to strategy
Pillars 1 and 5
77
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Risk management
Continued
Principal risk: 5
Health and safety
Principal risk: 6
Taxation
Yearly change
Yearly change
Principal risk
Failure to meet the requirements of the various domestic and
international rules and regulations relating to the health and
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 & Safety and
Group Risk Committees. The Head of Health & 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.
Link to strategy
Pillars 3 and 5
Principal risk
Changes in fiscal regimes in domestic and international
markets can happen at short notice. These changes could
benefit or have an adverse effect 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.
Link to strategy
Pillars 2 and 3
78
The Rank Group PlcAnnual Report 2022 Principal risk: 7
Change programmes: Integration,
transformation and technology projects
Principal risk: 8
Business continuity planning and
disaster recovery (operational resilience)
Yearly change
Yearly change
Principal risk
Key Group projects and programmes could fail to deliver,
resulting in missed market opportunities, 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.
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.
Risk mitigation strategy
The Group ensures that change programmes:
Residual risk rating and change in risk impact
Considered medium residual risk and stable.
– 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.
Link to strategy
Pillars 1, 2 and 3
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.
Link to strategy
Pillars 1, 2, 3 and 5
79
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Risk management
Continued
Principal risk: 9
Data protection and management
Principal risk: 10
Cyber resilience
Yearly change
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.
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.
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.
Link to strategy
Pillars 1, 2 and 3
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 stable.
Due to the programme of work in place and ongoing
monitoring and response to new and emerging attack vectors,
this is considered a stable 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.
Link to strategy
Pillars 1, 2 and 3
80
The Rank Group PlcAnnual Report 2022 Principal risk: 11
Dependency on third parties
and supply chain
Principal risk: 12
Pandemic
Yearly change
Yearly change
Principal risk
The Group is dependent on a number of third-party suppliers
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.
Link to strategy
Pillars 1, 2, 3, 4 and 5
Principal risk
All restrictions have been lifted since August 2021 in the UK.
However, as a result of the severe impact that COVID-19 had
on the business, the rate of its recovery since the venues
reopened and restrictions were lifted (including the rate
of return of customers, particularly from overseas), and the
residual risk that restrictions could be reintroduced, or
customers may elect to reduce their social contacts if cases
were to increase, we continue to take a cautious approach
to the reduction of risk at this time.
Residual risk rating and change in risk impact
Considered low residual risk but decreasing.
The risk of re-introduction of restrictions at short notice has to
be balanced with the reassurances provided by the success of
vaccination programmes and no social distancing measures
having been in place in the UK for over twelve months. Further
to this, the risk is regarded as low and continuing to decrease.
Risk mitigation strategy
The Group continues to monitor the risk in each jurisdiction
in which it has venues or offices. The health and safety of our
colleagues and customers remains of paramount importance
and risk assessments continue to be an essential part of
ensuring a safety first approach.
We also continue to review our crisis management and
business continuity plans on a lessons learnt basis and
to ensure that they remain up-to-date.
Link to strategy
Pillars 1, 2, 3, 4 and 5
81
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Compliance statements
Going concern and viability statement
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 16 to 25,
including the budget for 2022/23
(‘the base case’), the five-year business
plan for the Group, and recent trading
performance, and have reviewed the
Group’s projected compliance with its
banking covenants and access to funding
options for the 12 months ending
31 August 2023 for the going concern
period and for the three years ending
August 2025 for the viability assessment.
The Directors recognise that there is
uncertainty at this time caused by the
slower than anticipated return of customers
to UK land-based leisure entertainment
venues, the impact of current geopolitical
influences on consumer sentiment and
disposable incomes, increase in inflation
rates and the overall impact on consumer
demand. The Directors note that this has
had an impact on the accuracy of budgeting
and forecasting in the 2021/22 financial
year, and with trading being weaker than
anticipated upon the reopening of venues,
this has been considered by management
when setting the base case for the 2022/23
financial year.
The Directors have reviewed and
challenged management’s assumptions on
the Group’s base case. Key considerations
are the assumptions on the levels of
customer visits in the venues businesses,
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
a pay rise is awarded in April 2023;
– Rent due during the 2022/23 financial
year is paid on time;
– All tax and duty is paid on time;
– Capital expenditure is in line with
strategic plans; and
– Standard payment terms are assumed
for supplier payments.
Allowance is made for one-off costs
associated with implementation of the
Group’s strategic plan.
The base case 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.
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:
– Term loan of £78.8m which reduces to
£44.4m in May 2023 due to a scheduled
loan repayment; and
– Revolving credit facilities (‘RCF’) of
£80.0m, reducing to £55.0m in July 2023.
At the date of approval of the consolidated
and Company financial statements, the
term loan was £78.8m and the £80.0m
RCF was undrawn.
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 at December 2022 and June
2023 and has available cash to meet
liabilities as they fall due.
Sensitivity analysis
The base case plan reflects the Directors’
best estimate of the future prospects of the
business. 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 potential impact on the Group of a
combination of scenarios over and above
those included in the base case plan has
also been tested. The two downside
scenarios modelled are:
(i) customer/depositor numbers and/or
average spend per visit are below base
case expectations, offset by direct cost
mitigations, and
(ii) as for scenario (i), but taking the
revenue decline across the Group further
to reflect more recent performance in the
last quarter of the 2021/22 financial year,
along with a 5% inflationary impact on the
variable cost base, in addition to the 8%
already included in the base case, to
reflect additional impact on underlying
costs due to geopolitical influences and
pressures on consumers disposable
incomes, offset by reduction in
controllable operating cost.
Having modelled the downside scenarios,
the indication is that the Group would
continue to meet its Covenants in both
cases and have available cash to meet
liabilities.
Accordingly, the Directors have a
reasonable expectation that the Group
has adequate resources to continue in
operational existence for a period at least
through 31 August 2023. 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 2023. 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 two
downside scenarios which reflect a reduced
trading performance and inflationary
impacts on the cost base. In these events,
the Group will generate sufficient cash to
meet its liabilities as they fall due and
meet covenant requirements for the period
to 31 August 2023.
82
The Rank Group PlcAnnual Report 2022 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 2025. 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. This 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 2025.
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 budget for FY23 used for the
going concern assessment, and the
strategic plan approved by the Board.
– The Group continues to have access
to its existing RCF, following the expiry
of £25.0m RCF in the going concern
period, with the remainder having
maturity dates in 2024, and that the
Group is able to arrange new RCF at
a level required as existing facilities
mature.
– The Group repays £78.8m of debt
financing on time in the plan period.
The Directors have also considered the
potential outcome from the Government’s
review of the Gambling Act 2005, which
based on the information available and
their understanding at the date of this
statement, is anticipated to have a 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 74 to 81. The risks considered
include (without limitation): uncertain
trading environment, changes to
regulation (including gambling laws
and regulations), people, safer gambling,
health and safety, tax 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 are set out
above on page 82.
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
Environmental matters
Employees
Human Rights
Social Matters
Anti-corruption and anti-bribery
Some of our relevant policies
– Health and safety policy
– Whistleblowing policy
– Code of conduct
– Modern slavery statement
– Health and safety policy
– Code of conduct
– Whistleblowing policy
– Anti-corruption and bribery,
gifts and hospitality policy
– Code of conduct
– Whistleblowing policy
– Anti-money laundering policy
Where to find more in the Annual Report
– Environment
– Colleagues
– Diversity & Inclusion
– Equal opportunities
– Customers
– Stakeholder engagement
– Human rights
– Customers
– Colleagues
– Communities
– Colleagues
– Audit Committee
Pages
62 to 70
59 to 61 and 36
39
35 to 37, 55 to 61 and 71
36, 59 to 61 and
108 to 109
Business model
Principal risks and uncertainties
– Our business model
– Description of risk processes,
72 to 73
74 to 81
Non-financial key performance
indicators
risk management, risk
governance
– Our key performance indicators
– Our strategy
– Our ESG strategy
– Our external environment
40 to 51, 52 to 53 and
54 to 71
83
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview
Alternative Performance Measures
The following table explains the key APMs applied by the Group and referred to in these
statements:
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.
APM
Underlying
like-for-like
(‘LFL’) net
gaming revenue
(‘NGR’)
Underlying
operating
profit/(loss)
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.
Underlying
profit/loss
before taxation
Underlying
profit/(loss)
after taxation
Underlying
earnings/(loss)
per share
Free cash flow
Closest equivalent
IFRS measure
NGR
Purpose
Revenue
measure
Profit
measure
Operating
profit/(loss)
Profit
measure
Profit/(loss)
before tax
Profit
measure
Profit/(loss)
after tax
Profit
measure
Cash
measure
Earnings/
(loss) per
share
Net cash
generated
from
operating
activities
Adjustments to reconcile to primary
financial statements
– Separately disclosed items
– Excludes contribution from
any venue openings, closures,
disposals, acquired businesses
and discontinued operations
– Foreign exchange movements
– Separately disclosed items
– Excludes contribution from
any venue openings, closures,
disposals, acquired businesses
and discontinued operations
– Foreign exchange movements
– Separately disclosed items
– Separately disclosed items
– Separately disclosed items
– Lease principal repayments
– Cash flow in relation to SDIs
– Cash capital expenditure
– Net interest and tax payments
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.
84
The tables below reconcile the underlying performance measures to the reported
measures of the continuing operations of the Group.
Underlying LFL net gaming revenue (NGR)
Closed/disposed venues
Foreign exchange (‘FX’)
Underlying NGR – continuing operations
Calculation of comparative underlying LFL NGR
Reported underlying LFL NGR
Reversal of Stride (acquired business)
Reversal of 2020/21 closed venues
2021/22 closed venues
2021/22 FX
Restated underlying LFL NGR
LFL underlying operating profit/(loss)
Opened, closed and disposed venues
Underlying operating profit/(loss)
– continuing operations
Separately disclosed items
Operating profit/(loss) – continuing operations
2021/22
£m
644.0
–
–
644.0
2021/22
£m
40.4
(0.6)
39.8
42.3
82.1
2020/21
£m
325.3
2.5
1.8
329.6
2020/21
288.2
41.1
0.3
(2.5)
(1.8)
325.3
2020/21
£m
(82.4)
(2.1)
(84.5)
(8.4)
(92.9)
The Rank Group PlcAnnual Report 2022 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 performance.
The adjustment helps users of the accounts
better assess the underlying performance
of the Group, helps align to the APMs used
to run the business and still maintains
clarity to the statutory reported numbers.
The following provides the rationale for
treating these items as SDIs.
Further details of the SDIs can be found
in the Financial Review and note 4 of the
Financial Statements.
2. Contribution from any venue
openings, closures, disposals,
acquired businesses and
discontinued operations
In the prior period (2020/21), the Group
closed five 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.
Calculation of comparative underlying LFL operating profit
Reported underlying LFL reported operating loss pre IFRS 16
Reversal of Stride (acquired business)
Opened and closed venues
2021/22 closed venues
2021/22 FX
Underlying LFL operating profit
Underlying current tax (charge)/credit
Tax on separately disclosed items
Deferred tax
Tax (charge)/credit
Underlying EPS
Separately disclosed items
Reported EPS
2021/22
£m
(9.6)
(10.5)
3.2
(16.9)
2021/22
Pence
4.3p
9.9p
14.2p
Calculation of Calendar Year 2019 (CY 2019) comparative
Add:
12 months to
30 June
2019
Less:
six months to
31 December
2018
Add:
six months to
31 December
2019
LFL
adjustments1
2020/21
£m
(67.0)
(16.4)
(1.1)
2.0
0.1
(82.4)
2020/21
£m
8.0
0.3
2.1
10.4
2020/21
Pence
(20.1)p
3.6p
(16.5)p
Calendar Year
2019
NGR:
Grosvenor venues
Mecca venues
Enracha avenues
Digital
Group
Operating profit:
Grosvenor venues
Mecca venues
Enracha venues2
Digital
Less Central costs
Group
338.2
193.5
44.9
118.5
695.1
44.9
28.6
9.3
20.7
(31.0)
72.5
(172.1)
(96.2)
(22.6)
(57.3)
(348.2)
(19.4)
(11.4)
(4.1)
(11.0)
15.6
(30.3)
198.1
91.9
24.2
83.2
397.4
48.1
13.7
5.3
11.9
(19.2)
59.8
(0.1)
(13.5)
(14.9)
(0.4)
(28.9)
1.8
2.1
(3.0)
1.3
–
2.2
364.1
175.7
31.6
144.0
715.4
75.4
33.0
7.5
22.9
(34.6)
104.2
1. Like-for-like removes the impact of club openings, closures, acquired businesses, foreign exchange
movements and discontinued operations.
2. Enracha venues Blankenberge casino disposal on 1 April 2021.
85
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 86
The Rank Group PlcAnnual Report 2022 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.
88 Chair’s introduction to governance
91 2018 Code Compliance Statement
92 How we are governed
94 Our Board
98 How governance supports delivery
– A year in review
100 Nominations Committee Report
107 Audit Committee Report
114 ESG & Safer Gambling Committee
Report
118 Finance Committee Report
120 Remuneration Committee Report
123 Remuneration Policy
131 Annual Report on Remuneration
143 Directors’ Report
147 Directors’ Responsibilities
Above:
Jonathan Plumb, Karen Whitworth
and Richard Harris
Learn more about
our governance
structure at
www.rank.com/en/
about-us/corporate-
governance
87
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Chair’s introduction to governance
The Board has a clear
commitment to robust
corporate governance.
We believe that good
governance leads to
stronger value creation
and reduces risk for
shareholders and indeed
all our stakeholders.
Alex Thursby
Chair
Dear shareholders
I am pleased to present this year’s
Directors’ and Corporate Governance
Report. The Board has a clear commitment
to robust corporate governance and we
believe that good governance leads to
stronger value creation and reduces risk
for shareholders and indeed 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.
ESG and safer gambling
I am particularly pleased that this financial
year we cemented our commitment to ESG,
refreshing our Group purpose and strategic
pillars to ensure that sustainability is
clearly identified as being at the core of
what we do and publishing our first full
sustainability report. The Board is
unanimous in its view that this will enable
us to create an even more successful
business. We are comfortable that the work
undertaken to date provides us with a clear
framework within which we can focus on
the issues that matter most to us and our
stakeholders. As a further demonstration
of ESG sitting at the heart of our strategy,
we have incorporated ESG metrics into
Executive Director remuneration and
during the forthcoming year will continue
to expand on our approach to ensure
ongoing alignment between shareholder
and management interests in this regard.
88
The Rank Group PlcAnnual Report 2022 With safer gambling being our primary
ESG focus area, we continue to place
additional emphasis on our response
to the risk of gambling-related harm and
promoting a safer gambling culture.
It remains of the utmost importance to
us that whilst providing an exciting and
entertaining experience to our customers,
they maintain trust in our brands and feel
safe. Ongoing regulatory developments,
and in particular the review of gambling
legislation in the UK, will mean that the
pace of delivery only continues to
accelerate, and the Board is committed
to ensuring that Rank is proactive and
innovative in its approach.
Developing our relationships
with stakeholders
Stakeholder engagement enables us
to better understand what matters most
to those persons with an interest in our
business, consider all relevant factors and
select the best course of action for long-
term business success. 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
during the year are:
– Colleagues: visits to our venues and
offices to engage with colleagues
first-hand in their place of work
– Regulators: corresponded and
participated in meetings with regulators
specifically focused towards Board
Directors
– Shareholders: held more than 40
meetings during the course of the year
with our shareholders
More information about our stakeholder
engagement is set out on pages 35 to 39
of this report.
Culture
We seek to apply corporate governance
guidelines in a way that is beneficial to our
business, consistent with our culture and
true to our shared values. In last year’s
report, we reaffirmed our commitment
to Rank’s established values – service,
teamwork, ambition, responsibility and
solutions – which we know continue to
resonate strongly with colleagues. Our
Board and the leaders in our business are
accountable for role modelling our values,
and we take care to ensure that we recruit
and appraise individuals against them in
order to protect and enhance our culture.
The Board regularly monitors the culture
of the business in a number of ways.
During the year, this included:
– Interaction with Executives, members of
the leadership team, and other colleagues
in Board meetings and on visits to
offices and venues
– Regular reports from the Executive
Committee, particularly the Chief
Executive and the Human Resources
Director, on culture-related matters,
including feedback from employee
opinion survey results and actions
arising from such feedback
– Update reports following various
employee forums held during the year
from the Human Resources Director and
designated Non-Executive Director,
Steven Esom, in respect of workforce
engagement
Board changes
There have been a number of changes
to the Board during the 2021/22 financial
year. We were delighted to appoint Richard
Harris as Chief Financial Officer, following
the departure of Bill Floydd at the end of
2021. Richard joined us in May 2022 from
Foxtons where he had helped navigate the
business through the financial impact of
the pandemic, led a broad range of M&A
activities, and delivered significant cost
improvement across the business. In
addition, Lucinda Charles-Jones joined the
Board as an independent Non-Executive
Director in June 2022. Lucinda brings
a wealth of people and remuneration
expertise to the Board, together with wider
corporate responsibility experience and
will undoubtedly add value as we seek to
embed further ESG within our corporate
strategy. Further detail of the process for
these appointments is set out on pages
102 to 103.
During the year in addition to Bill Floydd’s
departure, Susan Hooper and Chris Bell
stepped down from the Board. I would like
to take this additional opportunity to thank
them for their respective considerable
contributions to Rank, in each case for
over six years as independent Non-
Executive Directors.
Board effectiveness and composition
The Board considers evaluation to be an
essential check and balance on whether its
composition, focus and approach is in line
with the Company’s overall goals. During
the year, we engaged Lintstock Limited
to undertake an external review and I am
pleased to report that the output of this
work was that the Board and its Committees
are operating efficiently and productively.
More details of the evaluation process can
be found on page 104.
89
Our broad range of Board talent covers
a variety of skills and our diverse group
of Non-Executive Directors continue to
bring much experience and challenge
to the Board, enhanced by this year’s
appointments (as set out above). 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 delivering
into the future.
The year ahead
The Board remains conscious of the
ongoing need for good governance and
I am reassured that our framework is
strong and effective. The past year has
been challenging in particular for our
UK venues businesses as we recover from
the impact of the COVID-19 pandemic.
The resilience shown by colleagues is
admirable and I would like to take this
opportunity to pay tribute, on behalf
of the Board, to all our colleagues in the
business for their continued drive and
commitment and to my fellow Directors
for the valued contribution.
As we look ahead to the coming year, the
publication of the UK Government’s White
Paper for gambling reform will be a key
milestone for Rank and for the wider
industry. We have been engaging openly
and proactively with all aspects of the
process and are hopeful that it will create
the highest possible regulatory standards
in a proportionate manner, presenting
opportunities for sustainable growth
alongside additional safeguarding
measures.
We go into the year ahead with renewed
confidence in our strategic plans and in
the knowledge that the Company is led by
a highly competent and professional team.
I look forward to the support of our
shareholders as the business continues
its recovery journey and takes advantage
of the opportunities that lie ahead. I look
forward to engaging with you further at
this year’s Annual General Meeting on
Thursday 13 October 2022.
Alex Thursby
Chair
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Board in action – at a glance
Throughout the year, the Board maintained
its focus on recovery and future growth.
It also remained keen to retain its focus on
adopting a truly customer-centric approach
to its decision-making, whilst developing
its sustainability agenda. This is reflected
in the Board’s activities for the year, which
focused in particular on strategic plans and
investments aligned to growth initiatives.
Strategy day
It is incumbent on the Board
to ensure that the purpose and
strategic direction of the Company
remain appropriate. A key outcome
from this year’s Board strategy day
was the approval of a refreshed
purpose and strategic pillars.
See page 98 for more information.
Capital
investment
With an emphasis on its purpose
– to excite and to entertain – the Board
focused on initiatives to drive
improvements in the key areas of venue
redevelopment and technology. In doing
so, it ensured that the views of key
stakeholders were considered as part
of planning processes, as well as the
impact of anticipated regulatory change.
See page 99 for more information.
ESG
The Board challenged the
business to develop an ESG
strategy that would place
sustainability at the heart of
decision-making and embed
ESG within Rank’s culture.
See page 99 for more
information.
Learn more about
our Board in action
on pages 98-99
90
Above left:
Grosvenor Glasgow Merchant City
Above top:
Katie McAlister, Karen Whitworth
and Alex Thursby
Above bottom:
Support Office, Maidenhead
Above middle:
Katie McAlister and Alex Thursby
The Rank Group PlcAnnual Report 2022 2018 Code Compliance Statement
The Board remains committed to
maintaining the highest standards of
corporate governance across the Group,
recognising the importance of a strong
governance framework to underpin our
strategic objectives. I am pleased to report
that, 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.
Whilst pension contribution rates for
newly appointed Executive Directors will
be aligned with the wider workforce on
appointment (as has been the case in
respect of Richard Harris’ appointment),
the pension contribution rate for John
O’Reilly will be aligned with the rate
available to the majority of the wider
workforce (currently 3%) from 1 January
2023. Further information is available
on page 132.
How we comply with the UK Corporate Governance Code 2018
More information on pages
1 Board leadership and company purpose
A Effective and entrepreneurial Board that promotes
95 to 96
long-term sustainable success
B Purpose, strategy, values and culture
C Governance framework and Board resources
D Stakeholder engagement
E Workforce policies and practices
2 Division of responsibilities
F Board roles
G Independence
H External commitments and conflicts of interests
I
Board efficiency and key activities
Appointments to the Board
3 Composition, succession and evaluation
J
K Board skills, experience and knowledge
L Annual Board evaluation
36, 40 to 64, 72, 73, 89,
92 and 115
92, 98 to 99, and 111
35 to 39
59 to 61
93
94
93 and 95 to 96
98 to 99 and 104 to 105
95 to 96
94 to 96 and 104
104 to 105
4 Audit, risk and internal control
M Financial reporting
External auditors and internal audit
N Fair, balanced and understandable – 2022 Annual Report
review
O Internal financial controls
Risk management
5 Remuneration
P
Linking remuneration with purpose and strategy
(please see comments above in regard to pension
contribution rates)
Q Remuneration policy
R Performance outcomes
109 to 111
109 to 111
109
108 to 109
74
132 to 139
123 to 130
133 to 134
The 2018 Code can be found on the Financial Reporting Council’s website www.frc.org.uk.
91
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview How we are governed
Board leadership, Company purpose and governance structure
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 32 to 34 for more information).
Nominations
Committee
Audit
Committee
Remuneration
Committee
Board Committees
The Nominations
Committee recommends
appointments to the
Board. It oversees
succession planning
for Directors and the
process for succession
planning for the senior
management team. It
ensures that there is an
appropriate mix of skills
and experience on the
Board. The Nominations
Committee promotes
diversity on the Board
and across the Group.
The Audit Committee
oversees the Group’s
financial reporting
and monitors the
independence of
internal and external
audit. It is responsible
for internal controls
and monitors risk
management including
the identification of
emerging risks. The
Audit Committee is
responsible for the
relationship with the
external auditor.
Read more on pages
100 to 106.
Read more on pages
107 to 113.
The Remuneration
Committee is
responsible for
establishing a
Remuneration Policy
and setting the
remuneration for the
Chair of the Board,
Executive Directors and
senior management. It
oversees remuneration
policies and practices
across the Group.
The Remuneration
Committee is
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.
Read more on pages
120 to 142.
Finance
Committee
The Finance Committee
is 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. The Finance
Committee also acts as
the Board’s disclosure
committee for the
purposes of the Market
Abuse Regulation.
Read more on pages
118 to 119.
ESG & Safer
Gambling
Committee
The ESG & Safer
Gambling Committee
is responsible for
assisting the Company
in the formulation and
monitoring of its
environmental, social
and governance
strategy. Reflective
of Rank’s products
and services, the
ESG & Safer Gambling
Committee also 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.
Read more on pages
114 to 117.
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, Group General Counsel & Company Secretary,
the Managing Directors for each of Grosvenor Venues, Mecca Venues, Interactive and International, Group Human Resources
Director, Chief Information Officer, Chief Transformation Officer, Group Transformation Strategy Director,
Chief Innovation Officer and the Director of Investor Relations & Communications.
Three senior management committees, the Risk Committee, the Health and Safety Committee and the Compliance Committee,
support and report to the Audit Committee in order to ensure that the appropriate internal controls for risk management
are implemented and monitored. In addition, 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 74 to 83.
92
The Rank Group PlcAnnual Report 2022 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, a formal process is undertaken
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 and Richard Harris and Lucinda
Charles-Jones, as new Directors appointed
during the year, will stand for election at
the 2022 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.
Board purpose
The Board is responsible for the long-term
success of the Company and its role is to
provide leadership within a structure that
provides for effective controls and enables
risk to be assessed and managed. In
undertaking this role, and with the clear
understanding that 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 92. Each
Committee operates under terms of
reference approved by the Board, which
are reviewed annually and can be found
on the Company’s 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
– Is 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 General Counsel & Company
Secretary. Ensures that Directors receive
accurate, timely and clear information
and that they are fully informed of
relevant matters, so as 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
– Is accountable to the Board for all aspects
of the performance and management
of the Group, including developing
business strategies for Board approval
and achieving timely and effective
implementation while managing risk.
– Is responsible for the day-to-day
operations of the business.
– 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.
– Is 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.
They are required by their role to, amongst
other things, 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 if
shareholders 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.
93
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our Board
Board independence
Skills of the Non-Executive Directors
Chair
Alex Thursby1
Executive
John O’Reilly
Richard Harris
Non-Executive
Steven Esom
Katie McAlister
Chew Seong Aun
Lucinda Charles-Jones
Karen Whitworth
Independent
Appointed
Yes
No
No
Yes
Yes
No
Yes
Yes
August 2017
May 2018
May 2022
March 2016
April 2021
December 2020
June 2022
November 2019
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
1. Alex Thursby was originally appointed to the Board on 1 August 2017
and became Non-Executive Chair with effect from 17 October 2019.
Board tenure
Board gender
h
t
r
o
w
t
i
h
W
n
e
r
a
K
n
u
A
g
n
o
e
S
w
e
h
C
r
e
t
s
i
l
A
c
M
e
i
t
a
K
y
b
s
r
u
h
T
x
e
l
A
m
o
s
E
n
e
v
e
t
S
s
e
n
o
J
-
s
e
l
r
a
h
C
a
d
n
i
c
u
L
Male 5
Female 3
Audit
Committee
Finance
Committee
Nominations
Committee
Remuneration
Committee
ESG &
Safer Gambling
Committee
0-3 years 5
3-6 years 2
6-9 years 1
Committee membership
Alex Thursby
John O’Reilly
Richard Harris
Steven Esom
Katie McAlister
Chew Seong Aun
Lucinda Charles-Jones
Karen Whitworth
Key
Committee member
Committee Chair
94
The Rank Group PlcAnnual Report 2022
Chair
Executive Directors
Non-Executive Directors
Alex Thursby
Chair
John O’Reilly
Chief Executive
Richard Harris
Chief Financial Officer
Karen Whitworth
Senior Independent
Director
Appointment
August 2017¹
Appointment
May 2018
Appointment
May 2022
Appointment
November 2019
Independent on appointment
Non-Independent
Non-Independent
Independent
Ethnicity/Nationality
White/Australian
Ethnicity/Nationality
White/British
Ethnicity/Nationality
White/British
Ethnicity/Nationality
White/British
Age
62
Age
62
Age
39
Age
53
Key strengths
– Broad financial and international
experience, having worked 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.
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.
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 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 was previously a non-
executive director and chair of the
audit committee at Pets at Home Plc.
She 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 commitments
Karen is a non-executive director at
Tritax Big Box REIT plc and Tesco Plc.
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 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.
Key external commitments
None.
Committee membership
Finance Committee
ESG & Safer Gambling Committee
Committee membership
Finance Committee
Committee membership
Audit Committee (Chair)
Nominations Committee
Remuneration Committee
ESG & Safer Gambling Committee
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 held various senior
roles at Australia and New Zealand
Banking Group (ANZ) for five years,
including CEO of the International
Institutional Banking division.
Prior to this, he was with Standard
Chartered Bank for 21 years, where
his roles included head of the
wholesale banking client
relationship in Northeast Asia.
Key external commitments
Alex is chair of the Board of
Governors at Giggleswick School.
Committee membership
Finance Committee (Chair)
Nominations Committee (Chair)
ESG & Safer Gambling Committee
1. Alex was originally appointed to
the Board on 1 August 2017 and
became the Non-Executive Chair
with effect from 17 October 2019.
95
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Our Board
Continued
Non-Executive Directors continued
Lucinda Charles-Jones
Non-Executive Director
Chew Seong Aun
Non-Executive Director
Steven Esom
Non-Executive Director
Katie McAlister
Non-Executive Director
Appointment
June 2022
Appointment
December 2020
Appointment
March 2016
Appointment
April 2021
Independent
Non-Independent
Independent
Independent
Ethnicity/Nationality
White/British
Ethnicity/Nationality
Asian/Malaysian
Ethnicity/Nationality
White/British
Ethnicity/Nationality
White/British
Age
56
Age
57
Age
61
Age
46
Key strengths
– Extensive remuneration and
people experience, both UK
and internationally.
– Experience in strategic
development of environmental
and social aspects of corporate
responsibility.
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.
Key strengths
– A wealth of commercial experience
at consumer-focused, multi-site,
retail businesses.
– Long-standing plc and strategic
experience and shareholder
experience.
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:
Lucinda has more than 25 years’
executive-level experience in human
resources roles. She was chief people
& corporate responsibility officer
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.
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
for over 10 years. He is an ICEAW
qualified Chartered Accountant
(FCA) and member of the Asian
Institute of Chartered Bankers
in Malaysia.
Previous experience:
Steven was chair of the GB Boxing
board from 2013 to 2021, chair of the
British Retail Consortium from 2011
to 2020, the senior independent
director at Cranswick Plc from 2009
to 2018 and a non-executive director
and chair at Carphone Warehouse
from 2005 to 2009. Prior to that,
his retail career included 11 years
at Waitrose between 1995 and 2007,
the last five of which were as
managing director and a period
of time as executive director of food
at Marks & Spencer plc. His earlier
career was spent at Ladbrokes and
Sainsbury’s where he held various
commercial roles.
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 is currently chief marketing
officer for TUI Northern Region
(UK, Ireland and Nordic).
Key external commitments
Lucinda is a non-executive director
on the board of Trustees for Business
in the Community where she also
chairs the remuneration committee.
Committee membership
Nominations Committee
Remuneration Committee
ESG & Safer Gambling Committee
96
Key external commitments
Seong Aun is an executive director
and the group chief financial officer
of Guoco Group Limited (‘Guoco’),
listed in Hong Kong. He is also a
non-executive director of GuocoLand
Limited, (a key subsidiary of Guoco
listed in Singapore) and a non-
executive director of Lam Soon
(Hong Kong) Limited (listed in Hong
Kong), all of which are members of
the Hong Leong Group.
Committee membership
None.
Key external commitments
Steven is a non-executive chair at
Advantage Travel Partnership, chair
at Sedex and chair of the British
Wrestling Association.
Key external commitments
Katie is chief marketing officer for
TUI Northern Region (UK, Ireland
and Nordic) and sits on the TUI
Northern Region Board. She is
responsible for core marketing
disciplines including brand
advertising, digital CRM and
e-commerce for TUI UK and Ireland,
First Choice, Marella Cruises, as well
as sales channels.
Committee membership
Remuneration Committee (Chair)
Nominations Committee
Audit Committee
Committee membership
ESG & Safer Gambling Committee
(Chair)
Remuneration Committee
Audit Committee
The Rank Group PlcAnnual Report 2022 Board and Committee meeting attendance
The Directors’ attendance at formally scheduled Board and Committee meetings during the year is recorded in the table below.
It shows the number of formally scheduled Board and Committee meetings attended by each Director against the number of such
meetings that the relevant Director was eligible to attend as a member.
Director
Chris Bell2
Lucinda Charles-Jones3
Chew Seong Aun
Steven Esom
Bill Floydd4
Richard Harris5
Susan Hooper6
Katie McAlister7
John O’Reilly
Alex Thursby
Karen Whitworth8
Audit
Committee
2/2
Finance
Committee1
Nominations
Committee
2/2
0/0
Remuneration
Committee
2/2
0/0
ESG & Safer
Gambling
Committee
2/2
0/0
4/4
2/2
4/4
2/2
2/2
8/8
8/8
4/4
4/4
3/3
4/4
4/4
0/0
3/3
4/4
4/4
3/3
4/4
4/4
4/4
4/4
Board
4/4
0/0
8/8
8/8
4/4
1/1
5/5
8/8
8/8
8/8
8/8
1. Simon Hay was appointed to the Finance Committee whilst he was interim CFO between 1 January 2022 until 30 April 2022.
2. Chris Bell resigned from the Board on 18 January 2022.
3. Lucinda Charles-Jones was appointed to the Board on 22 June 2022 and to the Nominations, Audit and ESG & Safer Gambling Committees.
4. Bill Floydd resigned from the Board on 31 December 2021.
5. Richard Harris was appointed to the Board on 1 May 2022 and appointed to the Finance Committee.
6. Susan Hooper resigned from the Board on 31 January 2022.
7. Katie McAlister was appointed as ESG & Safer Gambling Committee Chair on 1 February 2022. She was appointed to the Audit Committee on 18 January 2022.
Following a review of Committee composition, Katie stepped down from the Nominations Committee on 21 June 2022.
8. Karen Whitworth was appointed to the Nominations Committee on 21 June 2022.
Company Secretary
Good
governance
enables better
performance
“ Our best-practice
approach to corporate
governance enables
and supports delivery
of our objectives and
plays an important
role in relationships
with our key
stakeholders.”
Luisa Wright
Group General Counsel
& Company Secretary
Luisa Wright
Group General Counsel
& Company Secretary
Appointment
May 2018
Experience
Luisa joined Rank in 2018 as its Group General
Counsel & Company Secretary. Prior to joining
Rank, she held the position of group general
counsel and company secretary at Sportech PLC
for six years, having previously spent ten years at
Olswang LLP, where she specialised in advising
clients in the gambling, sport and media sectors.
97
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview How governance supports delivery
A year in review
Good governance includes
developing a strategy,
selecting and supporting
leadership to deliver that
strategy, and assurance
as to its delivery, all to the
highest standards of safety
and transparency.
Strategy day
In early March 2022, the Board met for its annual strategy review.
This year, the meeting focused on five-year plans for each of
Grosvenor, Mecca, Digital and International. The Board was
also challenged to consider whether the Group’s strategic pillars
remained fit for purpose in light of those plans and its commitment
to embed sustainability within its corporate strategy. It concluded
that the key focus areas of driving the digital business and
evolving venues are still very much the priority, as is developing
our cross-channel offering so as to provide a seamless cross
channel service to our customers that better meets their needs.
The Board considered market trends and competitor analysis.
It discussed Rank’s position within the gambling industry and
the wider leisure industry and reflected on economic conditions
and the outlook as Rank recovers from the impact of the pandemic.
It observed that the strong balance sheet would enable continued
investment in the Transformation 2.0 programme positioning
the Group well for recovery and the impact of the anticipated
gambling regulatory reform.
Presentations were given by senior management from each area
of the business to enable a deeper dive into customer insights,
research findings and how these have influenced the ongoing
development of growth initiatives that fed into each area’s plans.
The Board also reflected on the importance of ongoing investment
into technology, data and the approach to multi-channel delivery
as key drivers in achieving sustainable growth. The Board noted
agreed action plans arising from the day and required that updates
on each area would be provided at its meetings thereafter.
Following the strategy day discussions, in April the Board approved
the revised purpose and strategic pillars, having satisfied itself
that, whilst the overarching purpose of delivering entertaining
and exciting experiences remains unchanged, Rank’s purpose
and the strategic pillars should also clearly reflect our commitment
to ensuring that we meet the needs of all stakeholders in a
sustainable way (see pages 33, 40 to 51 and 55).
Time on Board activities
Business Reviews 17%
Financial 22%
Transformation & Strategy 36%
Governance & Investor Relations 20%
Regulatory & Risk 5%
98
Above:
Board Strategy Day, March 2022
The Rank Group PlcAnnual Report 2022 Capital Investment
Further to approval of the Transformation 2.0 plan, the Board
commenced the 2021/22 financial year focused on initiatives
to drive growth in the key areas of venue redevelopment and
technology. It was keen to ensure that such initiatives considered
customer insights and other stakeholder interests at the project
planning phase, during the development phase and in conducting
reviews and evaluations following delivery. Over the course of
the year, the Board closely monitored progress through regular
updates from senior management and challenged management
to reflect on the decisions being made from a strategic
perspective, particularly following its refresh of the strategic
pillars in April 2022 and in anticipation of the Government’s
review of the Gambling Act 2005.
ESG
During the year, the Board approved new terms of reference for
the renamed ESG & Safer Gambling Committee and welcomed the
appointment of Katie McAlister as its Chair. The Board challenged
the Committee to develop a strategy that would enable
sustainability to be at the heart of all decision-making and embed
ESG within Rank’s culture. The Committee approved the ESG
strategy in January 2022 and the Board ensured that the output
from the Committee’s discussions formed part of its own review
of the Group’s strategic pillars and purpose. It was keen to ensure
that what may be classed as ESG aims were not dealt with
separately and that the corporate strategy fully embeds Rank’s
sustainability focus areas of customers, colleagues, communities
and the environment.
The Board approved publication of the Group’s Responsible
Business Report in January 2022 which set out the initial work
undertaken to establish the Group’s ESG framework. During the
year, it also tasked management to commence development of
Rank’s net zero plan and delegated to its ESG & Safer Gambling
and Audit Committees the approach to be taken to the new
Task Force on Climate-related Financial Disclosures
requirements. The ESG & Safer Gambling Committee also
focused on developing the KPIs and metrics that would underpin
the new ESG strategy. The Board further tasked the Remuneration
Committee with reviewing Executive pay from an ESG perspective
(to complement the existing safer gambling measure), resulting
in a new approach to the bonus scheme for the forthcoming year
(as explained on page 121).
The Board has approved the publication of the Group’s first full
sustainability report alongside this Annual Report.
Venue redevelopment
In line with strategy discussions, the Board reflected on customer
insights work presented by management that informed proposals
for the redevelopment of venues. It challenged management to
ensure that stakeholders were properly considered before, during
and after planning such development work and that it was clear
where each such development sat under the strategy. It also
acknowledged that Rank’s people are a key asset in ensuring
venue refurbishments are a success.
Technology
Throughout the year, the Board regularly discussed the migration
project, to move all digital operations to the RIDE proprietary
platform. It received updates, and challenged management,
on project timelines, costs and synergies and was provided with
presentations on the product and platform development roadmap
and opportunities for growth once the migration is completed.
The Board was pleased to note the successful migration of Mecca
to the RIDE platform in January 2022, and was keen to ensure
that appropriate learnings were considered in preparing for
the Grosvenor migration that will take place before the end
of Q1 2022/23.
During the year, the Board also considered and approved key
technology contracts related to driving forward technological
improvements across the Group.
Above:
Katie McAlister, Karen Whitworth and Richard Harris
Above:
Katie McAlister and Alex Thursby
99
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Role and responsibilities
The Committee is responsible for leading
the process for appointments, ensuring
plans are in place for orderly succession
to both the Board and senior
management positions, and overseeing
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, in order for it to
remain effective and able to operate
in the best interests of shareholders.
– Ensure plans are in place for orderly
succession to positions on the Board
and oversee succession planning for
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 Group
General Counsel & Company Secretary,
who acts as secretary to the Committee.
Key activities during the year
– Recommended the appointment
to the Board of Richard Harris and
Lucinda Charles-Jones.
– Continued to monitor diversity
initiatives under the Inclusion and
Diversity Strategy.
– Reviewed succession plans.
Nominations Committee Report
“The Committee continues to
demonstrate its important role in
succession planning, inclusion &
diversity and proposing new directors
for appointment to the Board in order
to maintain the right balance of
knowledge, skills and attributes.”
Alex Thursby
Chair of the Nominations Committee
Committee membership and attendance
Current members
Alex Thursby (Chair)1
Lucinda Charles-Jones²
Steven Esom
Karen Whitworth³
Other members during the year
Chris Bell⁴
Susan Hooper⁵
Katie McAlister⁶
Appointed to Committee
Attendance
August 2017
June 2022
March 2016
June 2022
July 2015
September 2015
April 2021
4/4
0/0
4/4
0/0
2/2
3/3
4/4
1. Alex Thursby took over as Chair in October 2019.
2. Lucinda Charles-Jones was appointed to the Committee in June 2022.
3. Karen Whitworth was appointed to the Committee in June 2022 following a review of Committee
composition.
4. Chris Bell stepped down from the Committee in January 2022 following his resignation from the Board.
5. Susan Hooper stepped down from the Committee in January 2022 following her resignation from the Board.
6. Katie McAlister stepped down from the Committee in June 2022 following a review of Committee
composition.
Other attendees
Group General Counsel & Company Secretary.
One additional meeting was convened during the year to consider the appointment
of Richard Harris as Chief Financial Officer and to the Board. The Committee also met
separately during the year to discuss matters without the presence of management.
100
The Rank Group PlcAnnual Report 2022
Executive Committee appointments
There were new appointments also to the
Executive Committee this year. Following
search processes conducted by the Chief
Executive and Group Human Resources
Director, with external agency assistance
as appropriate, the Committee noted the
following appointments:
– Managing Director, Grosvenor – Debbie
Husband, who joined Rank in 2017 as
National Operations Director for
Grosvenor, was promoted to Managing
Director, Grosvenor in May 2022. Prior to
joining Rank, Debbie was UK Operations
Director at Travelodge.
– Managing Director, Mecca – Andy Crump
joined the Company in May 2022 as
Managing Director, Mecca. His previous
role was Head of Hospitality Operations
at Marks and Spencer PLC.
– Managing Director, International –
Enric Monton joined Rank in May 2022
as Managing Director, International.
He joined the Company from Cirsa where
he served as Latin America Managing
Director of Sportium, Cirsa’s digital and
sportbook branch.
– Group Transformation and Strategy
Director – Emma Morning, who joined
the Company in October 2019 as
transformation lead, was promoted
to Group Transformation and Strategy
Director in January 2022.
During the year, the Committee also
recommended the appointment of Simon
Hay, the current director of Group finance,
as interim Chief Financial Officer for the
period from 1 January 2022 to 30 April 2022
(commencing on Bill Floydd’s departure
from the business and ending upon
Richard Harris’ appointment).
Board composition
In line with the requirements of the 2018
UK Corporate Governance Code, we spent
considerable time this year looking at
Board composition, reviewing the length
of tenure of Board members and looking
at ways in which Board membership might
be refreshed. Whilst the Committee
considers that the Board has the necessary
mix of skills, knowledge and experience to
fulfil its role effectively, we identified that
there was a succession planning need in
relation to remuneration and people
matters. This led to a process resulting in
the appointment of Lucinda Charles-Jones
as a new independent Non-Executive
Director (as referenced above).
We are satisfied that the Board is well
balanced, providing an appropriate blend
of executive and non-executive skills and a
collective competence to meet the Group’s
current needs and deliver its strategy.
Nevertheless, we continue to evaluate the
skillsets of Board members on an ongoing
basis and build this evaluation into our
Board succession plans.
The composition and chair-ship of the
Board’s Committees were also reviewed
during the year. Following Chris Bell and
Susan Hooper stepping down from the
Board in January 2022, Karen Whitworth
was appointed as Senior Independent
Director and Katie McAlister as Chair
of the ESG & Safer Gambling Committee,
with Katie also appointed to the Audit
Committee. The membership of the
Board’s Committees was revisited again
following the appointment of Lucinda
Charles-Jones in June 2022, with Lucinda
appointed to the Remuneration, Nominations
and ESG & Safer Gambling Committees,
Karen being appointed to the Nominations
Committee and Katie stepping down from
the Nominations Committee. The current
membership of each Committee is set out
on page 94.
The composition of the Executive
Committee was also considered during
the year. I can confirm that the Committee
is satisfied that the Board, its Committees
and the Executive Committee are
appropriately composed.
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.
Dear shareholders
I am pleased to present the Nominations
Committee Report covering the work of the
Committee during the 2021/22 financial
year. It has again been a busy year, with
a number of changes to the Board, its
Committees and to the Executive
Committee. We have continued to focus on
the important areas of succession planning,
our inclusion and diversity strategy and
evaluating the Board’s composition, skills
and experience.
Director appointments
I was delighted to welcome two new
directors to the Board this year.
Appointment of Chief Financial
Officer
Richard Harris was appointed as Chief
Financial Officer, and to the Board, with
effect from 1 May 2022. The search process
leading to his appointment was conducted
by the Chief Executive and Group Human
Resources Director, assisted by external
agency, Odgers Berndtson. The process
that led to Richard’s appointment is set out
in more detail on page 103 and details of
his experience can be found on page 95.
Non-Executive Director appointment
Lucinda Charles-Jones was appointed
as an independent Non-Executive Director
of the Board on 22 June 2022. The search
process that led to her appointment was
conducted by the Chair, assisted by the
Group Human Resources Director and
external agency, Spencer Stuart. The
process that led to Lucinda’s appointment
is set out in more detail on page 102 and
details of Lucinda’s experience can be
found on page 96. Lucinda became a
member of the Remuneration, Nominations
and ESG & Safer Gambling Committees
on her appointment.
Neither of the search agencies used in
connection with these appointments 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 Group General Counsel
& 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, whilst the personalised
induction is devised and tailored to each
new director’s background, experience
and role.
101
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Nominations Committee Report
Continued
Appointment of Lucinda Charles-Jones
as Non-Executive Director
Identifying candidates
The Nominations Committee was
particularly mindful of the need to meet
the skill requirements and independence
criteria. It also wanted to continue to
promote diversity on the Board.
It determined on this occasion to engage
an external headhunter to assist with the
search and following a review of three
executive search firms, Spencer Stuart
was engaged based on their previous
experience in delivering similar roles,
their knowledge and access to diverse
candidates in the marketplace and their
competitive pricing.
Following a detailed briefing on the key
requirements, Spencer Stuart presented
a list of 35 candidates selected from a
diverse pool. The Chair and the Group
Human Resources Director, in
consultation with Spencer Stuart,
assessed candidates against the brief
and shortlisted six candidates to proceed
to the First Stage Assessment.
Establishing role requirements
The Nominations Committee considered
the tenure of the Board Directors during
the year with a particular focus on the
independent Non-Executive Directors.
Following a detailed review of skills and
experience, coupled with Chris Bell and
Susan Hooper’s departures, a search for a
new Non-Executive Director commenced.
The Nominations Committee identified
a desire to appoint a new Non-Executive
Director with remuneration and people
experience, and corporate governance
experience at a FTSE listed company
gained in a consumer-facing business.
It determined it appropriate to do so
during this financial year.
Process
First Stage Assessment
This First Stage Assessment comprised an interview with
the Chair and the ESG & Safer Gambling Committee Chair.
Two candidates progressed to the Second Stage Assessment.
Second Stage Assessment
The Second Stage Assessment comprised interviews with
the other independent Non-Executive Directors.
One candidate progressed to the Final Stage Assessment.
Final Stage Assessment
The Final Stage Assessment comprised interviews with the Chief Executive and
the non-independent Non-Executive Director.
Final Decision
The Chair gathered and assessed the feedback from the assessment process and
recommended to the Nominations Committee Lucinda Charles-Jones as the preferred
candidate. The Nominations Committee concurred with this view, regarding Lucinda
as possessing the desired experience and wider skills to add value to the Board. The
Nominations Committee agreed that the Chair should make a recommendation to the
Board that Lucinda Charles-Jones be appointed. The Board subsequently approved her
appointment and Lucinda was appointed to the Board, and to Rank’s Remuneration,
Nominations and ESG & Safer Gambling Committees on 22 June 2022.
102
Induction process
Lucinda Jones-Charles and Richard
Harris participated in an intensive and
tailored induction programme upon
their respective appointments, which
included the following:
Area and met with:
Governance and investor relations –
met with Chair, Group General Counsel
& Company Secretary and Director
of Investor Relations & Corporate
Communications. Also met with fellow
Board members, brokers and corporate
PR advisors.
Business and strategy – met with Chair,
Chief Executive and each member of the
Executive Committee.
Gambling laws and regulations – met
with Group General Counsel & Company
Secretary, Director of Compliance &
Responsible Gambling, and Director
of Public Affairs.
Finance and risk – met with Director of
Group Finance, Director of Tax, Director
of Analytics, Director of Risk & Internal
Audit, Audit Committee Chair and the
external auditor.
Lucinda Charles-Jones also met with
Richard Harris as the newly appointed
CFO.
Remuneration – met with the Chair,
Remuneration Committee Chair, Director
of Reward, Human Resources Director
and key executives.
Succession planning and inclusion
and diversity – met with the Chair
and Human Resources Director.
ESG – met with the ESG & Safer
Gambling Committee Chair.
Site visits – met with General Managers
and other venues colleagues.
Overview of matters covered:
Approach to corporate governance at
Rank, Board and Committee structure,
investor relations and corporate
communications.
Management structure and operations
across the Group, including marketing,
innovation and omni-channel, IT,
governance and employee interests.
Strategic pillars and Company purpose.
In respect of Richard Harris, a more
detailed introduction to the business
and performance for Mecca, Grosvenor,
Digital and International.
The compliance framework at Rank,
gaming industry regulation, the Group’s
relationships with Governments and
regulators and emerging regulatory
risks and opportunities.
An understanding of the Group’s
financial position and the key risks and
challenges for the Group, particularly
in light of the impact of COVID-19 on
the business and its recovery.
An understanding of the remuneration
policy and remuneration matters at Rank.
Approach to succession planning and
the strategic approach to inclusion
and diversity.
An overview of the Group’s strategy
for ESG and safer gambling and where
Rank is on its ESG journey.
A series of site visits to see the business
in action, which included direct
experience of our customer journeys
and gaming products.
The Rank Group PlcAnnual Report 2022 Induction process
Lucinda Jones-Charles and Richard
Harris participated in an intensive and
tailored induction programme upon
their respective appointments, which
included the following:
Area and met with:
Governance and investor relations –
met with Chair, Group General Counsel
& Company Secretary and Director
of Investor Relations & Corporate
Communications. Also met with fellow
Board members, brokers and corporate
PR advisors.
Business and strategy – met with Chair,
Chief Executive and each member of the
Executive Committee.
Gambling laws and regulations – met
with Group General Counsel & Company
Secretary, Director of Compliance &
Responsible Gambling, and Director
of Public Affairs.
Finance and risk – met with Director of
Group Finance, Director of Tax, Director
of Analytics, Director of Risk & Internal
Audit, Audit Committee Chair and the
external auditor.
Lucinda Charles-Jones also met with
Richard Harris as the newly appointed
CFO.
Remuneration – met with the Chair,
Remuneration Committee Chair, Director
of Reward, Human Resources Director
and key executives.
Succession planning and inclusion
and diversity – met with the Chair
and Human Resources Director.
ESG – met with the ESG & Safer
Gambling Committee Chair.
Site visits – met with General Managers
and other venues colleagues.
Appointment of Richard Harris as Chief Financial Officer
Identifying candidates
The Nominations Committee approved
the engagement of an external
headhunter to assist with the search,
and following a review of three executive
search firms, Odgers Berndston was
engaged based on their previous
experience in delivering similar roles,
their knowledge of the industry, their
access to diverse candidates and their
competitive pricing.
Following a detailed discussion with
Odgers Berndston, a candidate brief was
developed. Their search of candidates
considered those who were already on
publicly listed boards as CFOs or where
there might be a natural step up into a
CFO role. A diverse pool of 88 candidates
was initially identified from both inside
and outside the industry. 50 of the
identified candidates were included
on an initial shortlist, which following
consultation between the Chief
Executive and Group Human Resources
Director with Odgers Berndston was
reduced to 20 to proceed to the First
Stage Assessment.
Establishing role requirements
The Nominations Committee
commenced a recruitment process for a
new Chief Financial Officer following Bill
Floydd’s notice of resignation in August
2021. The Group Human Resources
Director and Chief Executive prepared
the role specification for the search,
which focused on strong strategic,
operational and technical experience,
along with excellent relationship skills.
The specification was approved by
the Committee.
Process
First Stage Assessment
This First Stage Assessment comprised an interview with
the Chief Executive and the Group Human Resources Director.
Two candidates progressed to the Second Stage Assessment.
Second Stage Assessment
The Second Stage Assessment comprised interviews with
the Chair and the Senior Independent Non-Executive Director.
One candidate progressed to the Final Stage Assessment.
Final Stage Assessment
The Final Stage Assessment comprised interviews with all other members
of the Board.
Final Decision
The Chief Executive gathered and assessed the feedback from the assessment process
and discussed his recommendation that Richard Harris be appointed with the Chair
who was in support. The recommendation was presented to the Nominations
Committee, which agreed and confirmed that the Chair should make the
recommendation to the Board. The Remuneration Committee approved the proposed
remuneration package and the Board subsequently approved Richard’s appointment.
He was appointed as Rank’s Chief Financial Officer and to the Board on 1 May 2022.
Overview of matters covered:
Approach to corporate governance at
Rank, Board and Committee structure,
investor relations and corporate
communications.
Management structure and operations
across the Group, including marketing,
innovation and omni-channel, IT,
governance and employee interests.
Strategic pillars and Company purpose.
In respect of Richard Harris, a more
detailed introduction to the business
and performance for Mecca, Grosvenor,
Digital and International.
The compliance framework at Rank,
gaming industry regulation, the Group’s
relationships with Governments and
regulators and emerging regulatory
risks and opportunities.
An understanding of the Group’s
financial position and the key risks and
challenges for the Group, particularly
in light of the impact of COVID-19 on
the business and its recovery.
An understanding of the remuneration
policy and remuneration matters at Rank.
Approach to succession planning and
the strategic approach to inclusion
and diversity.
An overview of the Group’s strategy
for ESG and safer gambling and where
Rank is on its ESG journey.
A series of site visits to see the business
in action, which included direct
experience of our customer journeys
and gaming products.
103
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Nominations Committee Report
Continued
Succession planning
Succession plans are maintained for the
Board, Executive Committee and other
senior leadership positions and were
reviewed by the Committee during the
year. Succession planning for the Chief
Financial Officer turned into a recruitment
process following Bill Floydd’s notice of
resignation in August 2021 and resulted
in the appointment of Richard Harris as
mentioned earlier in this report. During
the year, the Committee also conducted
a detailed review of the succession plan
for the Chief Executive.
The Committee welcomed the notable
examples of succession planning and
diversity in action in the promotion of
Debbie Husband and Emma Morning
to the Executive Committee as set out on
page 101 of this Report. An overview of the
development offered to Debbie leading to
her promotion, from her own perspective,
can be found in our 2022 Sustainability
Report. Other internal senior management
promotions were to the roles of Chief
Operating Officer for Grosvenor (please
see our 2022 Sustainability Report) and
Director of Legal.
Training
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 circumstances. Directors are
invited to identify to the Group General
Counsel & Company Secretary any
additional information, skills and knowledge
enhancements that they require.
During the year, Directors received
monthly reports of current and forecast
trading results and treasury positions.
They also received regular briefings
on the political and regulatory gambling
environment. Directors received corporate
governance updates from the Group
General Counsel & Company Secretary
on matters such as the Financial Reporting
Council (‘FRC’) report on corporate
governance in the UK, the FRC areas
of supervisory focus for 2022/23, Investor
Association expectations for 2023, new
climate-related reporting requirements,
and from the Group’s auditor on matters
such as the BEIS consultation on restoring
trust in audit and corporate governance
and new ISA considerations. Directors also
undertook mandatory Company training
on matters including the Gambling
Commission for Great Britain’s Licensing
Objectives, Equality and Diversity in the
Workplace, the Bribery Act and GDPR.
104
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 this year’s review is set out opposite, together with progress against
last year’s Board actions and outcomes from this year’s evaluation.
Process for 2021/22 review
The evaluation this year was conducted by Lintstock Limited. Lintstock is an
independent advisory firm that specialises in Board evaluations, and provides
no other services to the Group.
The following process was followed for the 2021/22 evaluation:
Stage 1
Decision taken for exercise to be facilitated by Lintstock Limited,
following presentations by potential providers
Stage 2
Evaluation process and questionnaires agreed between Lintstock
and key project sponsors
Stage 3
Evaluation questionnaires completed by Board members
Stage 4
Evaluation findings presented
Stage 5
Improvements and areas of focus identified and agreed for the Board
and each Committee for the forthcoming year
The results and recommendations from the evaluation in respect of the Board and
each Committee were circulated to all Directors, presented to the Board and discussed
at the relevant Committee meetings. The areas of focus for the Board are set out on the
following page and the areas of focus for each Committee are set out in the respective
Committee reports, including on page 106 in respect of this Committee.
During the year, I held one-to-one meetings with all Non-Executive Directors to
discuss their performance, drawing on the results of the 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 utilising feedback from the exercise. The Senior Independent Director
combined responses to the exercise with feedback from separate discussions she held
with the Non-Executive Directors, Executive Directors and the Group General Counsel
& Company Secretary on my performance, before discussing the results with me.
The Rank Group PlcAnnual Report 2022 “ We are satisfied
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
Board progress against 2020/21 actions
During the year, the Board considered its delivery against the areas of particular
focus that had been identified under the 2020/21 evaluation exercise. Overall,
it considered that it had made good progress as follows:
Agreed action areas
1. Strategy
2. Workforce
engagement
3. Managing
talent
4. ESG
Progress made in 2021/22
Management was asked to present a revised five-year strategy
to the Board for approval, which it is noted happened prior to
the 2020/21 year end. Updates as to progress were provided
throughout the year, culminating in a full review and refresh
of the Company’s strategic pillars following its March 2022
strategy day.
The Board discussed data from the annual Employee Opinion
Survey and the ‘Pulse’ survey conducted during the year,
together with reports from the Non-Executive Director
responsible for workforce engagement. There has been a
continued focus on overseeing actions and challenging
management to evaluate their impact.
The Board and Committee meetings in November 2021 took
place in Brighton, enabling time to be spent at Pier Nine and
a series of scheduled Non-Executive Director venue visits took
place in July 2022. This was in addition to other ad hoc venue
visits by Directors throughout the year.
The Board considered that it should conduct a more detailed
review during the year of the overall approach to talent
management. This was undertaken in part, but has been
scheduled for a deeper review during the forthcoming year
following recent Board and senior management changes.
The Board approved a new ESG strategy, the Company’s first
Responsible Business Report in January 2022 setting out an
overview of the initial work taken to develop such strategy and
the first full Sustainability Report published alongside this
Annual Report.
Outcomes from 2021/22 review – Board
Overall, the Directors believed that the Board was functioning well. The areas
for particular focus for the forthcoming year were agreed as follows:
1. Strategy – whilst acknowledging that the main immediate focus has to be on
business recovery, following the review and refresh of the strategic pillars the
Board considered that there needs to be a continued focus on developing the
longer-term strategy, particularly in respect of Mecca venues.
2. Developing the ESG Strategy – there was clear recognition of the significant
progress made in this area during the 2021/22 financial year, but it was also
noted that the next financial year will be important in embedding the strategy
within the business.
3. Managing talent, generally and more specifically from a diversity and
inclusion and remuneration perspective – the Board recognised that this was
a carry forward from the previous financial year, but felt that it was in a stronger
position to undertake this review during 2022/23 following recent Board and
senior management changes.
For more information
on our Board skills,
experience and
tenure, please see
pages 94-96.
105
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Nominations Committee Report
Continued
Board and senior management
diversity
We recognise that to be a successful
Company and achieve our strategic goals,
Rank must be both inclusive and diverse.
Such recognition must be reflected
throughout the organisation, including on
the Board, and I am pleased to report that
women now comprise more than a third of
our Directors and the Board meets the
recommendations of the Parker Report.
The Committee nevertheless noted the new
requirements from the Financial Conduct
Authority that the Board should be looking
to achieve 40% gender diversity and that
at least one senior board position should
be held by a female. The Board meets
the latter requirement, following the
appointment of Karen Whitworth as Senior
Independent Director in January 2022.
As at 30 June 2022, 37.50% of the Board
was female (37.50% at the date of this
report), 30.77% of the Executive Committee
(30.77% as at the date of this report) and
30% of management-level direct reports
to the Executive Committee (30% as at the
date of this report). Further details of the
gender breakdown of Directors, senior
management and the Group can be found
on page 61 of this report. The Committee
is committed to continuing to review its
composition from a diversity perspective,
including working towards meeting the
40% gender target and increasing BAME
representation in senior roles.
In order to ensure that 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 the four aims as set
out on page 61 and in more detail in our
2022 Sustainability Report.
During the year, the Committee also
considered the results of the Employee
Opinion Survey (full in September 2021
and Pulse in May 2022) so far as questions
related to inclusion and diversity and was
pleased to see that the Group-wide
106
3.
Agreed action areas
To focus on the effectiveness, and how
the Committee can further evaluate/
demonstrate the effectiveness, of the
Board and its Committees, it being noted
that an external evaluation will in any
event be conducted during the 2021/22
financial year.
Progress made during 2021/22
The Directors considered that the external
evaluation process conducted by Lintstock
Limited assisted it in reflecting on its
effectiveness during the year. Overall
the performance of the Committee was
highly rated.
Outcomes from 2021/22 review
This year’s Committee evaluation exercise
concluded that the Committee continues to
operate effectively. Having considered the
findings, the Committee agreed that its
focus for the forthcoming year should be:
1. To evaluate the success of previous
succession plans and focus, in
particular, on succession planning for
the Chair and the Executive Committee.
2. 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.
3. To conduct a more in-depth external
evaluation of the Board and its
Committees, involving Director
interviews, once recent changes
in Board composition have settled.
I look forward to meeting shareholders at
the forthcoming AGM, when I will be happy
to answer any questions on this report.
Alex Thursby
Chair of the Nominations Committee
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
As mentioned above, it is incumbent
on the Board to ensure that a formal and
rigorous review of the effectiveness of
the Committee is conducted each year.
Progress against last year’s actions,
as well as the outcomes from this year’s
evaluation, are set out below.
Progress against 2020/21 review
1.
Agreed action areas
To ensure that succession plans for the key
roles of Chief Executive and Chief Financial
Officer continue to develop, alongside plans
for the Chair and other Non-Executive
Directors with longer tenures.
Progress made during 2021/22
During the year there was a detailed
review of the succession plan for the Chief
Executive. Furthermore, a review of Board
skillsets with succession planning in mind
led to the appointment of Lucinda Charles-
Jones as an independent Non-Executive
Director. The succession plan for the
Chief Financial Officer was replaced with
a recruitment process, resulting in the
appointment of Richard Harris.
2.
Agreed action areas
To ensure that there is ongoing challenge
as to progress/achievements against the
inclusion and diversity strategy, with a
particular focus on the Executive
Committee (and to be considered
alongside succession planning for the
Executive Committee) and the impact
of the pandemic on colleagues.
Progress made during 2021/22
The Committee assessed progress of
inclusion and diversity initiatives
throughout the year. The positive increase
in female representation on the Executive
Committee was welcomed, although it was
noted that a pipeline for succession is
required to ensure that the desired levels
are maintained and that further work is
required with regard to ethnic diversity.
The Rank Group PlcAnnual Report 2022
Audit Committee Report
“The Committee continues to
perform 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.”
Karen Whitworth
Chair of the Audit Committee
Committee membership and attendance
Current members
Karen Whitworth (Chair)
Steven Esom
Katie McAlister
Other members during the year
Chris Bell¹
Appointed to Committee
Attendance
November 2019
March 2016
January 2022
4/4
4/4
2/2
June 2015
2/2
1. Chris Bell stepped down from the Committee in January 2022 following his resignation from the Board.
Other attendees
Chief Executive
Chief Financial Officer
Board Chair
Group General Counsel & Company Secretary
Director of Internal Audit
External Auditor
The Committee met separately during the year to discuss matters without management
present. The external auditor and the Director of Internal Audit were provided the
opportunity at each meeting to discuss matters without the presence of management.
107
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 financial
statements and any announcements
relating to financial performance.
– Reviewing and challenging key
accounting judgements and narrative
disclosures.
– Monitoring internal control and
risk management processes.
– Performing a robust assessment
of the Company’s principal and
emerging risks.
– Monitoring and reviewing the
effectiveness of the internal audit
function, ensuring that it is able to
exercise independent judgement.
– Considering the appointment of
the external auditor, their reports,
performance, effectiveness and
independence.
– Agreeing the external auditor’s terms
of engagement and the appropriateness
of the audit fee.
The formal terms of reference of the
Committee are available at www.rank.com
or by written request to the Group
General Counsel & Company Secretary,
who acts as secretary to the Committee.
Key activities during the year
– Re-assessed ongoing and emerging
risks as the Company continues its
recovery from the impact of the
COVID-19 pandemic.
– Considered approach to impairment
review and resulting impairment and
reversals of impairment.
– Discussed the proposed disclosures
and assurance programme to enable
the Group to report against the
Task Force on Climate-related
Financial Disclosures requirements.
– Considered the BEIS consultation
on ‘Restoring Trust in Audit and
Corporate Governance’ and its
potential impact on the Group.
– Conducted a deepdive into cyber
and information security.
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview During the year, the Committee discussed
and approved the proposed disclosures
and assurance programme to enable the
Group to report against the Task Force on
Climate-related Financial Disclosures
requirements for the first time, as
described on pages 63 to 70.
We also considered the BEIS consultation
on ‘Restoring Trust in Audit and Corporate
Governance’, receiving updates at each
meeting on the audit and governance
reform agenda. We approved and reviewed
the outcome of a comparison exercise
against current controls, undertaken with
support from an external advisor and the
output of that exercise will be used to
develop a comprehensive roadmap and
implementation plan to be overseen by the
Committee. The Committee will continue
to review preparations for anticipated
reform during the year ahead.
Internal controls
The Board has overall responsibility
for the risk management framework, as
explained further on page 74. 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 to 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
management of the same. The Group’s
principal and emerging risks are set
out on pages 74 to 81.
– Legal and regulatory: Reflective of the
regulatory environment in which Rank
operates, and with an added emphasis
on recovery from the impact of the
pandemic on the Company, 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, taking account of
correspondence 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 deep-dive
presentations on the Group’s approach
to information security and disaster
recovery respectively from the Director
of IT Security and the Chief Information
Officer. The presentations provided, in
each case, 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.
Audit Committee Report
Continued
Dear shareholders
I am pleased to present the Audit
Committee Report for the 2021/22 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
The COVID-19 pandemic caused
substantial disruption to the Company
and the current macroeconomic climate
presents additional risk and uncertainty.
Further to this, the Committee carried
out a robust reassessment of the Group’s
principal risks, which can be found on
pages 74 to 81. We received regular
updates on the work of the Risk Committee
and debated the extent to which there were
new risks and/or increased risk within
the business and how such risks were
mitigated. The Committee also continued
its work on the essential oversight of
internal control (more detail of which
is set out below) and the Company’s
risk management systems.
The recovery of the business and
associated risks also contributed to
our work on going concern and viability.
We reviewed financial models (including
downside scenarios) to consider headroom
over the course of the financial year
2021/22 and beyond, taking time to
understand and challenge, where
necessary, significant judgements and
assumptions in the modelling, the reverse
stress test models and covenant and
liquidity headroom. More detail on this
work, together with our going concern and
viability statements, is on pages 82 to 83.
We also reviewed our approach to
impairments and discussed management’s
assessment for indicators of impairment
of assets, reversal of impairment and
associated disclosures. More detail can
be found on page 110.
108
The Rank Group PlcAnnual Report 2022 – 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, which was
refreshed during the year, is available
on www.rank.com.
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.
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
communicated to the relevant business
area for implementation of appropriate
corrective measures and the Committee
monitors senior management’s
responsiveness to the same.
The work undertaken by internal audit
during the year included: cyber-active
directory review, marketing compliance
and data quality review, cyber-perimeter
security review and a review of high value
customer controls. Venues audits
recommenced in August 2021. In addition
to the above, the internal audit team also
assisted with ad hoc regulatory matters
and 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 internal IT auditor.
The planned external quality assessment
of the internal audit function was on hold
due to the venues closures at the start of
2021. It is anticipated that it will proceed
in the next financial year.
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:
– The Annual Report and Accounts
are drafted by appropriate senior
management with overall coordination
by a team comprising the Group General
Counsel & Company Secretary, the
Chief Financial Officer, the Director
of Investor Relations and the Director
of Group Finance to ensure consistency;
– Comprehensive reviews of the drafts
of the Annual Report and Accounts
are undertaken by management, the
Executive Committee and the Board
Chair and respective Chair of each
Committee;
– A near-final draft is reviewed by the
Committee;
– A final draft is reviewed by the Board;
and
– 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 2022 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 110.
Additionally, 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 150 to 159.
For more information
on our approach to
risk management
see pages 74-81.
109
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Audit Committee Report
Continued
Key judgements and financial reporting matters 2021/22
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 2023 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.
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.
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.
Compliance with laws and regulations
The Group operates in an evolving regulatory environment
with increasingly complex laws and regulations, particularly
gambling-related regulations.
The Group has received income from governments during the
year, particularly the Coronavirus Job Retention Scheme (‘CJRS’),
the rules for which are often complex and with which the Group
is required to comply.
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.
The Committee conducted an annual assessment pursuant to
which the Directors were able to conclude that it is appropriate
to prepare the financial statements on a going concern basis,
as set out in more detail on pages 82 and 83. We reviewed
financial models (including downside scenarios), taking 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, considered whether
a viability period of three financial years remained most
appropriate, and confirmed that it was as part of a recommendation
to the Board. Further detail can be found on pages 82 and 83.
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.
The Committee reviewed management’s impairment review
process including, where applicable, the potential indicators
of impairment and/or reversal, cash flow projections, continued
post-COVID-19 revenue recovery, 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 2021/22 and reviewed the
disclosures including the sensitivity disclosures of changes in
key assumptions. Further details are disclosed in note 14 on
pages 188 to 191.
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.
The Committee reviewed and agreed the accounting for the CJRS
in 2021/22 and received updates on the quantum and timing of
claims on an ongoing basis throughout the year.
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. It also reviewed and agreed the treatment of Rank’s
successful VAT claim on slot machines income and associated
interest from 2006 to 2013 at the First-tier Tribunal as an SDI
and reviewed disclosures for transparency.
The Committee considered that management’s best estimate
of tax liabilities is appropriate.
110
The Rank Group PlcAnnual Report 2022 “ We continue to
consider the impact
of the BEIS
consultation on
‘Restoring Trust in
Audit and Corporate
Governance’ on
the Group.”
Karen Whitworth
Chair of the Audit Committee
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 95. 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.
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 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 150 to 159.
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. 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 priced above £25,000,
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
the same 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 £35,314
(2021: £37,600) (including interim fees).
Rank has used the services of other
accounting firms for non-audit work
during the period under review.
For more information
on our SDIs, please
go to note 4 on
page 179.
111
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Outcomes from 2021/22 review
This year’s Committee evaluation exercise,
facilitated externally by Lintstock Limited,
concluded that the Committee continues
to operate effectively. The process for the
review is set out on page 104. Having
considered the findings, we agreed that our
focus for the forthcoming year should be:
1. Supporting a review of Group finance
controls following the arrival of Richard
Harris as Chief Financial Officer and
as the Company further considers the
impact of BEIS on the Group (including
the proposed introduction of an audit
and assurance policy) and feedback
from the BEIS benchmarking work.
2. Continuing to build on the relationship
and develop efficient ways of working
with the external auditor.
3. Ensuring there is clear prioritisation for
the Committee in relation to its work for
the forthcoming year, bearing in mind
in particular the current macro-economic
conditions impacting the Group.
In concluding this report, I would like to
recognise and thank the Rank management
and finance team, the internal audit team
and 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
Audit Committee Report
Continued
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. Our progress against last year’s
actions, as well as the outcomes from this
year’s evaluation, are set out below.
Outcomes from 2020/21 review
1.
Agreed actions
To undertake a review of, and develop
further, the risk management framework
and ensure that there is a further focus
on emerging risks (including as regards
people).
Progress made during 2021/22
The tender process for the intended internal
audit effectiveness and risk management
framework review was placed on hold in
2021. As mentioned above, the review is
anticipated to proceed during the 2022/23
financial year.
The Committee’s review of the Company’s
principal risks included a focus on
emerging risks.
2.
Agreed actions
To focus on ways of working and develop
further the relationship with the external
auditor.
Progress made during 2021/22
The Committee Chair and the Chief
Financial Officer have regular meetings
with the external audit partner. Additional
meetings took place during the year to
focus in particular on ways of working.
3.
Agreed actions
To continue to ensure that the Committee
is able to focus on the key areas of risk and
on which to challenge management.
Progress made during 2021/22
The Group’s corporate risk register, and
mitigating actions, were reviewed in detail
by the Committee during the year. This
included periodic review for each identified
risk of likelihood and impact and risk
appetite throughout the year and respective
mitigating actions. The supporting key risk
indicators (with defined tolerance levels)
were also reviewed during the year.
112
The Rank Group PlcAnnual Report 2022 Matters discussed
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
2021 Annual Report is fair, balanced and understandable.
Reviewed and recommended approval of the 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.
Monitored the effectiveness of the internal audit function.
Reviewed major audit findings and approved remediation plans.
Reviewed the 2021/22 annual audit plan.
Reviewed the scope of audit coverage and approved planned work for 2022/23.
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 2020/21 annual results.
Assessed the effectiveness of the 2020/21 external audit.
Reviewed and approved the 2021/22 annual external audit plan and fee proposal.
Considered the initial results of the 2021/22 external audit.
Reviewed audit and non-audit fees incurred during 2021/22.
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 74 to
81).
Received corporate governance updates.
Considered and approved tax strategy and reviewed tax matters.
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.
Reviewed the Committee’s terms of reference and confirmed adherence during 2021/22.
Reviewed feedback and recommendations following Committee evaluation.
Reviewed internal financial controls.
Frequency
P
P
B
P
A
A
A
A
A
A
P
Q
B
A
Q
A
A
A
A
A
A
P
Q
Q
B
B
A
P
A&P
Q
B
B&P
A
A
A
2021/22 activity
Area of focus
Financial reporting
Internal audit
External audit
Risk and internal control
Governance and other
Key
A Annual
B Biannual
Q Quarterly
P Periodically
113
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview ESG and Safer Gambling Committee Report
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
auditor 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 Group
General Counsel & Company Secretary,
who acts as secretary to the Committee.
Key activities during the year
– Approved the Company’s new ESG
strategy and publication of the initial
Responsible Business Report in
January 2022. Monitored progress
towards and approved publication
of the 2022 Sustainability Report.
– Oversaw implementation of the
governance structure to support
the new strategy.
– Discussed and approved
management’s approach to developing
its TCFD reporting framework.
– Reviewed and monitored delivery
of safer gambling initiatives in each
area of the business.
– Discussed Rank’s contribution to
developments across the industry,
including consultation responses,
working with trade associations
and lobbying efforts in connection
with the Government’s review of
gambling legislation.
“The Committee recognises that how
we consider ESG risk and opportunity
is critical to the success and
sustainability of the business.”
Katie McAlister
Chair of the ESG & Safer Gambling Committee
Committee membership and attendance
Current members
Katie McAlister (Chair)1
Lucinda Charles-Jones
John O’Reilly
Alex Thursby
Karen Whitworth
Other members during the year
Chris Bell²
Susan Hooper³
Appointed to Committee
Attendance
April 2021
June 2022
May 2018
October 2019
November 2019
March 2016
July 2017
4/4
n/a
4/4
4/4
4/4
2/2
3/3
1. Katie McAlister was appointed Chair with effect 1 February 2022.
2. Chris Bell stepped down from the Committee in January 2022 following his resignation from the Board.
3. Susan Hooper stepped down from the Committee in January 2022. She was Chair of the Committee
until her departure on 31 January 2022.
Other attendees
Group General Counsel & Company Secretary
Director of Compliance & Responsible Gambling
Director of Public Affairs
Grosvenor Managing Director
Mecca Managing Director
Rank Interactive Managing Director
114
The Rank Group PlcAnnual Report 2022 Safer gambling initiatives
Safer gambling remains the Group’s
primary focus area. The Committee has
been keen to ensure 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 updating on safer
gambling initiatives. These initiatives take
a ‘customer-first’ approach to increasing
protection, as the Group continues to
evolve its customer 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. We
have also considered changes resulting
from new regulatory requirements and
industry commitments.
In addition, the Committee welcomed
further work on embedding a safer
gambling culture throughout the Group.
The aim of this work is to instil a
consistent approach in colleague mindset
to ways of working and processes in line
with Rank’s purpose, delivering exciting
and entertaining experiences within a safe
environment. One of the ways in which
this is being achieved is through a
training programme being carried out in
conjunction with GamCare, in which over
1,100 colleagues will take part. The
training is intended to benefit not only
customer-facing colleagues, but also those
that support them to ensure a consistent
and evolving ethos across the Group.
The Committee will receive reports on
the feedback and evaluation of the training
programme during the forthcoming year.
During the year, the Committee continued
to take the lead on reviewing the Group’s
response to the Gambling Commission’s
Annual Assurance Statement, which was
then presented to the Board for approval
prior to submission. We also considered
over the course of the year progress
against the initiatives highlighted
in such statement.
Dear shareholders
In my first report as Chair of the ESG &
Safer Gambling Committee, I am pleased
to provide a summary of the work
undertaken by the Committee over the past
twelve months and present the progress
made in evolving our ESG strategy.
The Group is committed to ensuring the
sustainability of its operations by aligning
its processes and policies to international
best practice as part of its aim to build
an even more resilient and responsible
business. We recognise that how we
consider ESG risk and opportunity is
critical to the success of our business and
that our key stakeholders are demanding
greater transparency and disclosure.
At the beginning of 2022 we were pleased
to launch our first Responsible Business
Report, which provided an overview of the
foundation work undertaken to establish
the appropriate approach to ESG at Rank.
Following the next stage of work, we are
delighted to publish our 2022 Sustainability
Report. Extracts from the report can be
found on pages 54 to 71, and the full report
is available at www.rank.com.
Key activities
Last year, the Committee determined
that it would provide rigour, support and
challenge to the business as it develops
and implements its new ESG strategy.
Following completion of the materiality
assessment in 2021, this year the
Committee approved the four key ESG
focus areas that underpin the strategy:
1. Customer experience – providing a
safe, secure environment and personal
experience, creating and maintaining
good gambling behaviours and
protecting vulnerable customers.
2. Colleague experience – educating our
people to enable and encourage positive
gaming behaviours and creating a fair,
safe and inspiring working environment.
3. Environmental management – ensuring
that our operations minimise any
negative impacts that Rank may have
on the environment and reducing our
carbon emissions wherever possible.
4. Community engagement – providing
an essential social outlet for customers,
generating lasting community spirit,
driving community action and
developing a genuine social legacy.
Each focus area has underlying objectives
and baseline KPIs.
The Committee then challenged the
business to ensure that the Company’s
ESG objectives relate to and are
amalgamated with its corporate objectives.
The refresh of the Group’s purpose and
strategic pillars, approved by the Board,
ensured the integration of the four ESG
focus areas into the Group’s corporate
aims, as articulated on page 55 of this
Annual Report. As a result, the Committee
is comfortable that Rank has a fully
integrated ESG and corporate strategy
going forwards that will enable the
business to continue to be managed
in a sustainable and responsible way.
During the year the Committee also oversaw
the implementation of the necessary
governance structure to ensure that there
is effective oversight of the strategy and
delivery of initiatives under it.
In developing its approach, the business,
overseen by the Committee, ensured that
each existing ESG initiative was allocated
to one of the four focus areas with an
owner, timeline and appropriate KPIs.
Going forwards, updates on each initiative
(and proposed new initiatives) will be
considered on a monthly basis by the
management-level ESG & Safer Gambling
Steering Committee, which will report
to this Committee on a regular basis.
This will enable us to track and evaluate
progress and provide Board-level oversight
of performance against strategy, as well
as global best practices.
Initial work on each of the four focus areas
was presented to the Committee during
the year, which prompted more detailed
discussion on each area’s key aims and
initiatives and the manner in which the
broader ESG strategy will be embedded
within the business. This included, for
example, discussions on colleague
engagement and development, as well
as broader debate on Rank’s wider social
impact and community-role as a primarily
land-based national casino and bingo
operator. It also included challenging
management and the Board as a whole
to focus in more detail going forwards on
how environmental matters are considered
within the decision-making process.
The Committee also oversaw
management’s work with consultant
partners to develop its reporting
framework to take account of Task Force
on Climate-related Financial Disclosures
(‘TCFD’) recommendations and in order
to set Rank on a carbon net zero pathway.
The Committee worked alongside the
Audit Committee in relation to TCFD
disclosures set out in this Annual Report.
115
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 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. The Committee’s
progress against last year’s actions are
set out below.
Outcomes from 2020/21 review
1.
Agreed actions
To widen the remit of the Committee to
encompass ESG more broadly, but without
losing its focus on safer gambling.
Progress made during 2021/22
The Committee’s remit has been widened,
with the right level of emphasis being
retained in respect of safer gambling.
It is committed to ensuring this remains
the case going forwards.
2.
Agreed actions
To consider and approve a wider ESG
strategy and the priorities within that
strategy to enable the Committee to assess
delivery against it.
Progress made during 2021/22
The ESG strategy has been approved and
the priorities and baseline KPIs have been
determined based on the materiality
assessment conducted the previous year.
ESG and Safer Gambling Committee Report
Continued
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.
Climate change, net zero planning
and Task Force on Climate-related
Financial Disclosures
There has been increasing focus from
stakeholders as to 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 carbon net zero
pathway. More detail on this is set out in
the 2022 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 63
to 69 with the compliance statement found
on page 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).
Safer gambling horizon scanning
and industry collaboration
The Committee regards safer gambling
as a topic of key importance to all the
Company’s stakeholders and an important
part of its work is to consider their views
on the Company’s approach. With this
in mind, the Committee recognises that
the Company cannot simply look at the
initiatives it has in-train as a reaction
to regulation, but must also pro-actively
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.
In particular, 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. The
Committee continues to consider
stakeholder views and those of the industry
and media on the review. We note that the
Government’s White Paper is expected to
be published imminently and, following
its publication, we will continue to monitor
stakeholder reaction as the business
assesses the impact of forthcoming
changes. The Committee also considered
the Commission’s response to its remote
customer interaction consultation and
subsequent new requirements published as
guidance in June 2022 for implementation
in September 2022. The Committee will
monitor effective implementation of any
changes required to be implemented
by the Company.
Rank’s contributions to the Government’s
review and consultations 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, all of
which are important voices in respect of
regulatory change. We continue to have
representation on the BGC’s committees
and working groups, including all those
specific to land-based gaming.
116
The Rank Group PlcAnnual Report 2022 On behalf of the Committee, I look forward
to reporting on the further progress that will
be made over the forthcoming year under
our expanded ESG strategy and agenda.
Finally, my appointment as Chair followed
the departure of Susan Hooper from the
Board at the end of January 2022 and I
wanted to take this opportunity to thank her
for her contribution towards driving Rank’s
ESG and safer gambling agenda. In other
changes to the Committee, I am delighted
to welcome Lucinda Charles-Jones, our new
independent Non-Executive Director, as a
member. Lucinda has particular expertise
in people, social and environmental matters
and I look forward to her contribution as
we progress into delivering the next stage
of our ESG agenda.
I look forward to meeting shareholders at
the forthcoming Annual General Meeting
when I will be happy to answer any
questions on this report.
Katie McAlister
Chair of the ESG & Safer Gambling
Committee
Outcomes from 2021/22 review
This year’s Committee evaluation exercise
was facilitated externally by Lintstock
Limited and concluded that the Committee
continues to operate effectively. The
process for such review is set out on
page 104. Having considered the findings,
we agreed that our priorities for the
forthcoming year should be:
1. 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.
2. To ensure clear accountability for
reporting under the new KPIs, delivery
of actions and tracking of progress.
In conclusion
Rank recognises the importance of
sustainability and resilience to all our
stakeholders and the value of continuing
to develop a robust strategy that protects
shareholder value, creates opportunities
for growth and innovation and sets the
foundation for long-term success. It is
committed to doing so.
We also remain committed to providing a
safe gambling environment for customers
to enjoy the services that we offer. We aim
to work constructively with regulators to
ensure ongoing compliance with
regulatory requirements and our industry
peers to continue to develop a collaborative
approach to safer gambling matters such
as improving the identification of
vulnerable customers. Finally, we continue
to recognise the importance of driving
cultural change throughout the
organisation so as to ensure that safer
gambling underpins all aspects of our
decision-making.
“ Safer gambling is
the Group’s primary
ESG focus area and
a topic of key
importance to all
our stakeholders.”
Katie McAlister
Chair of the ESG & Safer
Gambling Committee
Our 2022 Sustainability
Report can be found at
www.rank.com
117
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 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 Group 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 Group
General Counsel & 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 within its
delegated level of authority and estate
management.
– Reviewed and approved proposals
for Group insurance renewal.
– Reviewed Non-Executive Director fees.
– Reviewed its terms of reference.
Finance Committee Report
“The Finance Committee continues
to provide an important level of
oversight for material projects, estate
management and other approvals
within its delegated level of authority.”
Alex Thursby
Chair of the Finance Committee
Committee membership and attendance
Current members
Alex Thursby (Chair)
Richard Harris
John O’Reilly
Other members during the year
Bill Floydd¹
Simon Hay²
Appointed to Committee
Attendance
October 2019
May 2022
May 2018
November 2018
January 2022
8/8
2/2
8/8
2/2
4/4
1. Bill Floydd stepped down from the Committee in December 2021 following his resignation from the Board.
2. Simon Hay was a member whilst he was interim Chief Financial Officer, from January 2022 to April 2022.
Other attendees
Group General Counsel & Company Secretary
118
The Rank Group PlcAnnual Report 2022 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 Committee’s
progress against last year’s actions, as well
as the outcomes from this year’s evaluation,
are set out below.
Outcomes from 2020/21 review
The only key action from the 2020/21 review
was to undertake a more detailed review
of the Committee’s terms of reference.
This took place during the year, with the
revised terms of reference being put to,
and approved by, the Board in June 2022.
Outcomes from 2021/22 review
This year’s Committee evaluation exercise
facilitated externally by Lintstock Limited
(further details of which can be found on
page 104), concluded that the Committee
continues to operate effectively. Having
considered the findings, the Committee
agreed that, whilst there were no specific
areas identified for improvement, it should
continue to evaluate its role over the course
of the forthcoming year to ensure that its
place within the Company’s governance
structure remains appropriate and effective.
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
Dear shareholders
During the year, the Committee continued
to provide an important level of oversight
for material projects, estate management
and other approvals in accordance with
its delegated level of authority.
In reviewing the Committee’s terms
of reference, the members considered
its role within the Company’s governance
structure, discussing those matters that
were appropriate to be determined by the
Executive Directors rather than the
Committee, as well as those that would
be appropriate to be considered by the
Committee ahead of submission to the
Board. I am satisfied that the re-alignment
following this review will ensure that the
Committee continues to operate effectively
into the forthcoming year.
Estate management and capital
investment
During the year under review, the
Committee focused in particular on
supporting executive proposals relating
to estate management, with 41 lease
events occurring during the course of the
2021/2022 financial year. The Committee
also considered the proposed capex spend
for refurbishment of Grosvenor Merchant
City, which fell within its delegated
authority. More information about this
refurbishment can be found on page 34.
Utilities
The Committee monitored over the
course of the year the position regarding
escalating utilities costs, the increasingly
volatile market and its impact on the
Company. It considered the options
available to the Company in seeking to
mitigate such impact and management’s
preferred approach. The Committee referred
the matter to the Board and provided
updates to the Board as appropriate.
Group simplification
The Committee considered and approved
two subsidiary simplification exercises
during the financial year. The first of these
was the migration of business from Rank
Digital Espana S.A. to Bingosoft Plc, which
simplified the Group’s operating structure
in Spain. The second of these was the
transfer of ownership of Rank Interactive
(Gibraltar) Limited (‘RIGL’) within the
Group in preparation for the migration
of business from Rank Digital Gaming
(Alderney) Limited and Daub Alderney
Limited to RIGL. The migration took place
on 1 July 2022, consolidating the Rank
Interactive business under one entity, with
RIGL being the operator of this business
going forwards.
119
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Remuneration Committee Report
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 Group
General Counsel & Company Secretary,
who acts as secretary to the Committee.
Key activities during the year
– Determining operation of the
2021/22 annual bonus and the
2021/22 LTIP award.
– Confirming the vesting of the 2017/18
four-year block award, which was
heavily impacted by the pandemic and
approving the new one-off Recovery
Incentive Scheme, which was approved
by shareholders at the 2021 Annual
General Meeting.
– Continuing to keep wider workforce
remuneration arrangements under
review.
– Approving remuneration for new
members of the Executive Committee,
including for the Chief Financial Officer.
Role and responsibilities
“The Committee’s decision-making
on remuneration outcomes has been
shaped by the overall financial
performance of the Company over
the financial year.”
Steven Esom
Chair of the Remuneration Committee
Committee membership and attendance
Current members
Steven Esom (Chair)
Lucinda Charles-Jones
Katie McAlister
Karen Whitworth
Other members during the year
Chris Bell¹
Susan Hooper²
Appointed to Committee
Attendance
March 2016
June 2022
April 2021
November 2019
June 2018
September 2015
4/4
0/0
4/4
4/4
2/2
3/3
1. Chris Bell stepped down from the Committee in January 2022 following his resignation from the Board.
2. Susan Hooper stepped down from the Committee in January 2022 following her resignation from the Board.
Other attendees
Chief Executive
Group General Counsel & Company Secretary
Board Chair
Group Human Resources Director
Independent advisor to the Committee
Additional meetings were convened on six occasions during the year to, amongst other
things, finalise the rules, measures, targets and participants for the Recovery Incentive
Scheme, confirm the 2020/21 bonus outcome and approve remuneration for new
appointments to the Executive Committee. The Committee met separately during the
year to discuss matters without management present.
120
The Rank Group PlcAnnual Report 2022 Pension
With effect from 1 January 2023, the Chief
Executive’s payments in lieu of pension
will be 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%). The Chief
Financial Officer’s payments in lieu of
pension were agreed at the rate currently
available to the majority of the UK
employees when he joined the Company
in May 2022.
2021/22 bonus
The annual bonus for the 2021/22
financial year was based on a challenging
profit after tax target that represented
100% of the potential bonus opportunity.
The published profit after tax figure would
have resulted in 100% of the maximum
bonus opportunity being payable to the
Chief Executive based on the formulaic
outcome of the financial metric. However,
the Committee determined that it was not
appropriate to include the amount received
by the Company in respect of the VAT
claim referenced on page 27 of this report
within such figure for the purposes of
assessing whether the bonus targets had
been met, and exercised discretion to
exclude such amount, resulting in 0% of
the maximum bonus opportunity being
payable. Further details on performance
against targets are set out on page 133.
The Chief Financial Officer was not, in any
event, entitled to any bonus in respect of
the 2021/22 financial year in light of his
joining date.
Recovery Incentive Scheme
Shareholders will recall that a new
remuneration policy was approved at
the 2021 Annual General Meeting under
which a new one-off Recovery Incentive
Scheme (‘RIS’) was introduced.
Challenging financial targets for net
gaming revenue and profit after tax for the
2021/22 financial year were set, together
with a requirement for continued
employment (without notice). Further
to the Company’s financial performance,
such financial targets were not met and
the Chief Executive’s award therefore
lapsed on 30 June 2022. No award was
made to Bill Floydd following receipt in
August 2021 of notice of his resignation
from the Company.
2022/23 bonus scheme and ESG
The Committee has taken the opportunity
this year to reconsider the measures used
in connection with the bonus scheme.
Performance will continue to be based on
stretching targets, but the Committee has
determined that the financial measures
(this year to represent 85% of the
maximum bonus opportunity) shall be
based on adjusted earnings before interest
and tax rather than profit after tax, as this
is considered to be a better reflection of
the Company’s underlying financial
performance. However, the Committee
will consider the extent to which the
Company has effectively managed both
tax and interest liabilities when deciding
the quantum of any final bonus award.
Furthermore, mindful of investor
sentiment, it has determined that the
remaining 15% of the maximum bonus
opportunity will be based on specific
Environmental, Social and Governance
(ESG) targets. As further explained on
pages 55 to 71 and 114 to 117 of this Annual
Report, the Company’s approach to ESG
is developing and as a result, this year,
a qualitative approach will apply. This
remains a key area of focus for the
Committee though as we go into the new
financial year, 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, in
addition to the specific ESG measure, an
over-arching safer gambling assessment
will continue to apply.
Proposed LTIP grant under the 2020
LTIP during 2022/23
It is intended that an annual LTIP award
will be made to Executive Directors in
2022/23. This is the third award under the
2020 LTIP, with 40% of the award being
based on relative total shareholder return,
30% being based on earnings per share
and 30% being based on strategic
measures. It is intended that 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 are announced. The performance
conditions will be based on performance
in the 2024/2025 financial year. Further
details can be found on page 142. The
award 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.
Dear shareholders
On behalf of the Board, I am pleased to
present Rank’s Remuneration Committee
Report for the year ended 30 June 2022
which 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’).
This report 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 2022
Annual General Meeting.
Overview of 2021/22
As mentioned earlier in this Annual
Report, it has been a challenging year, in
particular for our UK venues businesses.
The Group’s operating profit of £66.2m
reflects the continued impact of the
pandemic, the slow return of overseas
customers to our London casinos and the
pressure on UK consumer discretionary
expenditure. 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.
Whilst we saw a number of departures
at an Executive Director and senior
management level during the year, we also
welcomed arrivals in the form of our new
Chief Financial Officer and new Managing
Director appointments for Grosvenor,
Mecca and the international business.
We recognise the key challenges and
opportunities for our business and will
continue to ensure that the Executive
Directors, and the senior management
team, remain appropriately incentivised
to achieve our strategic goals.
Base salaries
The Committee reviewed the Executive
Director base salaries during the year.
In 2021, in respect of the Chief Executive,
the Committee had determined that due
to COVID-19 no increase should apply.
During the year under review, the
Committee determined to increase the
Chief Executive’s salary by 3% in line with
the overall increases awarded to the wider
workforce and this increase applied with
effect from 1 April 2022.
The Committee will consider a further
review of Executive Director base salaries
at the appropriate time during the
forthcoming year.
121
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Remuneration Committee Report
Continued
Board changes
On 1 May 2022, Richard Harris, Chief
Financial Officer, was appointed to the
Board. The Committee approved the terms
of his remuneration prior to his appointment
and such terms are in accordance with the
Policy. Lucinda Charles-Jones was appointed
to the Board as Non-Executive Director on
22 June 2022. Details of the process for such
appointments are set out in the Nominations
Committee Report on pages 102 and 103.
The details of the termination
arrangements for Bill Floydd, Chris Bell
and Susan Hooper, who departed as
Directors during the year under review,
are set out on page 136, the terms of which
are in accordance with the Policy.
Workforce engagement
As well as Chair of this Committee,
I am also the Non-Executive Director with
designated responsibility for workforce
engagement. This subject is covered in
more detail on page 36 of this report, but
from a Committee perspective, it should
be noted that in attending the workforce
engagement forums I ensured that I was
available to discuss executive remuneration
with colleagues and report back to the
Committee and Board as appropriate.
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 for the forthcoming year.
Looking ahead
Our 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. To this end the
Committee endeavours to provide clarity
on how pay and performance is reported
at Rank and how decisions made by the
Committee support our purpose and the
strategic direction of the Group. As we go
into the new financial year, we continue
to be mindful of investor views on
remuneration as we strive to ensure that
management is appropriately incentivised
to achieve our strategic goals.
I look forward to receiving your support
at our 2022 AGM, 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. In the
meantime, if you would like to discuss any
aspect of our Remuneration Policy, please
feel free to contact me through the
Company Secretary.
Steven Esom
Chair of the Remuneration Committee
“ Mindful of investor
sentiment, 15% of
the maximum
bonus opportunity
for 2022/23 will
be based on ESG
targets.”
Steven Esom
Chair of the Remuneration
Committee
122
The Rank Group PlcAnnual Report 2022 Remuneration Policy
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.
Alignment with Provision 40
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 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 128 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.
123
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Remuneration Policy
Continued
Remuneration Policy table
The key components of Executive Directors’ remuneration
are summarised below:
Other benefits, in line with the provision to other employees, may
be offered as appropriate and travel and related expenses may
be reimbursed.
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.
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.
Performance metrics
Not applicable, although the individual’s performance will be
taken into account when determining the level of increase, if any.
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.
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.
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.
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.
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.
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.
Performance metrics
Not applicable.
Maximum opportunity
For all new 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).
The incumbent Executive Directors currently receive a pension
contribution (up to any maximum contribution levels set annually
by HMRC) or a cash allowance of 10% of the Executive Director’s
base salary (less the lower earnings limit) as part of their
contractual arrangements.
The Chief Executive’s pension allowance will align with the
majority of the wider workforce with effect from 1 January 2023.
124
The Rank Group PlcAnnual Report 2022 Annual bonus
Long-term incentive plan
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.
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
Rank operates an annual bonus scheme in which Executive
Directors participate.
Operation
Awards are normally granted annually.
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 award’s 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.
125
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 PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Remuneration Policy
Continued
Recovery Incentive Scheme (‘RIS’)
In-employment shareholding requirement
Operation
The RIS is a one-off plan with awards granted shortly after the
2021 Annual General Meeting.
Component and link to business strategy
To create greater alignment between Executive Directors
and shareholders.
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:
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.
– net gaming revenue; and
– profits after tax, with both targets needed to be met for vesting
Performance metrics
Not applicable.
to occur.
Maximum opportunity
Not applicable.
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.
126
The Rank Group PlcAnnual Report 2022 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.
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.
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.
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 and the
DBP). 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.
127
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 2022 Scenario chart
Chief Executive
)
s
0
0
0
£
(
n
o
i
t
a
r
e
n
u
m
e
R
3,500
3,000
2,500
2,000
1,500
1,000
500
0
£1,480
35%
26%
39%
£579
100%
Minimum
Target
£2,897
53%
£2,382
44%
32%
27%
24%
20%
Maximum Maximum
with 50%
share price
growth for LTIP
Chief Financial Officer
)
s
0
0
0
£
(
n
o
i
t
a
r
e
n
u
m
e
R
3,500
3,000
2,500
2,000
1,500
1,000
500
0
£860
30%
25%
45%
£383
100%
Minimum
Target
£1,337
39%
32%
29%
£1,601
50%
26%
24%
Maximum Maximum
with 50%
share price
growth for LTIP
Fixed pay
Annual bonus
Long-term incentives (‘LTIP’)
Minimum: Comprises the value of fixed pay using
the current base salary (before any voluntary
reductions) and pension and the value of last year’s
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 vest in full.
Maximum with 50% share price growth:
Maximum pay and the impact of an assumed 50%
share price growth on the LTIP.
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.
Remuneration Policy
Continued
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.
128
The Rank Group PlcAnnual Report 2022
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.
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
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.
Executive Directors’ service
agreements
It is the Group’s policy that Executive
Directors have rolling service agreements.
Provision
Remuneration
Notice period
Termination payment
Detailed terms
– 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
Six months’ notice from both the Company and the Director
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 2022) for Executive Directors who served on the Board during the year, together with the date of their
respective service agreements, is as follows:
Position
Chief Executive
Name
John O’Reilly
Chief Financial Officer
Richard Harris
Chief Financial Officer
Bill Floydd
Date of contract/Commencement date
30 April 2018/
7 May 2018
20 December 2021/
1 May 2022
1 November 2018/
12 November 2018
Length of Board service
4 years 2 months
2 months
2 years 8 months1
1. Bill Floydd was appointed to the Board on 1 May 2019. He stepped down from the Board on 31 December 2021.
129
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Remuneration Policy
Continued
Policy for Non-Executive Directors (including Chair)
Component
Fees
Purpose and link to
business strategy
To attract and retain skilled,
high-calibre individuals to
approve and challenge the
Group’s strategy.
Mechanics operation and
performance framework
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.
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.
Maximum
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
Chris Bell
Lucinda Charles-Jones
Chew Seong Aun
Steven Esom
Susan Hooper
Katie McAlister
Alex Thursby
Karen Whitworth
Original date of appointment
to Board
1 June 2015
22 June 2022
10 December 2020
1 March 2016
1 September 2015
28 April 2021
1 August 2017
4 November 2019
Date of letter of engagement
5 May 2015
22 June 2022
9 December 2020
24 February 2016
11 August 2015
26 April 2021
21 August 20191
4 November 2019
Total length of service
6 years 7 months
< 1 month
1 year 6 months
6 years 4 months
6 years 5 months
1 year 2 months
4 years 11 months
2 years 7 months
1. 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.
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 128, 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.
130
The Rank Group PlcAnnual Report 2022 Annual Report on Remuneration
The Directors’ Remuneration Report has been prepared on behalf of the Board by the Committee, under the chair-ship of Steven Esom.
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.
Directors’ single remuneration figure (Audited)
The table below presents a single remuneration figure for each Director determined in accordance with the 2013 Regulations for the
years ended 30 June 2022 and 30 June 2021 in respect of performance during the years ended on those dates. This records the full
vesting of the 2017/18 LTIP in June 2021 (notwithstanding that it is only accessible to the Executive Directors in accordance with a
three-year vesting schedule). Both tables also include pro forma figures for the Executive Directors to reflect the vesting schedule
(please see footnotes to the tables for further information):
Fixed pay (£)
Performance pay (£)
Salary/
fees
Taxable
benefits1
31,259
503,750
Pension Total fixed
11,845
3,129
175,000
58,833
2021/22
Executive Directors
John O’Reilly
49,751 584,760
John O’Reilly (pro forma)2 503,750 31,259 49,751 584,760
Bill Floydd3
17,188 204,033
Richard Harris4
63,696
1,734
Non-Executive Directors
Chris Bell6
Chew Seong Aun7
Lucinda Charles-Jones8
Steven Esom
Susan Hooper9
Katie McAlister
Alex Thursby
Karen Whitworth
28,677
0
n/a
n/a
1,346
0
57,500
0
31,208
0
0
51,458
0 160,000
60,141
0
28,677
n/a
1,346
57,500
31,208
51,458
160,000
60,141
0
n/a
0
0
0
0
0
0
Cash
bonus
Deferred
bonus
3-year
block LTIP
award
vesting
Total
variable
2021/22 total
remuneration
(£)
Other
0
0
0
0
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0
0
0²
0 34,663 34,663
0
0³
0
0
n/a
0
n/a
n/a
n/a
212,8625
584,760
619,423
204,033
276,558
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
28,677
0
1,346
57,500
31,208
51,458
160,000
60,141
1. Taxable benefits comprise car allowance, fuel benefit (other than for Richard Harris), and life, long-term disability and private medical insurances.
2. 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 first tranche of the award vested on 1 October 2021 and was included in last year’s Report on a pro forma basis and in the table
below. The pro forma figure shown in the table above is the second tranche which will vest on 1 October 2022, using the average share price (106.9p) for the three
months to 30 June 2022. This will be restated next year using the actual share price when the award vests.
3. 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.
4. Richard Harris was appointed to the Board on 1 May 2022.
5. 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.
6. Chris Bell stepped down from the Board on 18 January 2022.
7. Chew Seong Aun does not receive any payment for his role as a Non-Executive Director.
8. Lucinda Charles-Jones was appointed to the Board on 22 June 2022.
9. Susan Hooper stepped down from the Board on 31 January 2022.
131
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Annual Report on Remuneration
Continued
2020/21
Executive Directors
John O’Reilly
John O’Reilly (pro forma)4
Bill Floydd
Bill Floydd (pro forma)4
Non-Executive Directors
Chris Bell
Chew Seong Aun5
Steven Esom
Susan Hooper
Katie McAlister6
Tang Hong Cheong7
Alex Thursby
Karen Whitworth
Fixed pay (£)
Performance pay (£)
Salary/
fees1
Taxable
benefits2
Pension Total fixed
Cash
bonus
Deferred
bonus
Block LTIP
award
vesting
Total
variable
2020/21 total
remuneration
(£)
29,742
486,539
48,030 564,311
486,539 29,742 48,030 564,311
29,120 346,583
297,436
297,436 20,027 29,120 346,583
20,027
51,092
n/a
55,969
52,060
8,910
n/a
155,692
57,432
0
n/a
0
0
0
n/a
0
0
0
n/a
0
0
0
n/a
51,092
n/a
55,969
52,060
8,910
n/a
0 155,692
57,432
0
0
0
0
0
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
179,0183
179,018
0
0 57,317 57,317
82,335
0
0 23,820 23,820
82,3353
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
743,3293
621,628
428,9183
370,403
51,092
0
55,969
52,060
8,910
0
155,692
57,432
1. Executive and Non-Executive Directors in situ at the time volunteered a 20% reduction in salaries and fees with effect from 1 April 2020 until 15 August 2020.
2. Taxable benefits comprise car allowance, fuel benefit, life, long-term disability and private medical insurances.
3. In accordance with the 2013 Regulations, LTIP vesting values in respect of the 2017/18 block award, for which the performance period finished on 30 June 2021, are
shown in the single remuneration figure for John O’Reilly and Bill Floydd as having vested in full on 30 June 2021. This had the effect of recording the full vesting
in the 2020/21 financial year even though it was only accessible to these Executive Directors in accordance with a three-year vesting schedule, subject to continued
service and a post-vesting holding period. For John O’Reilly, the figures shown in the table have been restated to include the value of the first tranche which vested
on 1 October 2021 using the share price (176.8p) on the first vesting date of 1 October 2021 and two-thirds of the full vesting value by reference to 30 June 2021.
For Bill Floydd, the figures shown in the table have been restated to include the value of the first tranche which vested on 22 November 2021 using the share price
(152p) on the first vesting date of 22 November 2021 and two-thirds of the full vesting value by reference to 30 June 2021. Based on the performance conditions
assessed as at 30 June 2021 (see pages 124 and 125 of our 2021 Annual Report and Accounts for full detail of the vesting conditions), a total of 97,257 shares for the
Chief Executive and 47,013 shares for the Chief Financial Officer were expected to vest, in three equal tranches from 1 October 2021 (22 November 2021 for the
Chief Financial Officer) provided that the individuals met the service requirements and subject to a post-vesting two-year holding period.
4. 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 first tranche of the award of 176.8p for the Chief Executive and 152.0p for the Chief Financial Officer (due to different vesting dates) the
value of that first tranche was £57,317 for the Chief Executive (32,419 shares) and £23,820 for the Chief Financial Officer (15,671 shares) which would have resulted
in total remuneration (restated on a pro forma basis with only that first tranche of the 2017/18 LTIP being included) of £621,628 for the Chief Executive and £370,403
for the Chief Financial Officer as stated in the above table.
5. Chew Seong Aun was appointed to the Board on 10 December 2020. He does not receive any payment for his role as a Non-Executive Director.
6. Katie McAlister was appointed to the Board on 28 April 2021.
7. Tang Hong Cheong was appointed to the Board on 15 January 2019 and stepped down on 10 December 2020. He did not receive any payment for his role
as a Non-Executive Director.
Non-Executive Directors are entitled to receive fees only and details of those received are provided on page 142. These amounts
are within the maximum annual aggregate amount of £750,000 currently permitted by the Company’s Articles of Association.
Base salary (Audited)
The Committee reviewed the Executive Director base salaries during the year. In 2021, in respect of the Chief Executive, the
Committee had determined that due to COVID-19 no increase should apply. During the year under review, the Committee determined
to increase the Chief Executive’s salary by 3% in line with the overall increases awarded to the wider workforce and this increase
applied with effect from 1 April 2022. Richard Harris was appointed as Chief Financial Officer on 1 May 2022 and his salary on
appointment is set out below.
Chief Executive
Chief Financial Officer
30 June 2022
£515,000
£353,000
1 April 2022
£515,000
n/a
1 April 2021
£500,000
n/a
% change
3%
n/a
The Committee will consider a further review of Executive Director base salaries at the appropriate time during the forthcoming year.
Pension
The Chief Executive agreed that, with effect from 1 January 2023, his payments in lieu of pension will be 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%). The Chief Financial Officer’s payments in lieu of pension were agreed
at the rate currently available to the majority of the UK employees when he joined the Company in May 2022.
132
The Rank Group PlcAnnual Report 2022 Annual bonus plan (Audited)
The bonus for 2021/22 was based on a challenging target that was set by the Committee at the start of the financial year. A single
financial performance target (based on profit-after-tax) made up 100% of the bonus opportunity.
The profit-after-tax target was £33.6m as at 30 June 2022. The threshold for payment against this target was set at 95% of target
(£31.92m) and there was a straight line to a maximum of 105% (£35.28m). Straight-line vesting applied between threshold and
maximum, as follows:
Payout
Profit-after-tax
Threshold
(0%)
£31.92m
Target
(50%)
£33.6m
Maximum
(100%)
£35.28m
Actual
£(0.8)m1
Payout
(% of max)
0%
1. For the financial year 2021/22, the Company reported a profit-after-tax of £66.2m, which included monies from the VAT claim referenced on page 27 of this report.
The Committee determined that it was not appropriate to include the amount received by the Company in respect of the VAT claim for the purpose of assessing
whether the bonus targets had been met, and exercised discretion to exclude this amount. This resulted in a profit-after-tax figure for these purposes of £(0.8)m,
resulting in 0% of the maximum bonus payable.
An underpin of the business returning a positive operating profit applied, together with 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.
Outcome
Overall, the Committee determined that no bonus would be payable to the Chief Executive. The Chief Financial Officer was not, in any
event, entitled to any bonus in respect of the 2021/22 financial year in light of his joining date.
Bonus payable for financial-based performance
Discretion applied based on underpin
Total bonus payable for 2021/22 (% of maximum)
Chief
Executive
0%
n/a
0%
Chief Financial
Officer
n/a
n/a
n/a
Long-term incentives (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 will vest on
1 October 2022 and the third tranche of 32,419 will vest on 1 October 2023, in each case subject to continued employment.
2021/22 LTIP granted during the year (annual award)
An LTIP award was granted on 23 September 2021 to John O’Reilly, based on performance over a three-year period ending 30 June 2024.
The performance measures and targets for such award were set by the Committee in August 2021, prior to the grant.
Director
Plan
Date of grant
Face value at grant (% of salary)
Face value at grant (£)
Share price at grant
Number of shares comprised in award
Performance period
Earliest vest date
John O’Reilly (Chief Executive)
2020 LTIP
23 September 2021
200%
£1,000,000
171.8p
582,072
1 July 2021 to 30 June 2024
23 September 2024
As with the 2020/21 grant, 40% of the award vests by reference to relative total shareholder return (‘RTSR’), 30% vests by reference
to earnings per share growth and 30% vests by reference to strategic measures. The performance metrics are the same as for the
2020/21 grant (as set out above). Straight-line vesting applies for all metrics between threshold and stretch. Vesting is also subject to a
share price underpin and will take into consideration any current or impending safer gambling sanction and Rank’s suitability to operate.
133
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Annual Report on Remuneration
Continued
The strategic targets and share price underpin are deemed commercially sensitive and will be disclosed at the time of vesting.
TSR
EPS
Strategic Measures
Total
Weighting
40%
30%
10%
10%
10%
100%
Threshold target
Median
14.1p
Stretch target
Outperform median by
25%
24.5p
Group EBIT Margin (%)
Digital NGR (£m)
Venues NGR (£m)
Threshold vesting (% of max)
10%
7.5%
2.5%
2.5%
2.5%
25%
Recovery Incentive Scheme (Audited)
At the 2021 Annual General Meeting, shareholders approved the introduction of a one-off Recovery Incentive Scheme (RIS) with a view
to ensuring that the Executive Directors were retained and incentivised to deliver the required recovery in performance following the
impact of COVID-19 on the business, whilst reflecting shareholder interests in remuneration arrangements. Following such approval,
an award with a value of 100% of salary was granted on 25 October 2021 to John O’Reilly, based on financial performance for the
2021/22 financial year. The performance measures and targets for such award were set by the Committee in July 2021, prior to the
grant (subject to shareholder approval of the scheme). The awards will vest 50% after one year and 50% after two years (subject to
continued employment), and will be subject to a six-month holding period on vesting. For completeness, it should be noted that no such
award was made to Bill Floydd as his notice of resignation was received in August 2021, prior to the 2021 Annual General Meeting at
which the rules of the RIS were approved.
Director
Plan
Date of grant
Face value at grant (% of salary)
Face value at grant (£)
Share price at grant
Number of shares comprised in award
Performance period
Earliest vest date for first instalment
Vest date for second instalment
John O’Reilly (Chief Executive)
Recovery Incentive Scheme
25 October 2021
100%
£499,998
163.5p
305,772
1 July 2022
25 October 2022 (50%)
25 October 2023 (50%)
Outcome of the RIS
The following financial targets for net gaming revenue and profits after tax for the 2021/22 financial year applied to the award, with
both targets needing to be met for the awards to vest.
Performance measure
NGR
PAT1
Target Actual achieved
£644.0m
£(0.8)m1
£740m
£33.6m
% vesting
0%
0%
1. For the financial year 2021/22, the Company reported a profit-after-tax of £66.2m, which included monies received from the VAT claim referenced on page 27 of this
Annual Report. The Committee determined that it was not appropriate to include the amount received by the Company in respect of the VAT claim for the purpose
of assessing whether the RIS targets had been met, and exercised discretion to exclude this amount. This resulted in a profit-after-tax figure for these purposes
of £(0.8)m, resulting in 0% vesting of the part of the RIS award subject to PAT.
Further to the above, the RIS award granted to John O’Reilly on 25 October 2021 lapsed in full on 30 June 2022.
Appointment of Richard Harris as Chief Financial Officer
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 is in line with the Policy. It comprises an annual salary of £353,000, a pension allowance equal to that received
by the wider workforce (currently 3%) and benefits in line with the Policy. Richard is eligible to participate in the Company’s annual
bonus scheme, receiving a maximum bonus opportunity of 120% of salary, and be considered for grants under the Company’s LTIP.
Richard received a cash award on joining Rank of £12,862 in lieu of a cash bonus forfeited from his previous employer. Such payment
was made in accordance with the Policy and is repayable if Richard were to leave Rank within 12 months of it having been paid to him.
In addition, on 6 May 2022, Richard received an award over 186,636 shares to replace awards granted by his previous employer which
were forfeited on joining the Company, the details of which are set out on the following page. 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.
134
The Rank Group PlcAnnual Report 2022 Director
Plan
Date of grant
Face value at grant (£)
Share price at grant
Number of shares comprised in award
Vest date for first instalment
Vest date for second instalment
Richard Harris (Chief Financial Officer)
N/A (made in accordance with the exemption contained in Rule
9.4.2(2) of the UK Listing Rules and the Policy)
6 May 2022
£200,000
107.16p
186,636
13 May 2023 (50%)
16 March 2024 (50%)
Appointment of new Non-Executive Director
Lucinda Charles-Jones was appointed to the Board as Non-Executive Director on 22 June 2022. Her fees were approved by the Board
at £50,000 per annum (being the base Non-Executive Director fee payable to other Non-Executive Directors).
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)
2021/22
2021/22 (pro forma)3
2020/21
2020/21 (pro forma)3
2019/20
2018/19
(12 months)
(12 months)
(12 months)
(12 months)
(12 months)
(12 months)
Single figure
of total
remuneration1
584,760
619,423⁴
743,3292
621,628⁵
552,238
580,328
Annual cash
bonus: actual
payout vs.
maximum
opportunity
0%
0%
0%
0%
0%
0%
LTIP vesting
rates against
maximum
opportunity
0%
2.0%
6.1%
2.0%
n/a
n/a
1. 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.
2. 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.
3. 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.
4. Unaudited note: The figure includes the second tranche of the 2017/18 block award LTIP vesting on 1 October 2022, subject to continued employment,
using three-month average share price to 30 June 2022.
5. Unaudited note: The figure has been restated to reflect the actual share price applicable at vesting of the first tranche of the award of 176.8p. The value of that first
tranche was £57,317 for the Chief Executive, which resulted in total remuneration (restated on a pro forma basis with only that first tranche of the 2017/18 LTIP
being included) of £621,628 for the Chief Executive in 2020/21.
Henry Birch (from 6 May 2014 until 7 May 2018)
2017/18
2016/17
2016/17 (pro forma)1
2015/16
2014/15
2013/14
(10 months)
(12 months)
(12 months)
(12 months)
(12 months)
(2 months)
Single figure
of total
remuneration
£487,006
£2,054,662
£1,275,650
£932,639
£916,010
£81,850
Annual cash
bonus: actual
payout vs.
maximum
opportunity
0.00%
63.15%
63.15%
80.00%
87.20%
0.00%
LTIP vesting
rates against
maximum
opportunity
n/a
37.50%
12.5%
n/a
n/a
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.
135
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Annual Report on Remuneration
Continued
Ian Burke (until 16 May 2014)
2013/14
2012/13
2011/12
(10.5 months)
(12 months)
(18 months)
Single figure
of total
remuneration1
£663,804
£1,267,489
£3,254,000
Annual cash
bonus: actual
payout vs.
maximum
opportunity
0.00%
0.00%
40.00%
LTIP vesting
rates against
maximum
opportunity
0.00%
96.25%
100.00%
1. 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.
Total shareholder return
(Source: Datastream)
)
d
e
s
a
b
e
r
(
)
£
(
e
u
l
a
V
250
200
150
100
50
0
30/06/2012
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
Rank Group Plc
FTSE 350 (excluding investment trusts)
This graph shows the value, by 30 June 2022, of £100 invested in Rank on 30 June 2012, compared with the value of £100 invested in the FTSE 350 Index (excluding
Investment Trusts) on the same date. The other points plotted are the values at intervening financial year-ends.
Leaving arrangements (Audited)
Bill Floydd stepped down from the Board and left the business on 31 December 2021. He did not receive any payment in lieu of notice
or any payment for loss of office. Bill did not receive any bonus in respect of the 2021/22 financial year and all his outstanding LTIP
awards (2017/18 LTIP tranches 2 and 3 and 2020/21 LTIP) lapsed in full on his leaving date. His first tranche under the 2017/18 LTIP
vested on 22 November 2021 based on performance achieved (see page 132) and remains subject to a two-year holding period.
Chris Bell stepped down from the Board on 18 January 2022. He did not receive any payment in lieu of notice or any payment for loss
of office.
Susan Hooper stepped down from the Board on 31 January 2022. She did not receive any payment in lieu of notice or any payment
for loss of office.
The position adopted in relation to each such departing Director was 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.
136
The Rank Group PlcAnnual Report 2022
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 UKLA’s
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 2021 and 30 June 2022 are set out in the table below.
All awards were made as conditional awards:
Non-Executive Directors
Chris Bell
Lucinda Charles-Jones
Chew Seong Aun
Steven Esom
Susan Hooper
Katie McAlister
Alex Thursby
Karen Whitworth
Executive Directors
Bill Floydd
Richard Harris
John O’Reilly
Ordinary
shares as at
30 June
2021
Ordinary
shares as at
30 June
2022
Unvested share
awards subject
to performance
conditions as at
30 June
2021
Unvested share
awards subject
to continued
employment
only as at
30 June
2021
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
29,614
0
n/a
90,000
20,000
n/a
25,000
20,000
45,000
n/a
302,748
29,6141
0
0
90,000
20,0002
0
25,000
20,000
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
53,2823
75,000
319,899
369,177
n/a
813,179
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0
n/a
0
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0
1,362,832
n/a
186,636
0
1. Position as at 18 January 2022 when Chris Bell stepped down from the Board.
2. Position as at 31 January 2022 when Susan Hooper stepped down from the Board.
3. Position as at 31 December 2021 when Bill Floydd stepped down from the Board.
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 2022.
The current level of dilution, based on the maximum number of shares that could vest as at 30 June 2022, 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:
Maximum number of shares needed to satisfy existing unvested
awards as at 30 June 2022
Total number of shares issued in respect of awards granted after
30 June 2012
Total
Total awards under
discretionary schemes as at
30 June 2022
Percentage of issued
share capital as at
30 June 2022
4,644,8561
Nil
4,644,856
1.02%
0%
1.02%
1. For the avoidance of doubt, this number reflects tranche 2 and tranche 3 of the 2017/18 LTIP, which will vest in October 2022 and October 2023 respectively.
For further information, please see pages 124 and 125 of our 2021 Annual Report and Accounts.
137
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Annual Report on Remuneration
Continued
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).
Overall expenditure on pay
Dividend paid in the year
Share buyback
2021/22
189.9
Nil
Nil
2020/21
£166.6m
Nil
Nil
Percentage
change
14%
n/a
n/a
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 2022 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
Chief Executive
Chief Financial Officer4
Chris Bell
Steven Esom
Susan Hooper
Katie McAlister
Alex Thursby
Karen Whitworth
Chew Seong Aun5
Average employees3
Year1
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
2021/22 vs 2020/21
2020/21 vs 2019/20
2019/20 vs 2018/19
Salary2
3.5%
2.4%
-5.0%
-21.4%
4.4%
470.0%
-43.9%
0.6%
-3.2%
2.7%
2.5%
-5.0%
-40.1%
2.4%
-3.1%
477.5%
n/a
n/a
2.8%
27.2%
107.8%
4.7%
61.7%
n/a
n/a
n/a
n/a
8.6%
7.4%
-10.32%
Benefits2
4.2%
-1.8%
-3.8%
-31.0%
11.9%
496.6%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
9.3%
-7.7%
-10.32%
Bonus
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-44.0%
1.6%
-10.32%
1. Excludes any Non-Executive Directors appointed during 2021/22.
2. 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.
3. Calculated on basis of all UK employees, including the CEO, 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.
4. The figures for the Chief Financial Officer are the sums of salaries, benefits and bonuses received by the former and current CFOs.
5. Chew Seong Aun does not receive any fees in respect of his role on the Board.
138
The Rank Group PlcAnnual Report 2022 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 for 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 as a result of the furlough scheme and different return-to-work
arrangements for different employee populations. 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 2021, 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 2021/22, using the single total figure remuneration as disclosed on page 131
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
2022 figures
(Option C)
2022 figures (pro forma)1 (Option C)
2021 figures1,2
(Option C)
2021 figures (pro forma)1,3
(Option C)
(Option A)
2020 figures
CEO
25th percentile
50th percentile
75th percentile
25th
percentile
ratio
30:1
32:1
39:1
34:1
32:1
50th
percentile
ratio
28:1
29:1
38:1
32:1
31:1
75th
percentile
ratio
23:1
25:1
30:1
25:1
24:1
2021/22 Salary
£503,750
£18,195
£20,198
£22,822
2021/22 Total
pay and benefits
£584,760
£19,198
£21,198
£24,903
1. The 2013 Regulations require the full value of the 2017/18 LTIP block award to be included in the 2021 figures. If the CEO single figure for 2021 is adjusted to
include only the first tranche of the 2017/18 LTIP (on the basis that it actually vests in equal tranches over three years), this would have the impact on CEO total pay
and benefits for 2021 indicated in the 2021 pro forma disclosure. If the CEO single figure for 2022 is similarly adjusted to include only the second tranche of the
2017/18 LTIP, this would have the impact on the CEO pay ratio for 2022 indicated in the 2022 pro forma disclosure.
2. The 2021 figures have been restated 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
LTIP vesting by reference to 30 June 2021.
3. 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.
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 2021. In April 2021 a significant proportion of colleagues were furloughed
in response to national lockdowns and other restrictions that reduced trading. This impacted the gender pay gap calculations for the
second consecutive year as the Government Equalities Office confirmed that the furlough scheme is classified as temporary leave, so
where colleague salaries are not topped up to 100%, they were excluded from the pay calculations, but included in the bonus calculations,
where applicable. To put this into perspective in terms of the results that were reviewed by the Committee, as a result of being
furloughed, 93% of colleagues were excluded from the gender pay calculations.
The published results show mean and median gap increased slightly by 4.6% and 8.7% respectively. However, the Committee does
not believe these results are truly representative of the situation, with only 441 qualifying colleagues from a maximum total of 6,456
colleagues included in the pay gap analysis, representing just 7% of the workforce.
The bonus gap analysis included all employees. The mean gender bonus gap was broadly consistent year-on-year and the median
gender bonus gap significantly improved from 22.5% to 5.2%.
Whilst the results for this year may be viewed as largely arbitrary, 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.
139
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Annual Report on Remuneration
Continued
Committee activity during the year (Unaudited)
Matters discussed by the Committee during the year include the following:
– Finalising the rules for a new recovery incentive scheme for Executive Directors (further to shareholder consultation, but subject
to shareholder approval at the 2021 Annual General Meeting) and senior management and determining the performance measures
and targets for the same;
– Analysis of shareholder voting at the 2021 Annual General Meeting on the proposed new remuneration policy and annual
remuneration report;
– April 2022 fixed pay review;
– 2020/21 and 2021/22 annual bonus outcomes;
– 2022/23 annual bonus plan structure;
– 2021/22 LTIP grant performance measures and targets;
– 2017/18 and 2020/21 LTIP grant performance;
– Remuneration of the Chair, independent Non-Executive Director and Executive Committee members appointed during 2021/22;
– Corporate governance and regulatory matters;
– Executive Director shareholding guidelines and the Company’s free float position;
– Review and approval of the annual remuneration report;
– Review and approval of the Company’s Gender Pay Gap Report; 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 formal tender process was conducted in March 2022, pursuant to which the Committee determined to continue to work
with A&M as its retained advisor on remuneration. 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 was paid fees totalling £51,764 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.
Our progress against last year’s actions, as well as the outcomes from this year’s evaluation, are set out below.
Progress made during 2021/22
The Retention Incentive Scheme was introduced to help ensure senior management is retained
and incentivised to deliver as the Company recovers from the impact of COVID-19 on the business.
Nevertheless, the Committee notes that this area continues to be a work in progress.
This was successfully completed with grants made under the Retention Incentive Scheme during
the year.
This remains an area of ongoing review, but notably the approach to the annual bonus has
been revisited this year and also includes ESG targets in relation to 15% of the maximum bonus
opportunity for Executive Directors.
Outcomes from 2020/21 review
Agreed actions
Continuing to review the
alignment of management
incentives with strategy,
particularly as the Company
recovers from the impact
of the pandemic.
Managing the transition
between the legacy 2017/18
award to the new annual LTIP
and, subject to shareholder
approval, the grant of the
proposed recovery incentive
scheme.
Continuing to consider the
alignment of shareholder views
and the need to retain, motivate
and incentivise management
and ensure appropriate
challenge to proposals made
and advice received.
140
The Rank Group PlcAnnual Report 2022 Outcomes from 2021/22 review
This year’s Committee’s evaluation exercise, facilitated externally by Lintstock Limited concluded that the Committee continues
to operate effectively. The process for such review is set out on page 104. Having considered the findings, we agreed that our focus
for the forthcoming year should be, in particular:
1. Reviewing alignment of management incentives with strategy, particularly in light of the refresh of the Company’s strategic pillars
this year.
2. Reviewing approach to stakeholder engagement from a remuneration perspective.
3. Considering ways in which to further embed ESG metrics in reward.
Statement of shareholder voting (Unaudited)
The table below shows the voting outcome of the Directors’ Remuneration Policy and the 2020/21 Directors’ Remuneration Report
at the October 2021 Annual General Meeting. Votes are shown both including and excluding the Company’s majority shareholder:
October 2021– Approval of Directors’ Remuneration Policy
Including majority shareholder
Excluding majority shareholder
No. of votes
‘For’ and
‘Discretionary’
395,127,965
132,162,051
% of
votes cast
90.52
76.16
No. of votes
‘Against’
41,372,471
41,372,471
% of
votes cast
9.48
23.842
Total no. of
votes cast
436,500,436
173,534,522
% of total
shareholders
eligible to vote
93.18
84.46
No. of votes
‘Withheld’1
29,918
29,918
1. A vote ‘withheld’ is not a vote in law.
2. The Committee noted that whilst over 90% of all voting shareholders voted for the new Policy, over 20% of voting shareholders excluding the majority shareholder
voted against it. The only substantive change to the Policy from the Remuneration Policy approved the previous year (in November 2020) was the inclusion of the
Recovery Incentive Scheme. The Committee reflected on the level of votes against and concluded that this remained an appropriate one-off mechanism to align the
interests of Executive Directors with business strategy and shareholder interests in exceptional circumstances coming out of COVID-19 and it was satisfied that it
had appropriately engaged with major shareholders in respect of the proposal, and taken their feedback into account. It should also be noted that, as a result of
Company performance against the challenging financial targets set by the Committee, the Chief Executive’s award has lapsed.
October 2021 – 2021 annual report on Directors’ remuneration
No. of votes
‘For’ and
‘Discretionary’
432,954,734
169,988,820
% of
votes cast
99.19
97.96
No. of votes
‘Against’
3,533,808
3,533,808
% of
votes cast
0.81
2.04
Total no. of
votes cast
436,488,542
173,522,628
% of total
shareholders
eligible to vote
93.18
84.45
No. of votes
‘Withheld’1
41,812
41,812
Including majority shareholder
Excluding majority shareholder
1. A vote ‘withheld’ is not a vote in law.
During the 2021/22 financial year, the Chair of the Committee engaged with our major shareholders (representing 92.18% of shares
as at 30 June 2021) in relation to the introduction of the one-off Recovery Incentive Scheme. Feedback from shareholders was taken
into account when finalising the scheme.
Implementation of policy in 2022/23 (Unaudited)
Salaries
Salaries will be reviewed during the year with the current expectation that any changes will be effective 1 April 2023. Current base
salaries are as follows:
– John O’Reilly – £515,000
– Richard Harris – £353,000
Pension policy
There will be no change to pension arrangements:
– John O’Reilly – 10% of contracted salary (less lower earnings limit)
– Richard Harris – 3% of contracted salary (less lower earnings limit),
save that with effect from 1 January 2023, John O’Reilly’s payments in lieu of pension will be 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 available to the majority
of the wider workforce (currently 3%).
141
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Annual Report on Remuneration
Continued
Annual bonus
The maximum bonus potential for the Chief Executive is 150% of salary, and 120% of salary for the Chief Financial Officer.
Performance will continue to be based on stretching targets. Financial targets representing 85% of the maximum bonus opportunity will
be based on adjusted earnings before interest and tax and non-financial measures to represent 15% of the maximum bonus opportunity
will be based on specific Environmental, Social and Governance (ESG) targets. 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 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 the Chief Executive and 80% of salary for the Chief Financial Officer will be deferred
into shares under the deferred bonus plan for two years. The remainder will be payable in cash.
Long-term incentive
It is anticipated that an annual award will be made to Executive Directors in 2022/23. 40% of the award will vest by reference to
relative total shareholder return, 30% will vest by reference to underlying earnings per share growth and 30% will vest by reference
to strategic measures. It is intended that 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 of this report.
The performance conditions will be based on performance in the 2024/2025 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.
TSR
Underlying EPS
Strategic Measures
Total
Weighting
40%
30%
10%
10%
10%
100%
Threshold target
Median
11.8p
Stretch target
Outperform median by
25%
18.3p or higher
Group EBIT Margin (%)
Interactive NGR (£m)
Venues NGR (£m)
Threshold vesting (% of max)
10%
7.5%
2.5%
2.5%
2.5%
25%
Non-Executive Director fees
Non-Executive Director annual base and additional fees effective 1 April 2022 comprise:
Board Chair
Base Non-Executive annual fee
Audit Committee Chair
Remuneration Committee Chair
ESG and Safer Gambling Committee Chair
Senior Independent Director
Fee
£160,000
£50,000
£9,000
£7,500
£3,500
£2,500
1. The above fees have 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. The fees were reviewed again during the year and the following changes were approved by the
Remuneration Committee in respect of the Chair and by the Finance Committee in respect of the Non-Executive Directors, but were not implemented due to the
performance of the Company: (i) Chair: £175,000 (9%), (ii) Base Non-Executive annual fee: £52,000 (4%), (iii) Remuneration Committee Chair: £9,000 (20%),
(v) ESG and Safer Gambling Committee Chair: £9,000 (157%), and (vi) Senior Independent Director: £6,000 (140%). No change was proposed to the Audit Committee
Chair fee. The date for implementation of such increases will be considered again in November 2022, save in respect of the Chair, where the date for implementation
will be 1 April 2023.
142
The Rank Group PlcAnnual Report 2022 Directors’ Report
The Directors present their report together with the audited consolidated financial statements for the year ended 30 June 2022.
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 2022.
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
Business description
Location in Strategic Report
Our business
Business objectives, strategies and likely future developments
Our strategy
Corporate responsibility: employees and community
(including hiring, continuing employment and training,
career development and promotion of disabled persons)
Diversity
Dividends
Stakeholder engagement
Going concern and viability statement
Greenhouse gas emissions
Particulars of important events affecting the Company and
its subsidiary undertakings occurring after the year end
Principal risks and uncertainties
Profits
Research and development
Our approach to ESG
Colleagues
Chair’s letter
Stakeholder engagement
Compliance statements
Environment
Chair’s letter and Chief Executive’s review
Risk management
CFO’s review
Our strategy
Customers and customer insights
Stakeholder engagement
Page number
Inside cover
and 14
40 to 51
52 to 53
54 to 71
61
13
35 to 39
82 to 83
69 to 70
13 and
16 to 25
74 to 81
26 to 27
40 to 51
55 to 59
35 to 39
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 144. There are no other disclosures required under this Listing Rule.
Directors
The Directors who served during the period under review are:
Name
Chris Bell
Lucinda Charles-Jones
Chew Seong Aun
Steven Esom
Bill Floydd
Richard Harris
Susan Hooper
Katie McAlister
John O’Reilly
Alex Thursby
Karen Whitworth
Position
Senior Independent Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
Chief Financial Officer
Non-Executive Director
Non-Executive Director
Chief Executive
Chair
Non-Executive Director and Senior
Independent Director
Notes
Stepped down from the Board on 18 January 2022
Appointed to the Board 22 June 2022
Stepped down from the Board on 31 December 2021
Appointed to the Board on 1 May 2022
Stepped down from the Board on 31 January 2022
Appointed Senior Independent Director on 18 January 2022
143
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Directors’ Report
Continued
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 2022 was £180m (£180m as at 30 June 2021), divided into 1,296,000,000 ordinary
shares of 138/9p 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 2021), which were held by 9,296 registered
shareholders (9,569 as at 30 June 2021). Details of movements in issued share capital can be found in note 25 of the Financial
Statements.
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 1,000,000
1,000,001 and above
Totals
Total no. of
registered
shareholders
8,007
945
97
152
66
29
9,296
Total no. of
shares
% of holders
1,419,858
86.13
1,927,514
10.17
665,784
1.04
1.64
5,178,504
0.71 26,457,683
0.31 432,780,198
100.00% 468,429,541
% of issued
share capital
0.30
0.41
0.14
1.11
5.65
92.39
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.
As at 30 June 2022 and as at the date
of this report, GuoLine’s interest is held
as follows:
– 52.04% – Rank Assets Limited, a
wholly-owned subsidiary of Guoco;
– 4.09% – GuoLine Overseas Limited.
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.
144
The Rank Group PlcAnnual Report 2022 Interests of 3% or more
As at 30 June 2022 and 31 July 2022 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 CA 2006 notices issued by the Company.
Shareholder
GuoLine Capital Assets Limited
Ameriprise Financial, Inc. and its group of companies
(Threadneedle Retail Funds – Linked Strategies)
Aberforth Partners
M&G Investments
abrdn
Polar Capital
As at 30 June 2022
As at 31 July 2022
% held
Voting rights
56.14 262,965,914
% held
Voting rights
56.14 262,965,914
9.35
5.56
4.16
3.18
3.18
43,782,766
26,042,835
19,474,112
14,897,367
14,877,630
9.35
5.56
3.95
3.19
3.18
43,792,901
26,042,835
18,485,070
14,936,818
14,877,630
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 FCA’s DTRs. 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.
Shareholder
GuoLine Capital Assets Limited
Hong Leong Company (Malaysia) Berhad
Ameriprise Financial, Inc. and its group of companies
Artemis Investment Management LLP
Aberforth Partners
M&G Plc
Date last notified under DTR
19 April 2021
19 April 2021
10 December 2015
31 May 2017
11 May 2022
18 May 2022
As per FCA DTRs disclosures
as at 17 August 2022
% held
Voting rights
56.10% 262,770,914
0.04%
195,000
7.65% 29,870,389
4.94%
19,287,793
5.13% 24,032,891
4.94% 23,169,044
Under LR 6.1.19 R, 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 2022
was 28.50% (27.68% as at 30 June 2021).
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.
145
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 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 Group General
Counsel & 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.
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
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.
Luisa Wright
Group General Counsel & Company
Secretary
17 August 2022
146
The Rank Group PlcAnnual Report 2022 Directors’ Responsibilities
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 95
to 96 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
17 August 2022
147
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 148
The Rank Group PlcAnnual Report 2022 Financial statements
In this section:
We have set out our financial statements
for the year ended 30 June 2022,
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 2022.
Shareholder information can be found
on page 213.
150 Independent auditor’s report
160 Group income statement
161 Group statement of comprehensive
income
162 Balance sheets
164 Statements of changes in equity
166 Statements of cash flow
167 Notes to the financial statements
212 Five-year review
213 Shareholder information
149
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview 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 2023 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 2023
and considered the existence of any
significant events or conditions beyond
this period based on the Group’s
long-range plan and knowledge
arising from other areas of the audit;
– 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 and continued
recovery post COVID-19 has been
modelled. We performed reverse stress
testing to understand how severe the
downside scenario would need to be
to result in negative liquidity or a
covenant breach. The assessment
reflects all maturing debt through
to 31 August 2023;
– We understood 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;
– The audit procedures performed in
evaluating the Directors’ 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.
Independent auditor’s report
To the members of The Rank Group Plc
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 2022
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 2022 which comprise:
Parent company
Balance sheet as
at 30 June 2022
Statement of
changes in equity
for the year then
ended
Related notes 1 to
35 to the financial
statements
including a
summary of
significant
accounting policies
Group
Consolidated
balance sheet as
at 30 June 2022
Consolidated
income statement
for the year then
ended
Consolidated
statement of
comprehensive
income for the year
then ended
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
150
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 Company 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;
The Rank Group PlcAnnual Report 2022
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 2023.
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.
– We performed an audit of the complete
financial information of six components
and audit procedures on specific balances
for a further twenty-two components.
– The components where we performed
full or specific audit procedures
accounted for 100% of Revenue, 96% of
Profit before tax and 99% of Total assets.
– Impairment and impairment reversal
of tangible and intangible assets
– Compliance with laws and regulations
– Revenue recognition including the risk
of management override
– Overall Group materiality of £3.5m
which represents 0.5% of revenue.
Bank covenant compliance
– We obtained all the Group’s
Our key observations
– The Directors’ assessment forecasts
that the Group will maintain sufficient
liquidity throughout the going concern
assessment period. This included two
downside scenarios with severe but
plausible declines in revenue and
increased inflationary impacts.
– The severe downside scenario assumed
full repayment of scheduled debt
repayments over the going concern
period, no new refinancing over the
going concern period, a central
contingency reduction against budget
performance, offset by mitigating
actions within managements control.
Management consider such a scenario
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, or
through external fund raising, or a
combination of both during the going
concern period. The Group’s principal
source of funding extends beyond the
going concern period (to 2024/2025).
Overview of our audit approach
Audit scope
Key audit matters
Materiality
borrowing facility agreements and
performed a detailed examination
of all agreements, to assess their
continued availability to the Group
throughout the going concern period.
We inspected all borrowing facility
agreements to ensure completeness of
covenants identified by management.
We checked the accuracy of
management’s covenant forecast
model on the base case, verifying
inputs to board approved forecasts
and facility agreement terms;
– We considered the adequacy of
forecast liquidity as per the base case
and downside forecast and applied
sensitivity analysis;
– 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 risk scenario 1 and downside
risk scenario 2 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
scenario based on our understanding
of the Group and the sector, including
considering whether those mitigating
actions were controllable by
management.
Disclosures
– We assessed the appropriateness
of the going concern disclosures in
describing the risks associated with
the Group’s ability to continue as a
going concern for the period up to
the 31 August 2023.
151
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview
Independent auditor’s report
Continued
An overview of the scope of the
Parent company and Group audits
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 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-eight reporting components
of the Group, we selected twenty-eight
components covering entities within
United Kingdom, Alderney, Malta, Spain,
Gibraltar, Mauritius, and India, which
represent the principal business units
within the Group.
Of the twenty-eight components selected,
we performed an audit of the complete
financial information of six components
(‘full scope components’) which were
selected based on their size or risk
characteristics. For the remaining
twenty-two components (‘specific scope/
specified procedures 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% (2021: 99%) of the Group’s revenue,
87% (2021: N/A) of the Group’s profit
before tax and 97% (2021: 99%) of the
Group’s Total assets. For the current year,
the full scope components contributed
86% (2021: 83%) of the Group’s revenue,
64% (2021: N/A) of the Group’s profit
before tax and 70% (2021: 75%) of the
Group’s Total assets. The specific scope
components contributed 13% (2021: 16%)
of the Group’s revenue, 23% (2021: N/A)
of the Group’s profit before tax and 27%
(2021: 24%) 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 performed specified procedures on
cash and overhead expenses for three
components. The procedures performed
included, independent confirmation of
cash, vouching expenses to invoice and
analytical reviews. For one of these
components the Primary Team also
performed specified procedures over
certain aspects of revenue, as described
in the Risk section above.
The remaining twenty components
together represent less than 0.1% 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
There have been minimal changes in
scoping from the prior year. There have
been some modifications to specific scope
entities to reflect higher levels of activity
within certain entities compared to the
prior period to maintain appropriate
coverage.
Revenue
Full scope 86%
Specific scope 13%
Specified procedures 1%
Other 0%
Assets
Full scope 70%
Specific scope 27%
Specified procedures 2%
Other 1%
Profit before tax
Full scope 64%
Specific scope 23%
Specified procedures 9%
Other 6%
152
The Rank Group PlcAnnual Report 2022 Climate change
There has been increasing interest from
stakeholders as to how climate change will
impact The Rank Group Plc. The Group
has determined that the most significant
future impacts from climate change on
their operations will be primarily as a
result of increased cost of energy. These
are explained on pages 63-70 in the
required Task Force for Climate related
Financial Disclosures and on page 76 in
the principal risks and uncertainties,
which form part of the ‘Other information’,
rather than the audited financial
statements. Our procedures on these
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.
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
in their assessment of going concern and
viability and associated disclosures.
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.
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 and non-EY audit firms operating
under our instruction. For six full scope
components and eighteen of the specific
scope components, audit procedures were
performed directly by the primary audit
team. For the four 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 and senior team members visit two
of the four specific scope locations each
year. During the current year’s audit cycle,
visits were undertaken by the primary audit
team to the EY component team in Spain
and the Grant Thornton component team in
Mauritius. These visits involved discussing
the audit approach with the component
team and any issues arising from their
work, meeting with local management,
attending planning and closing meetings,
reviewing relevant audit working papers
on relevant risk areas and performing a site
visit of a club in Spain. 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.
153
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Key observations communicated
to the Audit Committee
Based on our audit
procedures we have
concluded the impairment
charge of £47.8 million and
the impairment reversal
of £22.0 million was
recognised appropriately.
We highlighted that a
reasonably possible change
in certain key assumptions,
including revenue recovery
assumptions post-
COVID-19, short term
growth rates, change in
discount rate, 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.
Independent auditor’s report
Continued
Risk
Impairment and impairment
reversal of tangible and
intangible assets could be
materially misstated.
Impairment charge of
£47.8 million (2021:nil)
and impairment reversal
of £22.0 million (2021: nil)
Refer to the Audit Committee
Report (page 107); Accounting
policies (page 167); and note 14
of the Consolidated Financial
Statements (page 188)
At 30 June 2022 the carrying
value of tangible and intangible
assets was £708.3 million
(2021: £750.6 million), £438.9
million (2021: £435.3 million)
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. There are
indicators of impairment and
impairment reversals across
venues as the venues reopened
and trading activity re-built
following the impact on the
venues of the closure periods
and restrictions arising
from COVID-19.
The main assumptions used
in the impairment assessment
are revenue recovery post
COVID-19 short-term growth
rates, assumed future cost
increases and the discount
rate, earnings multiples and
the long-term growth rate.
In the prior year, no
impairment or reversal of
impairment was recognised
as venues continued to be
impacted by COVID-19
restrictions or in some cases
closures and the related
recoveries post re-opening
remained at an early stage.
154
Our response to the risk
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.
We confirmed the mathematical accuracy of the models.
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 pre-COVID-19 performance.
In addition, we considered the forecasts against performance
since reopening the venues post-lockdown and third party future
economic forecasts incorporating the increase in cost of living
impacting consumer spending for the UK and Spanish economies.
We corroborated forecasts to budgets approved by the Board.
– We re-performed 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.
– We also 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 recovery post-COVID-19, short-term growth rates,
discount rate, EBITDA multiple and long-term growth rates.
We have corroborated that the reasonable possible change
assumptions applied by management are reasonable by
comparing the underlying assumptions to external data such
as economic and industry forecasts. We re-performed the models
to ensure that there 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 trading 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.
In addition, we worked with our EY internal valuation
specialists to:
– Independently validated and corroborated the discount rates
applied by management to supporting evidence and benchmark
the discount rates to industry averages/trends.
The Rank Group PlcAnnual Report 2022 Key observations communicated
to the Audit Committee
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.
Our response to the risk
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 2022.
– We inquired of management and the Group’s internal 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.
– 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.
– We read the customer complaint log and assessed how matters
raised were concluded on.
– Engaged EY gaming tax and legal specialists to assist us
in understanding the risks in respect of gaming duties in
jurisdictions where the appropriate tax treatment is uncertain.
– 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.
– Assessed appropriateness of disclosures in the Annual Report and
Accounts by comparing the disclosures against the requirements
under International Financial Reporting Standards.
Risk
Compliance with laws
and regulations
Refer to the Audit Committee
Report (page 107); Accounting
policies (page 173); and note 33
of the Consolidated Financial
Statements (page 210)
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.
The risk relating to compliance
with laws and regulations
increased during 2021/22
(please refer to the risk
management strategy
on page 74)
155
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Independent auditor’s report
Continued
Risk
Revenue recognition
including the risk of
management override
(£644.0 million,
2021: £329.6 million)
Our response to the risk
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.
Key observations communicated
to the Audit Committee
Based on our audit
procedures we concluded
that revenue, and
adjustments to revenue, are
appropriately recognised
and recorded.
Refer to the Audit Committee
Report (page 107); Accounting
policies (page 167); and note 2
of the Consolidated Financial
Statements (page 176)
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.
We updated our understanding of the revenue processes and tested
certain key financial and IT controls over the recognition and
measurement of revenue in 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 99.3% 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. The
remaining 0.7% of revenue was substantively tested
– For a sample 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 thirty-two 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 re-perform 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.
In the prior year, our auditor’s report included a key audit matter in relation to going concern. In the current year, the cash position has
strengthened due to the receipt of net £77 million in relation to the HMRC VAT case, £8.8 million in connection to Belgium sale in the
prior year and the clubs trading for the majority of the year. As such, we do not consider going concern to be a key audit matter for the
current year audit.
156
The Rank Group PlcAnnual Report 2022 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.
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 (2021: £2.3 million),
which is 0.5% revenue (2021: 0.7%) 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 (2021:
£7.0 million), which is 1% (2021: 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%
(2021: 50%) of our planning materiality,
namely £1.8 million (2021: £1.2 million).
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.
157
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 £0.4 million to £1.1
million (2021: £0.2 million to £0.6 million).
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 £0.2 million
(2021: £0.1 million), 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 149, including the
five-year review and the shareholder
information set out on pages 212 to 214,
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.
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Independent auditor’s report
Continued
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 set out
on page 82;
– 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 82;
– 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 82;
– Directors’ statement on fair, balanced
and understandable set out on page 109;
– Board’s confirmation that it has carried
out a robust assessment of the emerging
and principal risks set out on page 83;
– The section of the Annual Report that
describes the review of effectiveness of
risk management and internal control
systems set out on page; and;
– The section describing the work of the
Audit Committee set out on page 107.
Responsibilities of Directors
As explained more fully in the Directors’
Responsibilities Statement set out on page
147, 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.
158
The Rank Group PlcAnnual Report 2022 – 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 as a 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 Group’s
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 thirteen
years, covering the years ending
31 December 2010 to 30 June 2022.
– 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.
– 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
18 August 2022
159
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Group income statement
for the year ended 30 June 2022
Year ended 30 June 2022
Year ended 30 June 2021
Separately
disclosed
items (note 4)
£m
Underlying
£m
Total
£m
Underlying
£m
Separately
disclosed
items (note 4)
£m
644.0
(386.5)
257.5
3.6
(221.3)
39.8
(13.1)
0.1
(0.4)
(13.4)
26.4
(6.4)
20.0
–
20.0
20.0
–
20.0
4.3p
4.3p
4.3p
4.3p
–
–
–
(25.8)
(25.8)
88.3
(20.2)
42.3
–
–
5.6
5.6
47.9
(10.5)
37.4
8.8
46.2
46.2
–
46.2
9.9p
9.9p
8.0p
8.0p
1.9p
1.9p
644.0
(412.3)
231.7
91.9
(241.5)
82.1
(13.1)
0.1
5.2
(7.8)
74.3
(16.9)
57.4
8.8
66.2
66.2
–
66.2
14.2p
14.2p
12.3p
12.3p
1.9p
1.9p
329.6
(305.4)
24.2
64.4
(173.1)
(84.5)
(14.0)
0.1
(0.5)
(14.4)
(98.9)
10.1
(88.8)
1.1
(87.7)
(87.8)
0.1
(87.7)
–
–
–
–
(8.4)
(8.4)
–
–
–
–
(8.4)
0.3
(8.1)
23.8
15.7
15.7
–
15.7
Total
£m
329.6
(305.4)
24.2
64.4
(181.5)
(92.9)
(14.0)
0.1
(0.5)
(14.4)
(107.3)
10.4
(96.9)
24.9
(72.0)
(72.1)
0.1
(72.0)
(20.1)p
(20.1)p
3.6p
3.6p
(16.5)p
(16.5)p
(20.3)p
(20.3)p
(1.9)p
(1.9)p
(22.2)p
(22.2)p
0.2p
0.2p
5.5p
5.5p
5.7p
5.7p
Continuing operations
Revenue
Cost of sales
Gross profit
Other operating income
Other operating costs
Group operating profit (loss)
Financing:
– finance costs
– finance income
– other financial (losses) gains
Total net financing (charge) income
Profit (loss) before taxation
Taxation
Profit (loss) for the year from
continuing operations
Discontinued operations – profit
Profit (loss) for the year
Attributable to:
Equity holders of the parent
Non-controlling interest
Earnings (loss) per share
attributable to equity shareholders
– basic
– diluted
Earnings (loss) per share –
continuing operations
– basic
– diluted
Earnings per share – discontinued
operations
– basic
– diluted
Note
2
2,18
2,3
5
6
8
10
10
10
10
10
10
160
The Rank Group PlcAnnual Report 2022 Group statement of comprehensive income
for the year ended 30 June 2022
Comprehensive income:
Profit (loss) for the year
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange adjustments net of tax
Items that may not be reclassified subsequently to profit or loss:
Actuarial gain on retirement benefits net of tax
Total comprehensive income (loss) for the year
Attributable to:
Equity holders of the parent
Non-controlling interest
The tax effect of items of comprehensive income is disclosed in note 6.
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
Note
66.2
(72.0)
31
–
0.1
66.3
66.3
–
66.3
(4.2)
0.2
(76.0)
(76.1)
0.1
(76.0)
161
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Group
Company
As at
30 June
2022
£m
As at
30 June
2021
£m
As at
30 June
2022
£m
As at
30 June
2021
£m
Note
11
12
13
15
23
17
16
17
18
20
27
19
32
20
21
21
24
19
32
21
23
24
31
493.6
113.1
101.6
–
1.4
6.7
716.4
2.3
34.2
–
8.1
97.9
142.5
504.6
117.4
128.6
–
3.6
5.1
759.3
2.0
16.3
0.8
10.1
69.6
98.8
–
–
–
1,131.8
–
–
1,131.8
–
–
–
–
–
–
–
–
–
1,131.8
–
–
1,131.8
–
–
–
–
–
–
858.9
858.1
1,131.8
1,131.8
(131.1)
(40.4)
(4.2)
–
(33.9)
(6.9)
(216.5)
(74.0)
–
(141.3)
(44.1)
(20.5)
(5.6)
(3.6)
(215.1)
(431.6)
(126.3)
(42.2)
(3.1)
–
(39.4)
(5.4)
(216.4)
(117.6)
–
(164.7)
(77.7)
(18.3)
(16.0)
(3.8)
(280.5)
(496.9)
(0.4)
–
–
(2.6)
(387.1)
(0.1)
(390.2)
(390.2)
–
–
–
–
(0.9)
–
(0.9)
(391.1)
(0.6)
–
–
(3.1)
(371.9)
(0.1)
(375.7)
(375.7)
–
–
–
–
(0.9)
–
(0.9)
(376.6)
427.3
361.2
740.7
755.2
Balance sheets
at 30 June 2022
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments in subsidiaries
Deferred tax assets
Other receivables
Current assets
Inventories
Other receivables
Government grants
Income tax receivable
Cash and short-term deposits
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Income tax payable
Financial liabilities
– financial guarantees
– loans and borrowings
Provisions
Net current liabilities
Non-current liabilities
Trade and other payables
Lease liabilities
Financial liabilities
– loans and borrowings
Deferred tax liabilities
Provisions
Retirement benefit obligations
Total liabilities
Net assets
162
The Rank Group PlcAnnual Report 2022 Capital and reserves attributable to the Company’s equity
shareholders
Share capital
Share premium
Capital redemption reserve
Exchange translation reserve
Retained earnings
Total equity before non-controlling interest
Non-controlling interest
Total shareholders’ equity
Group
Company
As at
30 June
2022
£m
As at
30 June
2021
£m
As at
30 June
2022
£m
As at
30 June
2021
£m
65.0
155.7
33.4
14.6
158.7
427.4
(0.1)
427.3
65.0
155.7
33.4
14.6
92.6
361.3
(0.1)
361.2
65.0
155.7
33.4
–
486.6
740.7
–
740.7
65.0
155.7
33.4
–
501.1
755.2
–
755.2
Note
25
25
15
The loss for the year ended 30 June 2022 for the Company was £14.5m (year ended 30 June 2021: loss of £7.9m).
These financial statements were approved by the Board on 17 August 2022 and signed on its behalf by:
John O’Reilly
Chief Executive
Richard Harris
Chief Financial Officer
163
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Statements of changes in equity
for the year ended 30 June 2022
Group
At 1 July 2020
Comprehensive income:
(Loss) profit for the year
Other comprehensive
income:
Exchange adjustments
net of tax
Actuarial gain on
retirement benefits
net of tax
Total comprehensive
(loss) income for the year
IFRS 16 adoption deferred
tax adjustment1
Issue of share capital
(see note 25)
Transactions with owners:
Debit in respect of
employee share schemes
including tax
At 30 June 2021
Comprehensive income:
Profit for the year
Other comprehensive
income:
Exchange adjustments
net of tax
Actuarial gain on
retirement benefits
net of tax
Total comprehensive
income for the year
Transactions with owners:
Debit in respect of
employee share schemes
including tax
At 30 June 2022
Share
capital
£m
54.2
Share
premium
£m
98.4
Capital
redemption
reserve
£m
33.4
Exchange
translation
reserve
£m
18.8
Reserves
attributable
to the Group’s
equity
shareholders
£m
366.1
Retained
earnings
(loss)
£m
161.3
Non-
controlling
interest
£m
(0.2)
Total
equity
£m
365.9
–
–
–
–
–
–
–
–
–
–
10.8
57.3
–
–
–
–
–
–
–
(72.1)
(72.1)
0.1
(72.0)
(4.2)
–
(4.2)
–
0.2
0.2
–
–
(4.2)
0.2
(4.2)
(71.9)
(76.1)
0.1
(76.0)
–
–
3.4
–
3.4
68.1
–
–
3.4
68.1
–
65.0
–
155.7
–
33.4
–
14.6
(0.2)
92.6
(0.2)
361.3
–
(0.1)
(0.2)
361.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
66.2
66.2
–
–
0.1
0.1
66.3
66.3
–
–
–
–
66.2
–
0.1
66.3
–
65.0
–
155.7
–
33.4
–
14.6
(0.2)
158.7
(0.2)
427.4
–
(0.1)
(0.2)
427.3
1. Year ended 30 June 2021 adjustment relating to deferred tax on lease balances that was not considered material by the Directors.
164
The Rank Group PlcAnnual Report 2022 Company
At 1 July 2020
Loss and total
comprehensive expense
for the year
Issue of share capital
(see note 25)
At 30 June 2021
Loss and total
comprehensive expense
for the year
Share
capital
£m
54.2
Share
premium
£m
98.4
Capital
redemption
reserve
£m
33.4
Exchange
translation
reserve
£m
–
Retained
earnings
(losses)
£m
509.0
Reserves
attributable
to the
Company’s
equity
shareholders
£m
509.0
Non-
controlling
interest
£m
–
–
10.8
65.0
–
57.3
155.7
–
–
33.4
–
–
–
–
–
–
–
–
(7.9)
(7.9)
–
501.1
–
501.1
(14.5)
(14.5)
486.6
486.6
–
–
–
–
–
Total
equity
£m
695.0
(7.9)
68.1
755.2
(14.5)
740.7
At 30 June 2022
65.0
155.7
33.4
165
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Statements of cash flow
for the year ended 30 June 2022
Cash flows from operating activities
Cash generated from (used in) operations
Interest received
Interest paid
Tax paid
Net cash generated from (used in) operating activities
Cash flows from investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Proceeds from sale of business
Acquisition of a subsidiary, net of cash acquired
Net cash (used in) generated from investing activities
Cash flows from financing activities
Issue of share capital
Repayment of term loans
(Repayment) drawdown of revolving credit facilities
Lease principal payments
Net cash (used in) generated from financing activities
Net increase (decrease) in cash and short-term deposits
Effect of exchange rate changes
Cash and short-term deposits at start of year
Cash and short-term deposits at end of year
Group
Company
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
171.3
5.8
(12.1)
(9.9)
155.1
(14.5)
(26.1)
8.8
(0.6)
(32.4)
–
(29.6)
(11.0)
(53.7)
(94.3)
28.4
(0.1)
69.6
97.9
(15.3)
0.1
(15.0)
(1.4)
(31.6)
(15.9)
(6.3)
25.2
–
3.0
68.1
(19.7)
11.0
(31.8)
27.6
(1.0)
(0.5)
71.1
69.6
15.5
–
(15.5)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Note
26
8
27
166
The Rank Group PlcAnnual Report 2022 Notes to the financial statements
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 2022 were
authorised for issue in accordance
with a resolution of the Directors
on 17 August 2022.
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 15.
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 27, including the budget
for 2022/23 (‘the base case’), and recent
trading performance, and have reviewed
the Group’s projected compliance with its
banking covenants and access to funding
options for the 12 months ending 31 August
2023 for the going concern period.
167
The Directors recognise that there is
uncertainty at this time caused by the
slower than anticipated return of customers
to UK land-based leisure entertainment
venues, the impact of current geopolitical
influences on consumer sentiment and
disposable incomes, increase in inflation
rates and the overall impact on consumer
demand. The Directors note that this has
had an impact on the accuracy of budgeting
and forecasting in the 2021/22 financial
year, and with trading being weaker than
anticipated upon the reopening of venues,
this has been considered by management
when setting the base case for the 2022/23
financial year.
The Directors have reviewed and
challenged management’s assumptions on
the Group’s base case. Key considerations
are the assumptions on the levels of
customer visits in the venues businesses,
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
a pay rise is awarded in April 2023;
– Rent due during the 2022/23 financial
year is paid on time;
– All tax and duty is paid on time;
– Capital expenditure is in line with
strategic plans; and
– Standard payment terms are assumed
for supplier payments.
Allowance is made for one-off costs
associated with implementation of the
Group’s strategic plan.
The base case 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.
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:
– Term loan of £78.8m which reduces to
£44.4m in May 2023 due to a scheduled
loan repayment; and
– Revolving credit facilities (‘RCF’) of
£80.0m, reducing to £55.0m in July 2023.
At the date of approval of the consolidated
and Company financial statements, the
term loan was £78.8m and the £80.0m RCF
was undrawn.
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 at December 2022 and June
2023 and have available cash to meet
liabilities as they fall due.
Sensitivity Analysis
The base case plan reflects the Directors’
best estimate of the future prospects of the
business. 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 potential impact on the Group of a
combination of scenarios over and above
those included in the base case plan has
also been tested. The two downside
scenarios modelled are:
(i)
customer/depositor numbers and/or
average spend per visit are below base
case expectations, offset by direct cost
mitigations; and
(ii) as for scenario (i), but taking the
revenue decline across the Group
further to reflect more recent
performance in the last quarter of the
2021/22 financial year, along with a
5% inflationary impact on the variable
cost base, in addition to the 8%
already included in the base case, to
reflect additional impact on underlying
costs due to geopolitical influences and
pressures on consumers’ disposable
incomes, offset by reduction in
controllable operating costs.
Having modelled the downside scenarios,
the indication is that the Group would
continue to meet its Covenants in both cases
and have available cash to meet liabilities.
Accordingly, the Directors have a
reasonable expectation that the Group
has adequate resources to continue in
operational existence for a period at least
through 31 August 2023. 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.
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
1 General information and
accounting policies (continued)
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 2023. 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 two
downside scenarios which reflect a reduced
trading performance and inflationary
impacts on the cost base. In these events,
the Group will generate sufficient cash
to meet its liabilities as they fall due and
meet covenant requirements for the period
to 31 August 2023.
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 or in the period of the
revision and future periods if the revision
affects both current 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 impairment charges;
– Property-related provisions;
– Restructuring costs as part of an
announced programme;
– Retranslation and remeasurement
of foreign currency contingent
consideration;
– Discontinued operations; 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.
(c) Dilapidation costs
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.
168
(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 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 14.
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 14.
The Rank Group PlcAnnual Report 2022 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.
(b) Determination of the fair values
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 assets 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.
(c) 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 £3.9m (30 June 2021:
£7.0m receivable) are amounts of £0.3m
payable (30 June 2021: £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 20.
169
1.1.4 Changes in accounting policy
and disclosures
(a) Standards, amendments to and
interpretations of existing standards
adopted by the Group
Several new, and amendments to, existing
IFRS standards and interpretations, issued
by the IASB, were effective from 1 July
2021 and have been adopted by the Group
during the period with no significant
impact on the consolidated results or
financial position of the Group.
(b) Standards, amendments to and
interpretations of existing standards
that are not yet effective
The Group has not early adopted any
standard, amendment or interpretation
that was issued but is not yet effective.
1.2 Consolidation
The consolidated financial statements
comprise the financial statements of the
parent and its subsidiaries as at 30 June
2022. 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.
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
1 General information and
accounting policies (continued)
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.
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.
170
(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.
(c) Food, beverage and others
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.
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.
The Rank Group PlcAnnual Report 2022 (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:
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.
(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 2021: 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 1.21 (year ended 30 June 2021:
1.13); 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.
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.
(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.
171
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
1 General information and
accounting policies (continued)
(c) Financial guarantee contracts
(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.
172
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.
1.10 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 Rank Group PlcAnnual Report 2022 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.
Contingent liabilities are possible
obligations and present obligations
that are not probable or not reliably
measurable. Contingent liabilities are
disclosed but not accounted. 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
leasehold property
– Refurbishment of
property
– Fixtures, fittings,
plant and
machinery
50 years or
lease term if less
5 to 20 years or
lease term
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
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.
(c) Software and development
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.
(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
gaming licences
– Software and
development
– Brands
– Customer
relationships
10 years or
indefinite
3 to 5 years
10 years
4 years
173
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
1 General information and
accounting policies (continued)
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.
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.
174
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.
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.
(c) Bonus plans
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.
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.
The Rank Group PlcAnnual Report 2022 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 over the periods that the related
costs, for which it is intended to
compensate, are expensed.
1.16 Cash and short-term deposits
Cash comprises cash in hand and balances
with banks and on-demand deposits.
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.
(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.
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.
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.
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.
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.
(c) Sales tax
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.
175
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
2 Segmental reporting
(a) Segment information – operating segments
Continuing operations
Revenue
Other operating income
Underlying operating profit (loss)
Separately disclosed items
Segment result
Finance costs
Finance income
Other financial gain
Profit before taxation
Taxation
Profit for the year from continuing operations
Other segment items – continuing operations
Capital expenditure
Depreciation and amortisation
SDI from continuing operations
VAT claim – net of costs
Impairment charges
Impairment reversals
Property-related provisions
Amortisation of acquired intangible assets
Closure of venues
Integration costs
Gain on remeasurement of previously existing
interest in joint venture
Business transformation costs
Acquisition and disposal costs
Continuing operations
Revenue
Other operating income
Underlying operating profit (loss)
Separately disclosed items
Segment result
Finance costs
Finance income
Other financial losses
Loss before taxation
Taxation
Loss for the year from continuing operations
Other segment items – continuing operations
Capital expenditure
Depreciation and amortisation
SDI from continuing operations
Integration costs
Amortisation of acquired intangible assets
Property-related provisions
Business transformation costs
Closure of venues
Gaming duty refund
176
Year ended 30 June 2022
Grosvenor
Venues
£m
Mecca
Venues
£m
Enracha
Venues
£m
Central
Costs
£m
296.6
2.6
45.1
15.5
60.6
134.0
1.0
(0.8)
34.4
33.6
30.1
–
7.5
7.6
15.1
–
–
(30.7)
(0.7)
(31.4)
(14.0)
(32.4)
29.8
(26.9)
13.3
–
–
(0.7)
–
–
–
–
(8.0)
(15.1)
47.7
(20.9)
–
10.4
–
(2.8)
–
–
–
–
(1.1)
(1.3)
–
–
8.7
–
–
(1.1)
–
–
–
–
(2.3)
(5.4)
(0.4)
–
–
–
–
–
–
–
(0.3)
–
Year ended 30 June 2021
Grosvenor
Venues
£m
Mecca
Venues
£m
Enracha
Venues
£m
Central
Costs
£m
79.2
45.3
(40.7)
13.3
(27.4)
55.5
18.2
(18.9)
(3.8)
(22.7)
17.5
0.3
(0.2)
(0.6)
(0.8)
–
0.6
(27.9)
(2.8)
(30.7)
(2.3)
(32.9)
–
–
0.5
(0.8)
–
13.6
(2.1)
(16.4)
–
–
(0.7)
(1.0)
(2.1)
–
(1.0)
(1.5)
–
–
–
(0.6)
–
–
(3.5)
(5.8)
(0.3)
–
–
(2.5)
–
–
Digital
£m
183.3
–
18.7
(14.5)
4.2
(15.2)
(13.2)
–
–
–
–
(11.7)
–
(2.8)
0.8
(0.7)
(0.1)
Digital
£m
177.4
–
3.2
(14.5)
(11.3)
(13.3)
(13.7)
(2.0)
(11.8)
–
(0.7)
–
–
Total
£m
644.0
3.6
39.8
42.3
82.1
(13.1)
0.1
5.2
74.3
(16.9)
57.4
(40.6)
(67.4)
77.1
(47.8)
22.0
10.4
(11.7)
(4.6)
(2.8)
0.8
(1.0)
(0.1)
Total
£m
329.6
64.4
(84.5)
(8.4)
(92.9)
(14.0)
0.1
(0.5)
(107.3)
10.4
(96.9)
(22.2)
(70.3)
(2.3)
(11.8)
(0.2)
(5.6)
(2.1)
13.6
The Rank Group PlcAnnual Report 2022 The Group reports segmental information on the basis by which the chief operating decision-makers utilise internal reporting within
the business.
Following the sale of its Blankenberge Casino in Belgium in the prior year, Management refined the previously reported ‘International
Venues’ segment to ‘Enracha Venues’ which solely operates in Spain.
Other operating income for both periods 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
UK
Continental Europe
Rest of World
Total revenue
(ii) Non-current assets by geographical area based on location of assets
UK
Continental Europe
Total non-current assets
With the exception of the UK, no individual country contributed more than 15% of consolidated sales or assets.
(c) Total revenue and profit from operations
Year ended
30 June
2022
£m
588.7
51.0
4.3
644.0
Year ended
30 June
2021
£m
286.7
38.6
4.3
329.6
As at
30 June
2022
£m
641.3
75.1
716.4
As at
30 June
2021
£m
693.7
65.6
759.3
From continuing operations
From discontinued operations
(d) Total revenue by income stream
Revenue recognised under IFRS 9
Gaming win – Casino
Revenue recognised under IFRS 15
Gaming win – Bingo
Gaming win – Poker
Gaming win – other digital products
Food and beverage
Other
Total revenue recognised under IFRS 15
Total revenue
177
Revenue
Profit
Year ended
30 June
2022
£m
644.0
–
644.0
Year ended
30 June
2021
£m
329.6
4.6
334.2
Year ended
30 June
2022
£m
57.4
8.8
66.2
Year ended
30 June
2021
£m
(96.9)
24.9
(72.0)
Note
8
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
496.8
79.5
19.1
4.3
39.0
5.3
147.2
644.0
237.2
65.8
5.6
4.3
11.4
5.3
92.4
329.6
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
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:
Employment and related costs
Taxes and duties
Direct costs
Depreciation and amortisation
Marketing
Property costs
Other
Total costs before SDI
Cost of sales
Operating costs
Total costs before SDI
Employment and related costs
Taxes and duties
Direct costs
Depreciation and amortisation
Marketing
Property costs
Other
Total costs before SDI
Cost of sales
Operating costs
Total costs before SDI
Grosvenor
Venues
£m
103.9
60.5
23.6
32.4
5.9
8.7
19.1
254.1
Year ended 30 June 2022
Mecca
Venues
£m
43.0
25.1
19.9
15.1
5.8
4.5
22.4
135.8
Enracha
Venues
£m
14.6
1.6
2.4
1.3
1.7
0.6
0.4
22.6
Central
Costs
£m
19.9
1.4
–
5.4
0.1
1.7
2.2
30.7
Year ended 30 June 2021
Grosvenor
Venues
£m
85.1
21.4
10.6
32.9
2.0
3.4
9.8
165.2
Mecca Venues
£m
38.5
14.4
8.8
16.4
3.5
0.2
10.8
92.6
Enracha
Venues
£m
11.4
1.5
2.5
1.5
0.3
0.5
0.3
18.0
Central Costs
£m
19.5
0.6
–
5.8
–
1.6
1.0
28.5
Digital
£m
24.3
40.5
48.1
13.2
33.2
0.5
4.8
164.6
Digital
£m
20.5
42.2
53.0
13.7
35.4
0.9
8.5
174.2
Total
£m
205.7
129.1
94.0
67.4
46.7
16.0
48.9
607.8
386.5
221.3
607.8
Total
£m
175.0
80.1
74.9
70.3
41.2
6.6
30.4
478.5
305.4
173.1
478.5
The Group reports segmental information on the basis by which the chief operating decision-makers utilise internal reporting within
the business.
3 Profit for the year – analysis by nature
The following items have been charged in arriving at the profit (loss) for the year before financing and taxation from continuing
operations:
Employee benefit expense
Cost of inventories recognised as expense
Amortisation of intangibles
Depreciation
– owned assets (including £23.5m (year ended 30 June 2021: £27.7m) within cost of sales)
– right-of-use assets (including £24.9m (year ended 30 June 2021: £22.2m) within cost of sales)
Operating lease rentals payable – sub-lease income
Assets written off
SDI – operating (income) costs (see note 4)
Auditors’ remuneration for audit services
Year ended
30 June
2022
£m
189.9
18.7
15.4
Year ended
30 June
2021
£m
166.6
6.4
16.2
25.4
26.6
–
–
(42.3)
1.0
29.9
23.8
0.1
0.5
8.4
0.8
178
The Rank Group PlcAnnual Report 2022 In the year, the Group’s auditors, Ernst & Young LLP, including its network firms, earned the following fees:
Audit services
– Fees payable to the Company’s auditor for the parent company and consolidated financial statements
Other services
– Fees payable for the review of Group’s interim consolidated financial statements
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
1.0
–
1.0
0.8
–
0.8
£35,000 (year ended 30 June 2021: £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.
4 Separately disclosed items (SDIs)
Continuing operations
VAT claim – net of costs
Impairment charges
Impairment reversals
Property-related provision
Amortisation of acquired intangible assets
Closure of venues
Integration costs
Gain on remeasurement of previously existing interest in joint venture
Business transformation costs
Acquisition and disposal related costs
Gaming duty refund
Separately disclosed items1
Interest on VAT claim
Taxation
Separately disclosed items relating to continuing operations1
Separately disclosed items relating to discontinued operations1
Profit on disposal of business
Taxation
Total separately disclosed items1
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
Note
11, 12, 13
11, 12, 13
24
35
35
5
6
77.1
(47.8)
22.0
10.4
(11.7)
(4.7)
(2.8)
0.8
(0.9)
(0.1)
–
42.3
5.6
(10.5)
37.4
8.8
–
46.2
–
–
–
(0.2)
(11.8)
(2.1)
(2.3)
–
(5.6)
–
13.6
(8.4)
–
0.3
(8.1)
23.8
–
15.7
1. It is Group policy to reverse separately disclosed items in the same line as they were originally recognised.
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 is a positive
decision for the Group, HMRC have a number of avenues of appeal before this matter reaches 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 has been 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.
179
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
4 Separately disclosed items (continued)
Impairment charges and reversals
During the year, the Group recognised impairment charges of £47.8m relating to Grosvenor venues and Mecca clubs. The impairments
were recognised for various reasons, including lower than anticipated performance post-pandemic, low level of forecast earnings,
or a decision to close venues.
During the year, the Group also recognised a reversal of previously impaired assets of £22.0m relating to Grosvenor venues and
Enracha venues. The reversals were driven by better than anticipated performance and improved outlook in the identified Grosvenor
and Enracha venues.
The impairment and impairment reversals are material, non-cash and non-operational related items and as such, have been excluded
from underlying results.
Property-related provisions
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 current year, the Group have 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.
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 £11.7m (2021: £11.8m) relating to the acquired intangible assets of Stride, YoBingo and Rialto.
Closure of venues
During the current year, the Group made the decision to close a number of Mecca venues. £4.7m (2021: £2.1m) of costs relating to these
venues, including dilapidation repairs to which the assets were previously impaired and redundancy costs directly attributed to these
venues, had been expensed during the year.
These are material costs incurred outside of usual business activities and as such have been excluded from underlying results.
Integration costs
During the year, £2.8m of costs (2021: £2.3m) have been excluded from 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 is expected to migrate in September.
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.
Gain on remeasurement of previously existing interest in joint venture
During the 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 35.
The gain is infrequent in nature and does not represent underlying performance and has been excluded from underlying results.
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 is now expected to complete by 30 June 2023
extended from the previously targeted completion date of 31 December 2021 due to COVID-19.
The multi-year change programme is a material, infrequent programme and is not considered to be part of the underlying business
performance.
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 subsidiary. This has been presented as an SDI due to its one-off nature.
180
The Rank Group PlcAnnual Report 2022 Gaming duty refund
During the prior year, the Group successfully concluded the legal process to reclaim gaming duty on casino chips provided by the
casino to the player free of charge relating to the period from 2006 to 2013. This followed a judgement for another casino operator,
which stated that free chips should not be included in the calculation of gross gaming yield for gaming duty purposes. The amount
recognised of £13.6m was the gaming duty claim of £13.3m plus interest received of £0.3m.
These have been removed from underlying operating results as they are material, infrequent in nature and do not represent
underlying performance. This income was classified within operating costs which is where the costs were previously deducted.
Profit on sale 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 the underlying operating results.
The Belgium casino sale was reported in the Annual Report and Accounts at 30 June 2021 at a profit of £23.8m. On 2 August 2021
and subsequent to the sale, the Group was advised by the buyer of the outcome of a salary moderation case, the outcome for which
was identified in the sale and purchase agreement as being retained in favour of the Group. This legal case has been found in favour
of the Group and accordingly on 6 August 2021, the Group received additional proceeds of €3.7m and a further €6.3m on 29 June 2022.
This has been recognised as an additional gain on sale of the subsidiary.
The Group also made the decision to release £0.2m of the warranty provision associated with the Belgium casino sale due to passage
of time, see note 24.
Taxation
The tax impact of all of the above items are also considered not to be part of the underlying operations of the Group.
5 Financing
Continuing operations
Finance costs:
Interest on debt and borrowings
Amortisation of issue costs on borrowings
Interest payable on leases
Total finance costs
Finance income:
Interest income on net investments in leases
Interest income on short-term bank deposits
Total finance income
Other financial losses
Total net financing charge before SDIs
SDI – interest on VAT claim
Total net financing charge
Other financial losses include foreign exchange losses on loans and borrowings.
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
(4.5)
(1.9)
(6.7)
(13.1)
0.1
–
0.1
(4.0)
(2.2)
(7.8)
(14.0)
0.1
–
0.1
(0.4)
(0.5)
(13.4)
(14.4)
5.6
–
(7.8)
(14.4)
181
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
6 Taxation
Current income tax
Current income tax – UK
Current income tax – overseas
Current income tax on SDI
Amounts (under) over provided in previous period
Total current income tax (charge) credit
Deferred tax
Deferred tax – UK
Deferred tax – overseas
Restatement of deferred tax due to rate change
Deferred tax on SDI
Amounts over (under) provided in previous period
Total deferred tax (charge) credit (note 23)
Year ended
30 June
2022
£m
Year ended
30 June
2021
£m
(0.7)
(3.5)
(3.3)
(5.4)
(12.9)
0.2
(1.4)
(0.2)
(7.2)
4.6
(4.0)
6.7
(0.1)
(0.9)
1.4
7.1
4.9
2.7
(5.3)
1.2
(0.2)
3.3
Tax (charge) credit in the income statement
(16.9)
10.4
The tax on the Group’s profit before taxation differs from the standard rate of UK corporation tax in the period of 19.00% (year ended
30 June 2021: 19.00%). The differences are explained below:
Year ended
30 June
2022
£m
74.3
(14.1)
Year ended
30 June
2021
£m
(107.3)
20.4
0.8
(3.0)
(0.2)
(0.8)
0.4
(16.9)
(2.4)
(4.9)
(5.3)
1.2
1.4
10.4
Total
£m
–
–
–
1.1
0.3
0.5
1.0
(2.6)
0.3
Profit (loss) before taxation on continuing operations
Tax charge calculated at 19.00% on profit before taxation (year ended 30 June 2021: 19.00%)
Effects of:
Income (expenses) not deductible for tax purposes
Difference in overseas tax rates
Restatement of deferred tax due to rate change
Adjustments relating to prior periods
Deferred tax not recognised
Tax (charge) credit in the income statement
Tax on SDIs
The taxation impacts of SDIs are disclosed below:
VAT claim – net of costs
Net impairment charges
Property-related provisions
Amortisation of acquired intangible assets
Closure of venues
Integration costs
Business transformation costs
Gaming duty refund
Tax (charge) credit on SDI
Year ended 30 June 2022
Year ended 30 June 2021
Current
income tax
£m
(4.6)
1.3
(0.6)
–
0.5
0.1
–
–
(3.3)
Deferred
tax
£m
(11.1)
3.3
(1.4)
1.1
0.4
0.3
0.2
–
(7.2)
Total
£m
(15.7)
4.6
(2.0)
1.1
0.9
0.4
0.2
–
(10.5)
Current
income tax
£m
–
–
–
–
0.3
0.4
1.0
(2.6)
(0.9)
Deferred
tax
£m
–
–
–
1.1
–
0.1
–
–
1.2
182
The Rank Group PlcAnnual Report 2022 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. The Group notes recent developments in
relation to the OECD inclusive Framework on Base Erosion and Profit Shifting, with the new rules expected to apply to accounting
periods beginning on or after 31 December 2023. The Group does not expect these to have a material impact on the Group’s tax charge.
UK corporation tax is calculated at 19.00% (year ended 30 June 2021: 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.
On 20 July, the Government of Gibraltar announced the increase in the main rate of corporation tax from 10.00% to 12.50% effective
from 1 August 2021.
Both of these rate increases 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 £14.5m (year ended 30 June 2021: loss of £7.9m).
8 Discontinued operations
(a) Description
On 29 October 2020, the Group announced the decision by the Board that it had entered into a contract of sale in respect of its
Blankenberge Casino in Belgium, a wholly-owned subsidiary. The sale of Blankenberge Casino was subject to regulatory approvals
by the Belgium Gaming Commission and Blankenberge City Council. With all regulatory approvals obtained, the sale completed
on 1 April 2021, and therefore was reported as a discontinued operation at 30 June 2021. Financial information relating to the
discontinued operation for the period to the date of disposal is set out below.
(b) Financial performance and cash flow information
Revenue
Cost of sales
Gross profit
Other operating costs
Underlying operating profit
Taxation
Underlying profit for the period from discontinued operations
Gain on sale of the subsidiary after taxation
Profit for the period from discontinued operation
Net cash inflow from operating activities
Net cash inflow from investing activities
Net cash inflow from subsidiary
Twelve
months ended
30 June
2022
£m
–
–
–
–
–
–
–
8.8
8.8
Nine months
ended
31 March
2021
£m
4.6
(0.7)
3.9
(2.4)
1.5
(0.4)
1.1
23.8
24.9
–
8.8
8.8
1.5
23.8
25.3
On 2 August 2021 and subsequent to the sale, the Group was advised by the buyer of the outcome of a salary moderation case the
outcome for which was identified in the sale and purchase agreement as being retained in favour of the Group. This legal case has
been found in favour of the Group and accordingly on 6 August 2021, the Group received additional proceeds of €3.7m and a further
€6.3m on 29 June 2022. This has been recognised as an additional gain on sale of the subsidiary.
183
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
8 Discontinued operations (continued)
(c) Details of the sale of the subsidiary
Enterprise value
Working capital
Total proceeds
Less:
Assets held for sale
Provision for warranties
Transaction costs
Foreign exchange
Gain on sale
Nine months
ended
31 March 2021
£m
25.0
0.2
25.2
(0.6)
(0.8)
(0.1)
0.1
23.8
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 additional profit on sale. During the year, the Group recognised £0.2m additional profit on sale within the SDI
of the consolidated Group income statement, see note 4.
We do not expect any tax to arise on the disposal as any gain on disposal is covered by the substantial shareholding exemption.
The carrying value of the assets and liabilities at the date of the sale are shown below in accordance with IFRS requirements.
Cash and short-term deposits remained an asset of the Group upon completion of the sale.
Assets
Intangible assets
Property, plant and equipment
Other receivables
Income tax receivable
Assets held for sale
Liabilities
Trade and other payables
Income tax payable
Liabilities directly associated with assets held for sale
Net assets directly associated with disposal group
As at
31 March
2021
£m
0.9
0.5
1.6
0.3
3.3
(2.7)
–
(2.7)
0.6
9 Dividends paid to equity holders
No dividend in respect of the year ended 30 June 2022 will be recommended at the Annual General Meeting on 13 October 2022
(year ended 30 June 2021: nil).
184
The Rank Group PlcAnnual Report 2022 10 Earnings per share
(a) Basic earnings per share
Profit (loss) attributable to equity shareholders
Continuing operations
Discontinued operations
Total
Weighted average number of ordinary shares
in issue
Basic earnings (loss) per share
Continuing operations
Discontinued operations
Total
Year ended 30 June 2022
Year ended 30 June 2021
Underlying
SDI
Total
Underlying
SDI
Total
£20.0m
–
£20.0m
£37.4m
£8.8m
£46.2m
£57.4m
£8.8m
£66.2m
£(88.9)m
£1.1m
£(87.8)m
£(8.1)m
£23.8m
£15.7m
£(97.0)m
£24.9m
£(72.1)m
468.4m
468.4m
468.4m
437.3m
437.3m
437.3m
4.3p
–
4.3p
8.0p
1.9p
9.9p
12.3p
1.9p
14.2p
(20.3)p
0.2p
(20.1)p
(1.9)p
5.5p
3.6p
(22.2)p
5.7p
(16.5)p
(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.
Weighted average number of ordinary shares
in issue
Number of shares used for fully diluted earnings
per share
468.4m
468.4m
468.4m
437.3m
437.3m
437.3m
468.4m
468.4m
468.4m
437.3m
437.3m
437.3m
Year ended 30 June 2022
Year ended 30 June 2021
Underlying
SDI
Total
Underlying
SDI
Total
Diluted earnings (loss) per share
Continuing operations
Discontinued operations
Total
4.3p
–
4.3p
8.0p
1.9p
9.9p
12.3p
1.9p
14.2p
(20.3)p
0.2p
(20.1)p
(1.9)p
5.5p
3.6p
(22.2)p
5.7p
(16.5)p
185
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
11 Intangible assets
Group
Cost
At 1 July 2020
Additions
Disposals
Business disposed
Reallocation between categories1
Exchange adjustments
At 30 June 2021
Additions
Disposals
Exchange adjustments
At 30 June 2022
Aggregate amortisation and impairment
At 1 July 2020
Charge for the year
Disposals
Impairment charges
Business disposed
Exchange adjustments
At 30 June 2021
Charge for the year
Impairment charges
Impairment reversal
Exchange adjustments
At 30 June 2022
Net book value at 30 June 2021
Net book value at 30 June 2022
Casino
and other
gaming
licences and
concessions
£m
Software
and
development
£m
Brands and
customer
relationships
£m
Note
Goodwill
£m
8
35
8
220.2
–
–
–
–
(2.0)
218.2
2.1
–
–
220.3
–
–
–
–
–
–
–
–
–
–
–
–
280.3
0.4
–
–
–
(2.9)
277.8
–
–
0.1
277.9
62.9
0.1
–
–
–
(2.3)
60.7
0.1
13.4
(15.0)
(0.1)
59.1
218.2
220.3
217.1
218.8
118.8
14.1
(3.3)
(0.1)
0.6
(0.2)
129.9
11.0
–
(0.2)
140.7
49.8
22.7
(3.3)
0.6
(0.1)
(0.1)
69.6
21.8
–
–
–
91.4
60.3
49.3
21.9
0.9
–
(0.9)
–
(0.6)
21.3
1.4
–
–
22.7
7.5
5.2
–
–
–
(0.4)
12.3
5.2
–
–
–
17.5
9.0
5.2
Total
£m
641.2
15.4
(3.3)
(1.0)
0.6
(5.7)
647.2
14.5
–
(0.1)
661.6
120.2
28.0
(3.3)
0.6
(0.1)
(2.8)
142.6
27.1
13.4
(15.0)
(0.1)
168.0
504.6
493.6
1. Management identified £0.6m of assets which should be reclassified from property, plant and equipment to intangible assets. These have been reflected in the
reclassification line in the note above.
Amortisation charge for the year of £27.1m (30 June 2021: £28.0m) comprises of £11.7m (30 June 2021: £11.8m) recognised in respect
of SDI relating to continuing operations and £15.4m (30 June 2021: £16.2m) in respect of operating profit before SDI.
Net impairment charges for the year of £1.6m (30 June 2021: £0.6m) have been recognised in respect of SDI relating to continuing
operations, comprising of an impairment charge of £15.0m and impairment reversals of £13.4m.
Software includes internally-generated computer software and development technology with a net book value of £3.2m (30 June 2021:
£5.5m). Included in software and development are assets in the course of construction of £1.0m (30 June 2021: £1.5m).
Brands and customer relationships are fair value adjustments that arose on acquisition.
Intangible assets have been reviewed for impairment as set out in note 14.
186
The Rank Group PlcAnnual Report 2022 12 Property, plant and equipment
Group
Cost
At 1 July 2020
Additions
Disposals
Business disposed
Write off of assets
Reallocation between categories1
Reallocation between categories2
Exchange adjustments
At 30 June 2021
Additions
Disposals
Exchange adjustments
At 30 June 2022
Accumulated depreciation and impairment
At 1 July 2020
Charge for the year
Disposals
Business disposed
Reallocation between categories2
Exchange adjustments
At 30 June 2021
Charge for the year
Impairment charges
Impairment reversal
Disposals
Exchange adjustment
At 30 June 2022
Net book value at 30 June 2021
Net book value at 30 June 2022
Land and
buildings
£m
Note
Fixtures,
fittings,
plant and
machinery
£m
8
8
113.3
1.0
(0.5)
–
–
(1.4)
(1.9)
(0.7)
109.8
0.5
–
–
110.3
66.9
4.0
(0.5)
–
(0.8)
(0.1)
69.5
2.7
1.9
–
–
–
74.1
40.3
36.2
468.7
5.7
(5.1)
(3.3)
(0.5)
0.8
–
(3.9)
462.4
25.6
(5.1)
(0.1)
482.8
370.5
25.9
(5.0)
(2.8)
–
(3.3)
385.3
22.7
8.5
(5.2)
(5.1)
(0.3)
405.9
77.1
76.9
Total
£m
582.0
6.7
(5.6)
(3.3)
(0.5)
(0.6)
(1.9)
(4.6)
572.2
26.1
(5.1)
(0.1)
593.1
437.4
29.9
(5.5)
(2.8)
(0.8)
(3.4)
454.8
25.4
10.4
(5.2)
(5.1)
(0.3)
480.0
117.4
113.1
1. Management identified £0.6m of assets which should be reclassified from property, plant and equipment to intangible assets. These have been reflected in the
reclassification line in the note above.
2. Management identified £1.1m of net assets which should be reclassified from property, plant and equipment to right-of-use assets. These have been reflected in the
reclassification lines in the note above.
Net impairment charges for the year of £5.2m (30 June 2021: £nil) have been recognised in respect of SDI relating to continuing
operations, comprising of an impairment charge of £10.4m and impairment reversals of £5.2m. There were no impairment charges
or reversals in the prior year.
Included in property, plant and equipment are assets in the course of construction of £13.8m (30 June 2021: £1.7m).
187
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
13 Right-of-use assets
Group
Cost
At 1 July 2020
Additions
Disposals
Reallocation between categories1
Exchange adjustments
At 30 June 2021
Additions
At 30 June 2022
Accumulated depreciation and impairment
At 1 July 2020
Charge for the year
Reallocation between categories1
Exchange adjustments
At 30 June 2021
Charge for the year
Impairment charges
Impairment reversal
Exchange adjustments
At 30 June 2022
Net book value at 30 June 2021
Net book value at 30 June 2022
Right-of-use
land and
buildings
£m
Right-of-use
fleet and
machines
£m
186.4
6.6
(0.2)
1.9
(0.3)
194.4
21.9
216.3
44.7
23.0
0.8
(0.1)
68.4
25.0
24.0
(1.8)
0.1
115.7
126.0
100.6
5.0
–
–
–
5.0
–
5.0
1.6
0.8
–
–
2.4
1.6
–
–
–
4.0
2.6
1.0
Total
£m
191.4
6.6
(0.2)
1.9
(0.3)
199.4
21.9
221.3
46.3
23.8
0.8
(0.1)
70.8
26.6
24.0
(1.8)
0.1
119.7
128.6
101.6
1. Management identified £1.1m of net assets which should be reclassified from property, plant and equipment to right-of-use assets. These have been reflected in the
reclassification lines in the note above.
Net impairment charges for the year of £22.2m (30 June 2021: £nil) have been recognised in respect of SDI relating to continuing
operations, comprising of an impairment charge of £24.0m and impairment reversals of £1.8m. There were no impairment charges
or reversals in the prior year.
14 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 2022, 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:
Grosvenor – group of CGUs1
UK digital CGUs
International digital CGUs
Enracha CGUs2
Total
Goodwill
Intangible assets
2021/22
£m
80.9
108.5
30.9
–
220.3
2020/21
£m
80.9
106.4
30.9
–
218.2
2021/22
£m
206.4
–
–
12.2
218.6
2020/21
£m
210.4
–
–
6.7
217.1
1. 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.
2. 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.
188
The Rank Group PlcAnnual Report 2022 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 2022, and management is satisfied that the assumptions used were appropriate.
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 three 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.
Grosvenor venues
Mecca venues
UK digital
International digital
Enracha venues
Pre-tax discount rate
Long-term growth rate
2021/22
2020/21
2021/22
2020/21
11.3%
11.3%
13.0%
14.7%
12.5%
10.5%
10.5%
12.8%
14.0%
11.7%
2%
0%
2%
2%
2%
2%
0%
2%
2%
2%
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.
Impairment charges
Grosvenor venues1
Mecca venues2
Impairment reversals
Grosvenor venues1
Enracha venues3
Net impairment (charge) reversals
Property,
plant and
equipment
£m
Right-of-use
asset
£m
Intangible
assets
£m
(5.4)
(4.9)
(10.3)
2.9
2.3
5.2
(5.1)
(8.1)
(16.0)
(24.1)
1.1
0.7
1.8
(22.3)
(13.4)
–
(13.4)
9.3
5.7
15.0
1.6
Total
£m
(26.9)
(20.9)
(47.8)
13.3
8.8
22.0
(25.8)
1. 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 £132.7m.
2. 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 £23.2m.
3. 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 £25.7m.
Other than Enracha venues, which performed well in the year, all other Mecca clubs and some Grosvenor venues have 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 to a decision to close a number of Mecca clubs which resulted in impairment of £1.8m.
189
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview
Notes to the financial statements
Continued
14 Impairment reviews (continued)
During the year, the Group also recognised a reversal of previously impaired assets of £22.0m relating to Grosvenor venues and
Enracha venues. The reversals were driven by better than anticipated performance and improved outlook in the identified Grosvenor
and Enracha venues.
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 2023
and the Group’s medium-term strategic plan to 30 June 2025, 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. Terminal values were determined using a long-term growth assumption for each CGU noted
in the table above.
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 venues and Mecca 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 and Enracha venues.
Grosvenor Venues CGUs
Key Assumption
Revenue Growth
Reasonable Possible Change
10% decrease in revenue in year 1 – London
Impact on impairment
Increase
10% decrease in revenue in year 1 – Rest of UK
10% increase in revenue in year 1 – London
10% increase in revenue in year 1 – Rest of UK
1% decrease in discount rates
1% increase in discount rates
1% decrease in long-term growth rates
1% increase in long-term growth rates
Increase
Decrease
Decrease
Decrease
Increase
Increase
Decrease
Reasonable Possible Change
10% decrease in revenue in year 1
10% increase in revenue in year 1
1% decrease in discount rates
1% increase in discount rates
1% decrease in long–term growth rates
1% increase in long–term growth rates
Impact on impairment
Increase
Decrease
Decrease
Increase
Increase
Decrease
Pre-tax discount rates
Long-term growth rates
Mecca Venues CGUs
Key Assumption
Revenue Growth
Pre-tax discount rates
Long-term growth rates
190
£m
(7.5)
(2.6)
4.9
1.3
2.8
(3.3)
–
–
£m
(5.7)
4.7
0.9
(0.9)
(0.3)
0.3
The Rank Group PlcAnnual Report 2022 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 prior year, the recoverable amount was calculated by reference to 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, lease liabilities and net
intercompany positions. The key assumptions underlying the forecasts are those described above with regards to the impairment
testing of the Group’s CGUs.
The value in use of the Company’s investment in Rank Group Finance Plc 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.
No impairments were identified in the carrying value of the Company’s investments in subsidiaries. For CGUs, no reasonable possible
changes in assumptions will result in an impairment and therefore no sensitivity analysis has been disclosed.
15 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 35 for details.
(b) Company investments
Company – investment in subsidiaries
Cost
At start of year
At end of year
Provision for impairment
At start of year
At end of year
Net book value at start of year
Net book value at end of year
As at
30 June
2022
£m
As at
30 June
2021
£m
1,452.3
1,452.3
1,452.3
1,452.3
320.5
320.5
1,131.8
1,131.8
320.5
320.5
1,131.8
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.
The Company owns directly or indirectly 100% (unless otherwise noted) of the ordinary share capital and voting rights of the
following companies:
Name
Daub Alderney Limited
QSB Gaming Limited
Rank Digital Gaming (Alderney)
Limited
8Ball Games Limited9
Country of
incorporation
Alderney
Alderney
Alderney
Principal activities
Interactive gaming
Intermediary holding company
Interactive gaming
England and Wales
Marketing services
Grosvenor Casinos (GC) Limited England and Wales
Casinos
Grosvenor Casinos Limited
England and Wales
Casinos
Linkco Limited
England and Wales
Processing of credit transfers
Luda Bingo Limited
England and Wales
Dormant
Mecca Bingo Limited
England and Wales
Social and Bingo clubs
Registered office address
Inchalla, Le Val, Alderney GY9 3UL
La Corvee House, La Corvee,
Alderney, GY9 3TQ
La Corvee House, La Corvee,
Alderney, GY9 3TQ
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
191
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
15 Investments (continued)
Name
Rank (U.K.) Holdings Limited
Country of
incorporation
England and Wales
Principal activities
Dormant
Rank Casino Holdings Limited
England and Wales
Intermediary holding company
Rank Digital Holdings Limited
England and Wales
Intermediary holding company
Rank Digital Limited
England and Wales
Rank Group Finance Plc1
England and Wales
Support services to interactive
gaming
Funding operations for the Group
Rank Group Gaming Division
Limited
Rank Group Holdings Limited
England and Wales
England and Wales
Intermediary holding company and
property services
Dormant
Rank Leisure Holdings Limited England and Wales
Rank Leisure Limited
England and Wales
England and Wales
Intermediary holding company and
corporate activities
Adult gaming centres in Mecca and
Grosvenor Casinos venues
Dormant
Rank Leisure Machine Services
Limited
Rank Nemo (Twenty-Five)
Limited1
Rank Overseas Holdings
Limited
RO Nominees Limited
England and Wales
Intermediary holding company
England and Wales
Intermediary holding company
England and Wales
Dormant
Spacebar Media Limited
England and Wales
Stride Together Limited9
England and Wales
Development and maintenance of
online gaming software
Support services to interactive
gaming
The Gaming Group Limited
England and Wales
Casinos
The Rank Organisation Limited England and Wales
Dormant
Think Beyond Media Limited9
England and Wales
Marketing services
England and Wales
Interactive gaming
England and Wales
England and Wales
Support services to interactive
gaming
Dormant
England and Wales
Dormant
England and Wales
Dormant
France
France
Gibraltar
Gibraltar
Dormant
Dormant
Marketing services
Dormant
Rank Interactive Limited
(formerly known as Aspers
Online Limited)7
Upperline Marketing
Limited6, 9
MRC Developments Limited
Rank Precision Industries
Limited5
Rank Speciality Catering
Limited5
Associated Leisure France
Properties SCI4
Associated Leisure France
SARL4
Rank Digital Services (Gibraltar)
Limited
Rank Interactive (Gibraltar)
Limited8
192
Registered office address
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
Unit 450 Highgate Studios 53-79
Highgate Road, Kentish Town,
London, NW5 1TL
Unit 901 Highgate Studios 53-79
Highgate Road, Kentish Town,
London, NW5 1TL
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
Unit 441/2 Highgate Studios 53-79
Highgate Road, Kentish Town,
London, NW5 1TL
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
TOR, Saint-Cloud Way,
Maidenhead SL6 8BN
Zi Sud, 12 Rue des Petits Champs,
35400, St Malo, France
4 Rue Joseph Monier, 92859 Rueil
Malmaison, Cades, France
Second Floor, Icom House, 1/5 Irish
Town, Gibraltar
Second Floor, Icom House, 1/5 Irish
Town, Gibraltar
The Rank Group PlcAnnual Report 2022 Name
Mindful Media Limited
Passion Gaming Private
Limited2
Netboost Media Limited
S.T.R. Financials Limited3
Stride Gaming Limited
Bingosoft Plc
Country of
incorporation
Guernsey
Principal activities
Dormant
India
Israel
Israel
Jersey
Malta
Online operator of digital card
games in India
Marketing services
Dormant
Intermediary holding company
Interactive gaming
Stride Gaming Spain Plc5
Malta
Dormant
SRG Services Limited
Mauritius
Shared services support
Stride Investment Limited
Mauritius
Intermediary holding company
Shifttech (Pty) Limited
South Africa
Conticin SL
Gotfor SA
Rank Cataluña SA
Rank Centro SA
Rank Digital España SA
Rank Holding España SA
Spain
Spain
Spain
Spain
Spain
Spain
Development and maintenance of
online gaming software
Operator of parking for social and
bingo clubs
Social and bingo clubs
Social and bingo clubs
Social and bingo clubs
Interactive gaming
Intermediary holding company
Rank Stadium Andalucia SL
Spain
Arcade and sports betting
Top Rank Andalucia SA
Verdiales SL
Spain
Spain
Social and bingo clubs
Social and bingo clubs
Rank America Inc.5
U.S.A.
Dormant
Registered office address
Kingsway House, Havilland Street,
St Peter Port, Guernsey, GY1 2QE
2nd Floor, SCO No 350, Sector 9,
Urban Estate, Panchkula, Haryana,
India
5 Ha’Chilazon Street, Ramat Gan,
Israel
58 Harakevet St. Electra City Tower
Tel-Aviv 6777016 Israel
12 Castle Street, St. Helier Jersey
JE2 3RT
Vault 14, Level 2, Valletta
Waterfront, Floriana, FRN 1914,
Malta
Level 3, Valleta Buildings, South
Street, Valletta VLT 1103, Malta
Suite 221 Grand Bay Business Park,
Grand Bay 30515, Republic of
Mauritius
c/o Mauri Experta Ltd., 12th Level,
Tower 1, Nexteracon Towers,
Cybercity, Ebene, Republic of
Mauritius
Unit 10, 10 Pepper Street, Cape
Town, Western Cape 8001, South
Africa
Calle Balmes Nº 268-270 1st Floor,
08006, Barcelona, Spain
Carrer del Papa Pius XI, 114, 08208
Sabadell, Barcelona, Spain
Calle Balmes Nº 268-270 1st Floor,
08006, Barcelona, Spain
Calle Espoz y mina Nº 8, 1st centro,
28012, Madrid, Spain
Calle Balmes Nº 268-270 1st Floor,
08006, Barcelona, Spain
Calle Balmes Nº 268-270 1st Floor,
08006, Barcelona, Spain
Calle Balmes Nº 268-270 1st Floor,
08006, Barcelona, Spain
Conde Robledo 1, 14008, Cordoba,
Spain
Sala Andalucía, Ronda,
Capuchinos 19, 41008, Sevilla,
Spain
The Corporation Trust Company,
1209 Orange Street, Wilmington,
DE 19801, USA
1. Directly held by the Company.
2. 51% investment and year end 31 March.
3. Year end 31 August.
4. Year end 31 October.
5. Year end 31 December. Stride Gaming Spain plc has commenced dissolution on 30 April 2022.
6. Principal activities are carried out in Malta through its Malta branch.
7. Acquired the remaining 50% ownership in joint venture interest on 1 April 2022, see note 35.
8. Change principal activity from Dormant to Interactive Gaming effective 1 July 2022.
9. Rank Group plc has issued 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.
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.
193
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
15 Investments (continued)
(c) Non-controlling interest (NCI)
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.
Current assets
Current liabilities
Current net assets
Non-current assets
Non-current assets
Net assets
Accumulated NCI
16 Inventories
Finished goods
There were no write downs of inventory in the year (30 June 2021: £nil).
17 Other receivables
Current
Other receivables
Less: provisions for impairment of other receivables
Other receivables – net
Net investment in lease
Prepayments
Other receivables – current
Non-current
Other receivables
Net investment in lease
Other receivables – non-current
As at
30 June
2022
£m
1.5
(1.7)
(0.2)
0.1
0.1
(0.1)
(0.1)
As at
30 June
2021
£m
1.0
(1.3)
(0.3)
0.1
0.1
(0.2)
(0.1)
Group
As at
30 June
2022
£m
2.3
As at
30 June
2021
£m
2.0
Group
As at
30 June
2022
£m
As at
30 June
2021
£m
10.7
(1.6)
9.1
1.4
23.7
34.2
6.7
–
6.7
7.8
(1.6)
6.2
3.1
7.0
16.3
3.7
1.4
5.1
Group
The Directors consider that the carrying value of other receivables approximate to their fair value.
As at 30 June 2022 other receivables of £1.3m (30 June 2021: £1.0m) 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.
194
The Rank Group PlcAnnual Report 2022 18 Government grants
At the start of the year
Receivable in the year
Cash received
At the end of the year
Group
As at
30 June
2022
£m
0.8
3.6
(4.4)
–
As at
30 June
2021
£m
11.9
64.4
(75.5)
0.8
Government grants have been received under the Coronavirus Job Retention Scheme in the UK and similar schemes in other countries
in which the Group operates. In addition, Local Restrictions Support Grants and Restart Grants were also received in the prior year.
Local Restrictions Support Grants was a grant funding scheme which supported businesses that were required to close during national
lockdown periods and periods of local restrictions. The Restart Grant scheme supported business with a one-off grant, to reopen safely
as COVID-19 restrictions were lifted.
19 Trade and other payables
Current
Trade payables
Social security and other taxation
Other payables
Accruals
Trade and other payables – current
Trade and other payables – non-current
Group
Company
As at
30 June
2022
£m
35.8
29.3
32.5
33.5
131.1
–
As at
30 June
2021
£m
25.7
22.7
38.0
39.9
126.3
–
As at
30 June
2022
£m
As at
30 June
2021
£m
–
–
0.4
–
0.4
–
–
–
0.6
–
0.6
–
Included within other payables is £5.9m (2021: £5.9m) regarding a UK Gambling commission fine issued to Daub Alderney Limited,
a Stride licensed entity.
Group
As at
30 June
2022
£m
8.1
(4.2)
3.9
As at
30 June
2021
£m
10.1
(3.1)
7.0
20 Income tax
Income tax receivable
Income tax payable
Net income tax receivable
195
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
21 Financial assets and liabilities
(a) Interest-bearing loans and borrowings
Current interest-bearing loans and borrowings
Obligations under leases
Term loans
Revolving credit facility
Other current loans
Accrued interest
Unamortised facility fees
Total current interest-bearing loans and borrowings
Non-current interest-bearing loans and borrowings
Obligations under leases
Term loans
Other non-current loans
Unamortised facility fees
Total non-current interest-bearing loans and borrowings
Total interest-bearing loans and borrowings
Sterling
Total interest-bearing loans and borrowings
Group
As at
30 June
2022
£m
40.4
34.4
–
0.5
(1.0)
74.3
141.3
44.4
(0.3)
185.4
As at
30 June
2021
£m
42.2
29.6
11.0
0.4
(1.6)
81.6
164.7
78.8
(1.1)
242.4
259.7
324.0
259.7
259.7
324.0
324.0
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 2022 was
£78.8m (30 June 2021: £108.4m), a reduction in the year following the second scheduled repayment of £29.6m made in May 2022.
The term loan has a maturity date of May 2023 (£34.4m) and May 2024 (44.4m).
Revolving credit facilities (‘RCF’)
On 6 July 2021, the Group signed a new two-year (plus one-year option) facility for £25m. The Group’s two existing facilities which were
signed on 29 February and 2 March 2020, with expiry dates of May 2024 (£40.0m) and February 2025 (£15.0m). Interest on all three
facilities is payable on a periodic basis depending on the loan drawn. 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 2022, £nil of RCF was drawn (30 June 2021: £11.0m), providing
the Group with £80.0m of undrawn committed facilities.
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. In June
2020, the Group’s forecasts indicated that the Group would likely fail to meet both financial covenant tests at the 31 December 2020
testing date, therefore the Group secured a covenant waiver for 12 months. A further 12-month extension to the covenant waivers was
subsequently secured in November 2020 and expired on 30 June 2022. During the waiver period the Group met the minimum cash
and available facilities position of no less than £50.0m which was tested quarterly. From 1 July 2022, the Group reverted to the two
financial covenant tests which are tested biannually.
Company
The Company did not hold any external interest bearing loans or borrowings at 30 June 2022 (30 June 2021: £nil). The Company held
interest bearing loans with other Group companies at 30 June 2022 of £387.1m (30 June 2021: £372.8m).
(b) Hedging activities
The Group has not carried out any hedging activities in either period.
196
The Rank Group PlcAnnual Report 2022 (c) Fair values
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 2022 and 30 June 2021.
Group
Financial assets:
Loans and receivables
Other receivables
Cash and short-term deposits
Total
Financial liabilities:
Other financial liabilities
Interest bearing loans and borrowings
– Obligations under leases
– Floating rate borrowings
– Other
Trade and other payables
Total
Company
Financial liabilities:
Other financial liabilities
Trade and other payables
Financial guarantee contracts
Amounts owed to subsidiary undertakings
Total
Carrying amount
Fair value
As at
30 June
2022
£m
As at
30 June
2021
£m
As at
30 June
2022
£m
As at
30 June
2021
£m
Level 2
Level 1
3.8
97.9
101.7
4.8
69.6
74.4
3.8
97.9
101.7
4.8
69.6
74.4
Level 2
Level 2
Level 2
Level 2
181.7
78.8
–
101.8
362.3
206.9
119.4
0.4
103.6
430.3
181.7
78.8
–
101.8
362.3
Carrying amount
Fair value
As at
30 June
2022
£m
As at
30 June
2021
£m
As at
30 June
2022
£m
0.4
2.6
387.1
390.1
0.6
3.1
371.9
375.6
0.4
2.6
387.1
390.1
206.9
119.4
0.4
103.6
430.3
As at
30 June
2021
£m
0.6
3.1
371.9
375.6
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 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.
197
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
22 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 2022 and 30 June 2021.
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.
Change in foreign exchange rates:
+10.0% US$
-10.0% US$
+10.0% euro
-10.0% euro
Effect on profit before tax
Effect on equity
As at
30 June
2022
£m
(0.1)
0.2
(0.6)
0.7
As at
30 June
2021
£m
(0.1)
0.1
(0.2)
0.3
As at
30 June
2022
£m
–
–
7.6
(9.9)
As at
30 June
2021
£m
–
–
6.8
(6.8)
(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 policy of maintaining between 40% and 60% of its borrowings at a fixed rate of interest. At 30 June 2022,
the Group is operating within the policy with 43% of the borrowings at a fixed rate of interest (30 June 2021: 58%).
198
The Rank Group PlcAnnual Report 2022 (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.
Sterling:
100 basis point increase
200 basis point increase
Effect on profit before tax
As at
30 June
2022
£m
(0.6)
(1.2)
As at
30 June
2021
£m
(1.1)
(2.2)
There was no impact on equity in either year as a consequence of loan arrangements.
Due to current low interest rates, any further decline would not have a material impact on income and equity for the year. As such,
sensitivity to a decrease in interest rates has not been presented.
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.
(c) Liquidity risk
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 2021: £55.0m) expiring July 2023
(£25m), May 2024 (£40.0m) and February 2025 (£15.0m), and the £78.8m term loan facility (30 June 2020: £108.4m). 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.
199
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
22 Financial risk management objectives and policies (continued)
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.
At 30 June 2022
Interest-bearing loans and borrowings1
Trade and other payables
Lease liabilities
At 30 June 2021
Interest-bearing loans and borrowings1
Trade and other payables
Lease liabilities
On demand
£m
Less than
12 months
£m
1 to 2 years
£m
2 to 5 years
£m
Greater than
5 years
£m
–
–
–
–
–
–
–
–
36.3
101.8
40.4
178.5
42.1
101.8
42.2
186.1
45.2
–
25.8
71.0
35.8
–
25.6
61.4
–
–
72.8
72.8
45.1
–
73.0
118.1
–
–
42.7
42.7
–
–
66.1
66.1
Total
£m
81.5
101.8
181.7
365.0
123.0
101.8
206.9
431.7
1. 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 consolidated
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.
Total loans and borrowings (note 21)
Less: Cash and short-term deposits
Less: Accrued interest
Less: Unamortised facility fees
Net debt
Operating profit (loss) before SDI from continuing operations
Add: Depreciation and amortisation
EBITDA
Leverage ratio
As at
30 June
2022
£m
259.7
(97.9)
(0.5)
1.3
162.6
39.8
67.4
107.2
As at
30 June
2021
£m
324.0
(69.6)
(0.4)
2.7
256.7
(84.5)
70.3
(14.2)
1.5
(18.1)
Due to the impact of COVID-19 on the Group’s performance, in the prior year the Group generated a negative EBITDA and likewise,
a negative leverage ratio at 30 June 2021. The Group’s performance started to recover during the year with leverage ratio of 1.5
(30 June 2021: (18.1)).
Collateral
The Group did not pledge or hold any collateral at 30 June 2022 (30 June 2021: £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 2021: £nil).
The Company does not have any other significant exposure to financial risks.
200
The Rank Group PlcAnnual Report 2022 23 Deferred tax
The analysis of deferred tax included in the financial statements at the end of the year is as follows:
Deferred tax assets:
Accelerated capital allowances
Tax losses carried forward
Other UK temporary differences
Deferred tax assets
Deferred tax liabilities:
Other overseas temporary differences
Business combinations – acquired intangibles
Business combinations – non-qualifying properties
Temporary differences on UK casino licences
Deferred tax liabilities
Net deferred tax liability
Group
As at
30 June
2022
£m
14.6
9.2
5.8
29.6
(3.5)
(0.7)
(0.6)
(43.9)
(48.7)
As at
30 June
2021
£m
19.6
9.6
5.8
35.0
(1.9)
(0.3)
(0.7)
(46.8)
(49.7)
(19.1)
(14.7)
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 £28.2m (30 June 2021: £31.4m)
have been offset and disclosed on the balance sheet as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax liability
Group
As at
30 June
2022
£m
1.4
(20.5)
(19.1)
As at
30 June
2021
£m
3.6
(18.3)
(14.7)
The deferred tax assets recognised are recoverable against future taxable profits that the Directors consider more likely than not to occur
on the basis of management forecasts.
The Group has UK tax losses of £0.4m (30 June 2021: £0.6m) and overseas tax losses of £16.1m (30 June 2021: £15.7m) 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 £1.9m 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 2021: £780m). These losses have no expiry date and are available
for offset against future UK chargeable gains. No deferred tax asset (30 June 2021: £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 2021: £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.
201
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
23 Deferred tax (continued)
The deferred tax included in the Group income statement is as follows:
Deferred tax in the income statement
Accelerated capital allowances
Tax losses
Business combinations – property lease fair value adjustments
Temporary differences on UK casino licences
Other temporary differences
Total deferred tax (charge) credit
The deferred tax movement on the balance sheet is as follows:
As at start of year
Exchange adjustments
Acquisition of Rank Interactive Limited
Deferred tax (charge) credit in the income statement
Deferred tax credit to equity
As at end of year
24 Provisions
Group
Year
ended
30 June
2022
£m
(5.0)
(0.3)
0.1
2.9
(1.7)
(4.0)
Group
30 June
2022
£m
(14.7)
(0.1)
(0.3)
(4.0)
–
(19.1)
Group
At 1 July 2021
Charge to the income statement – SDI
Release to the income statement – SDI
Utilised in the year
At 30 June 2022
Current
Non-current
Total
Property-
related
provisions
£m
15.2
3.8
(10.4)
(1.8)
6.8
5.2
1.6
6.8
Disposal
provisions
£m
3.9
–
–
–
3.9
0.3
3.6
3.9
Restructuring
provisions
£m
0.1
–
(0.1)
–
–
–
–
–
Indirect tax
provision
£m
1.2
–
–
–
1.2
1.2
–
1.2
Pay
provision
£m
0.2
–
(0.1)
–
0.1
0.1
–
0.1
Warranty
provision
£m
0.8
–
(0.3)
–
0.5
0.1
0.4
0.5
Year
ended
30 June
2021
£m
4.0
9.6
(0.3)
(11.5)
1.5
3.3
30 June
2021
£m
(21.6)
0.1
–
3.3
3.5
(14.7)
Total
£m
21.4
3.8
(10.9)
(1.8)
12.5
6.9
5.6
12.5
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
The balance as at 30 June 2021 comprised of £4.8m of dilapidations provisions and a property-related provision of £10.4m.
In prior years and as a result of the COVID-19 lockdown, the Group determined it was probable that it would 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 current year, the Group have re-considered this provision in light of the current circumstances 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.
During the year, and as a result of the decision to exit a number of leases at their expiration, the Group has recognised additional
provision of £3.8m which represents Rank’s best estimate to exit the properties and return them to their original state.
202
The Rank Group PlcAnnual Report 2022 Disposal provisions
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. The timing of any personal injury claims is uncertain and therefore
these claims have been included in the maturity analysis based on management’s best estimates. The disposal provisions held
comprise the following:
Legacy industrial disease and personal injury claims
Other
Total disposal provisions
As at
30 June
2022
£m
3.8
0.1
3.9
As at
30 June
2021
£m
3.8
0.1
3.9
Restructuring provisions
The balance of £0.1m as at 30 June 2021 relates to remaining SDI restructuring and relocation costs which have been fully completed
and settled during the year ended 30 June 2022.
Indirect tax provision
The indirect tax provision relates to an amusement machine licence duty claim by HMRC. The balance of £1.2m (30 June 2021: £1.2m)
represents the Directors’ best estimate of the outflow likely to arise.
Pay provision
The balance of £0.1m (30 June 2021: £0.2m) 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 £0.2m additional profit on sale
within the SDI of the Group income statement. The release in the year represents Rank’s best estimate of liability that have now passed
due to the passage of time in which the purchaser can no longer claim.
Company
Provision has been made for legacy industrial disease and personal injury claims relating to a previously closed business. The timing
of any personal injury claims is uncertain and therefore these claims have been included in the maturity analysis based on management’s
best estimates. The disposal provisions held comprise the following:
Current
Non-current
Total legacy industrial disease and personal injury claims
As at
30 June
2022
£m
0.1
0.9
1.0
As at
30 June
2021
£m
0.1
0.9
1.0
203
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
25 Share capital and reserves
Authorised ordinary shares of 138/9p each
Issued and fully paid
At start of the year
Shares issued in year
At end of the year
Share premium
At start of the year
Shares issued in year
At end of the year
As at 30 June 2022
As at 30 June 2021
Number
m
1,296.0
Nominal
value
£m
180.0
Number
m
1,296.0
Nominal
value
£m
180.0
As at 30 June 2022
As at 30 June 2021
Number
m
468.4
–
468.4
Nominal
value
£m
65.0
–
65.0
Number
m
390.7
77.7
468.4
Nominal
value
£m
54.2
10.8
65.0
As at 30 June 2022
As at 30 June 2021
Number
m
468.4
–
468.4
Nominal
value
£m
155.7
–
155.7
Number
m
390.7
77.7
468.4
Nominal
value
£m
98.4
57.3
155.7
On 24 November 2020, the Group issued 77,746,020 ordinary shares as part of a share placing and parallel retail offer, corresponding
to 19.9% of total shares issued. Each share has the same right to receive dividends and represents one vote at shareholders’ meetings.
Share premium proceeds in addition to the nominal value of the shares issued, were included in share premium, less the costs
associated with the issue of new equity.
Total shares in issue at 30 June 2022 are 468,429,541 (2021: 468,429,541).
26 Notes to cash flow
Reconciliation of profit(loss) for the year to cash generated (used) from operations:
Profit (loss) for the year
Adjustments for:
Depreciation and amortisation
Assets written off
Net financing charge
Income tax expense (credit)
Share-based payments
Separately disclosed items
Increase in inventories
(Increase) decrease in other receivables
Increase (decrease) in trade and other payables
Cash utilisation of provisions (see note 24)
Cash receipts in respect of separately disclosed items
Cash generated from (used in) operations
Group
Company
Year ended
30 June
2022
£m
66.2
Year ended
30 June
2021 Restated
£m
(72.0)
Note
67.4
–
13.4
6.4
(0.3)
(46.2)
106.9
(0.3)
(18.4)
12.5
100.7
(1.8)
72.4
171.3
71.2
0.5
14.4
(10.1)
(0.2)
(15.7)
(11.9)
(0.1)
4.8
(14.0)
(21.2)
–
5.9
(15.3)
Year ended
30 June
2022
£m
(14.5)
–
–
Year ended
30 June
2021 Restated
£m
(7.9)
–
–
–
15.5
–
–
–
1.0
–
–
14.6
15.6
(0.1)
–
15.5
–
8.9
–
–
–
1.0
–
–
(1.0)
–
–
–
–
The Group restated the prior year cash flow format to start from profit (loss) for the year instead of operating profit (loss). This method
provides more comprehensive information which would be useful to the reader of the consolidated and company financial statements.
204
The Rank Group PlcAnnual Report 2022 27 Cash and short-term deposits
Cash at bank and on hand
Short-term deposits
Total
The analysis of cash and short-term deposits by currency is as follows:
Sterling
Euro
Others
Total
Group
As at
30 June
2022
£m
77.9
20.0
97.9
Group
As at
30 June
2022
£m
80.5
14.1
3.3
97.9
As at
30 June
2021
£m
59.6
10.0
69.6
As at
30 June
2021
£m
55.6
11.6
2.4
69.6
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 £8.0m (2021: £7.1m) relating to customer funds which is matched by liabilities to customers of equal value within
trade and other payables (note 19).
Company
At 30 June 2022 the Company had cash and short-term deposits of £nil (30 June 2021: £nil).
28 Reconciliation of cash flow from financing activities
Reconciliation of net debt:
Cash and cash equivalents
Loans and borrowings
Lease liabilities
Net debt
For the purpose of the statements of cash flow, cash and cash equivalents comprise the following:
Group
As at
30 June
2022
£m
97.9
(78.8)
(181.7)
(162.6)
Group
As at
30 June
2022
£m
77.9
20.0
97.9
As at
30 June
2021
£m
69.6
(119.4)
(206.9)
(256.7)
As at
30 June
2021
£m
59.6
10.0
69.6
Transactions year ended
30 June 2022
Cash flow
(53.7)
(29.6)
(11.0)
(94.3)
Non-cash
changes
28.5
–
–
28.5
As at
30 June
2022
£m
181.7
78.8
–
260.5
As at
30 June
2021
£m
206.9
108.4
11.0
326.3
Cash at bank and on hand
Short-term deposits
Total
Changes in liabilities arising from financing activities:
Lease liabilities
Term loans
Revolving credit facility
Total borrowings
205
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
29 Employees and Directors
(a) Employee benefit expense for the Group during the year
Wages and salaries
Social security costs
Pension costs
Share-based payments
The Company has no employees (year ended 30 June 2021: nil).
(b) Average monthly number of employees
Year ended
30 June
2022
£m
168.4
16.7
5.1
(0.3)
189.9
Year ended
30 June
2021
£m
148.5
13.8
4.5
(0.2)
166.6
Grosvenor Venues
Mecca Venues
Digital
Enracha Venues
Central Costs
(c) Key management compensation
Full-time
Year ended
30 June
2022
2,558
573
660
435
343
4,569
Part-time
Year ended
30 June
2022
1,515
1,385
17
70
17
3,004
Total
Year ended
30 June
2022
4,073
1,958
677
505
360
7,573
Full-time
Year ended
30 June
2021
2,661
572
600
487
286
4,606
Part-time
Year ended
30 June
2021
1,569
1,633
27
75
23
3,327
Salaries and short-term employee benefits (including social security costs)
Termination benefits
Post-employment benefits
Share-based payments
Year ended
30 June
2022
£m
2.3
–
0.1
0.1
2.5
Total
Year ended
30 June
2021
4,230
2,205
627
562
309
7,933
Year ended
30 June
2021
£m
2.5
0.1
0.2
–
2.8
Included in key management compensation are bonuses of £nil in respect of the current year (year ended 30 June 2021: £0.2m).
Key management is defined as the Executive Directors of the Group and the management team, details of which are set out on page 94
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
Salaries and short-term employee benefits (including social security costs)
Post-employment benefits
Share-based payments
Year ended
30 June
2022
£m
1.3
0.1
0.1
1.5
Year ended
30 June
2021
£m
1.1
0.1
–
1.2
No Director accrued benefits under defined benefit pension schemes in either 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 120.
206
The Rank Group PlcAnnual Report 2022 30 Share-based payments
During the year ended 30 June 2022, the Company operated an equity-settled Long-Term Incentive Plan (‘LTIP’). Further details of the
LTIP are included in the Remuneration Report on pages 120 to 122. The LTIP is an equity-settled scheme and details of the movements
in the number of shares are shown below:
Outstanding at start of the year
Granted
Exercised
Expired
Forfeited
Outstanding at end of the year
Weighted average remaining life
Weighted average fair value for shares granted during the year (p)
As at
30 June
2022
7,518,376
3,937,473
(98,489)
(1,802,540)
(1,445,966)
8,108,854
1.6 years
101.13p
As at
30 June
2021
4,860,348
3,396,884
–
–
(738,856)
7,518,376
2.4 years
96.7p
There are five LTIP awards currently in issue during the financial year ended 30 June 2022.
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 £nil exercise
price.
LTIP – 2020/21 award
Vests in a single tranche in December 2023. All LTIP awards have £nil exercise price.
LTIP – 2021/22 award
Vests in a single tranche in September 2024. All LTIP awards have £nil exercise price.
Recovery Incentive Scheme (RIS) – 2021/22 award
Vests in a single tranche in June 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 £nil exercise price.
LTIP – 2021/22 Exec award
Vests in a two tranches, 50% in May 2023 and 50% in March 2024. All LTIP awards have £nil exercise price.
The number of LTIP awards and the fair value per share granted during the year were as follows:
Number
Weighted average fair value per share
The number of RIS awards and the fair value per share granted during the year were as follows:
Number
Weighted average fair value per share
30 June
2022
2,215,812
74.1p
30 June
2021
3,396,884
96.7p
30 June
2022
1,535,025
162.9p
30 June
2021
–
–
The fair value of the LTIP and RIS 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:
Dividend yield (%)
Vesting period (years)
Weighted average share price (p)
30 June
2022
2.00
2.00
173.0
The number of LTIP Exec awards and the fair value per share of the LTIP Exec awards granted during the year were as follows:
Number
Weighted average fair value per share
207
30 June
2022
186,636
110.1p
30 June
2021
2.00
3.00
139.7
30 June
2021
–
–
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
30 Share-based payments (continued)
The fair value of the LTIP Exec 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:
Dividend yield (%)
Vesting period (years)
Weighted average share price (p)
30 June
2022
2.00
2.00
106.0
30 June
2021
2.00
3.00
139.7
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 £0.3m credit (30 June 2021:
£1.1m charge) in operating profit for costs of the scheme in the current year.
31 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 2022, the Group contributed a total of £2.4m (year ended 30 June 2021:
£5.3m) 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 2022, the Group’s
commitment was £3.6m (30 June 2021: £3.8m). The Group paid £0.2m (year ended 30 June 2021: £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
£0.1m (year ended 30 June 2021: £0.2m) before taxation and £0.1m after taxation (year ended 30 June 2021: £0.2m).
Discount rate
Pension increases
30 June
2022
% p.a.
3.8
4.9
30 June
2021
% p.a.
1.9
3.3
The obligation has been calculated using the S2 mortality tables with a 1.5% per annum improvement in life expectancy.
32 Leases
Group as a Lessee
The Group leases various properties and equipment. Rental contracts are made for various fixed periods ranging up to 93 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
2022
£m
206.9
21.9
6.6
(53.7)
–
181.7
40.4
141.3
181.7
30 June
2021
£m
240.5
3.0
–
(36.4)
(0.2)
206.9
42.2
164.7
206.9
As at 1 July 2021
Additions
Accretion of interest
Payments
Foreign exchange
As at 30 June 2022
Current liabilities
Non-current liabilities
Total
208
The Rank Group PlcAnnual Report 2022 The maturity analysis of lease liabilities are disclosed below:
Within 1 year
After 1 year but within 2 years
After 2 years but within 5 years
After 5 years
Less: total future interest expenses
Present value of lease liabilities
The following are the amounts recognised in the Group income statement:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Total amount recognised in the income statement
As at 30 June 2022
Present value
of the
minimum
lease
payments
£m
40.4
25.8
72.8
42.7
181.7
Total
minimum
lease
payments
£m
47.0
30.1
85.2
50.2
212.5
(30.8)
181.7
Year ended
30 June
2022
£m
26.6
6.7
33.3
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.
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 2022 from lease contracts in which the
Group sub-lets certain property space is £1.0m (year ended 30 June 2021: £1.6m).
Future minimum rentals receivable under non-cancellable operating leases as at 30 June are as follows:
Within 1 year
After 1 year but within 2 years
After 2 years but within 5 years
After 5 years
Total
Capital commitments
At 30 June 2022, the Group has contracts placed for future capital expenditure of £15.3m (30 June 2021: £6.9m).
As at
30 June
2022
Total
minimum
lease
payments
£m
2.6
0.9
1.1
2.1
6.7
209
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Notes to the financial statements
Continued
33 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 2022, 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 £1.1m 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.
Company
At 30 June 2022, the Company has made guarantees to subsidiary undertakings of £79.5m (30 June 2021: £108.7m).
34 Related party transactions
Group
Details of compensation paid to key management are disclosed in note 29.
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 2021, entities controlled by GuoLine owned 56.1% of the Company’s shares, including 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 144.
Company
The following transactions with subsidiaries occurred in the year:
Interest payable to subsidiary undertaking
Year ended
30 June
2022
£m
(15.0)
Year ended
30 June
2021
£m
(9.8)
During the year, Rank Group Finance Plc, a subsidiary of the Company, received cash from the Company of £0.1m (year ended 30 June
2021: received cash from the Company of £68.1m).
210
The Rank Group PlcAnnual Report 2022 35 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.
Customer relationships
Cash
Trade and other payables
Deferred tax liability
Net assets acquired
Goodwill
Total consideration
The fair value of each component of consideration is analysed as:
Cash1
Loan settlement
Contingent cash consideration
Fair value of previously existing interest in joint venture
Total
1. Cash consideration of £1 for shares.
The identified intangible assets recognised separately from goodwill are as follows:
Customer relationships
Total
£m
1.4
0.1
(0.6)
(0.4)
0.5
2.1
2.6
£m
–
0.5
0.8
1.3
2.6
£m
1.4
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.
211
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Five year review
Continuing operations
Revenue
Operating profit (loss) before separately disclosed items
Separately disclosed items
Group operating profit (loss)
Total net financing charge
Profit (loss) before taxation
Taxation
Profit (loss) after taxation from continuing operations
Discontinued operations
Profit (loss) for the year
Year
ended
30 June
2022
£m
Year
ended
30 June
2021
£m
Year
ended
30 June
2020
(restated)
£m
Year
ended
30 June
2019
£m
Year
ended
30 June
2018
£m
644.0
329.6
629.7
695.1
691.0
39.8
42.3
82.1
(84.5)
(8.4)
(92.9)
(7.8)
(14.4)
74.3
(107.3)
(16.9)
10.4
57.4
8.8
66.2
(96.9)
24.9
(72.0)
49.1
(27.6)
21.5
(8.1)
13.4
(5.2)
8.2
1.2
9.4
75.7
(36.7)
39.0
77.0
(26.9)
50.1
(4.4)
(3.4)
34.6
46.7
(7.0)
(10.8)
27.6
1.5
29.1
35.9
–
35.9
Basic earnings (loss) per ordinary share
4.3p
(20.1)p
7.0p
15.3p
15.0p
Total ordinary dividend (including proposed) per ordinary share
0.00p
0.00p
2.80p
7.65p
7.45p
Group funds employed
Intangible assets, property, plant and equipment
and right-of-use assets
Provisions
Other net liabilities
Total funds employed at year-end
Financed by
Ordinary share capital and reserves
Net (cash) debt
Average number of employees (000s)
708.3
(12.4)
(106.0)
589.9
427.3
162.6
589.9
7.6
750.6
(21.4)
(111.3)
617.9
361.2
256.7
617.9
810.7
(18.9)
(128.4)
663.4
365.9
297.5
663.4
609.3
(46.8)
(166.2)
396.3
398.1
(1.8)
396.3
630.6
(41.6)
(183.2)
405.8
396.5
9.3
405.8
7.9
8.4
9.0
9.9
212
The Rank Group PlcAnnual Report 2022 Shareholder information
2022/23 financial calendar
Not applicable
13 October 2022
Not applicable
26 January 2023
Record date for 2021/22 final dividend
Annual General Meeting and trading update
Payment date for 2021/22 final dividend
Interim results announcement
Annual General Meeting
The 2022 Annual General Meeting (‘AGM’)
will be held on 13 October 2022, 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. 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,
West Sussex BN99 6DA (Tel: from the UK
0371 384 20981 and from outside the UK
+44 121 415 70471).
There is a text phone available on
0371 384 22551 for shareholders with
hearing difficulties.
1. Lines are open 08:30 to 17:30, Monday to Friday
(excluding public holidays in England and Wales).
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 Group
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.
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.
213
The Rank Group PlcAnnual Report 2022Strategic reportGovernance reportFinancial statementsOverview Shareholder information
Continued
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:
Luisa Wright, Group General Counsel
& Company Secretary
Sarah Powell, Director of Investor
Relations & Corporate Communications
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
214
The Rank Group PlcAnnual Report 2022 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