The Rank Group Plc (RNKA.F) Earnings Call Transcript

[Presentation] What a great video there showcasing some of the best that Grosvenor has to offer. Good morning, everyone. I'm Richard Harris, and I'm delighted to welcome you to this Rank Group Capital Markets event. Before we start, I've got the pleasure of talking to you about fire alarms and toilets. So if we do have a fire alarm today, it is genuine. It's not a test, I'm afraid. There are no planned fire alarms. There is an exit behind you to my left and an exit at the very back of the poker room, where you'll also find the toilets. Go all the way to the back. And if you get to the outdoor terrace, you've gone a bit too far. Hopefully, that's all understood. Let's get back to the business. The focus of today's event will be the strategy for Grosvenor Casinos, the largest part of The Rank Group. The Grosvenor business is at an exciting inflection point. We've built strong foundations in recent years and performance is much improved over the last 24 months. We're going to show you why we believe there is much more to come from continuing to execute the investment base strategy that has delivered much improved results in Grosvenor. On top of that, the land-based reforms now present us with a once-in-a-generation opportunity to materially enhance the customer proposition. It provides us with the potential to broaden the appeal of casinos, accelerate growth and significantly enhance the group's cash generation. In terms of the specific content that we're going to cover today, I'm going to kick off with a reminder of The Rank Group investment case. Mark Harper will go into some detail on the progress we're making to become the U.K.'s most loved casinos. Chris Edgington will provide insight into the casino market and our customer base as well as how we're elevating the player experience. Vicki Shaw has traveled all the way from Scotland to cover the ongoing investment in our colleagues that's been an important part of our recent growth. I'll have a quick break after Vicki's section is finished. Mark will then return to talk about the drivers of future growth, and I'll come back to summarize what all of this delivers both for Grosvenor and the wider group. We'll finish with a Q&A session. So there will be an opportunity for those people in the room and online to ask questions. We'll provide more details on that later, but you can start to ask questions as the session continues. In total, we have around 85 minutes of content plus additional time to ensure we answer all of the questions that come through. The group's investment case can be broken down into 5 key component parts. One, our leading positions in the markets in which we operate in, an ever-improving customer proposition, highly engaged and skilled colleagues, clear drivers of revenue and profit growth and targeted investment that seeks to maximize shareholder value. So what makes our markets attractive? Well, gambling is an important part of our customers' leisure time. Our customers take gambling seriously, and they expect us to do the same. It's not a frivolous activity. As a result, revenues are relatively consistent and very resilient. And this is especially true in Grosvenor. We averaged GBP 7.3 million of revenue per week last year, and we didn't experience material variations from week to week. In both the U.K. and Spain, we have market-leading casino and bingo brands. Grosvenor is the largest U.K. casino operator with 50 out of 111 venues and market share of around 37%. And Chris will give a bit more detail about the market in his section. Mecca is the most loved bingo brand in the U.K. We've got 50 venues out of around 250, a market share of around 25%. Grosvenor and Mecca are the only operators of scale in the U.K. that can provide a seamless cross-channel experience in their respective sectors. And the venues also play an important role in driving digital performance. In Spain, the Yo brand has around 50% of the online bingo market with supplementary brands in casino and sports. And whilst Enracha does not have a large market share at a national level, the Enracha venues are clear leaders in their local markets. They've got great locations, flagship properties, they're well invested and well run. All of our businesses have high operating leverage and gambling businesses are highly cash generative. We've been rebuilding The Rank Group's performance and despite elevated investment levels, we've generated net surplus cash of GBP 55 million over the last 2 years, considerably better than expected. The business is on the right path to being highly cash generative in the future. Importantly, the licensing and regulatory model in casinos is such that there are high barriers to entry. Casino competitors are unable to open a venue without a license. We've got 77 of them, and they're restricted to permitted areas. In Grosvenor, we've been investing to materially improve the customer proposition, which Mark will explain later. We've invested in the quality of our live table gaming equipment, which is critical to ensuring tightly managed but entertaining table games. We have a fully upgraded electronic terminal estate that continues to deliver strong return on investment. And now the land-based reforms are allowing us to increase the number of gaming machines to better meet demand. They facilitate the introduction of new gaming machine manufacturers, broadening choice and the reforms also allow us to offer sports betting in casinos. To showcase the product proposition, we've also invested in improving our Grosvenor environments with the land-based reforms in mind. There are a number of venues, most obviously here at the Vic, which have been fully refurbished recently. They provide a fantastic place to play with an elevated customer service that we're aspiring to across the estate. Leicester, Gloucester Road and Glasgow are handfuls of other examples that showcase the Grosvenor brand very effectively. On the digital side of the business, we've invested in our proprietary platforms with the introduction of new content management system, new apps and much improved content. And the reach of those proprietary platforms will continue to grow over time. It will provide the backbone for the single membership system and the single wallets in both Grosvenor and Mecca as we improve the cross-channel experience. In land-based bingo, we've made selected growth investments, most notably to gaming machine areas. Where we've invested in both Mecca and Enracha, gaming machine revenue is particularly strong. We are a hospitality business at heart and the relationship between our colleagues and our customers is central to the group's success. We employ over 7,700 colleagues across the group, and each of our businesses has programs in place to support development of our colleagues. They also have ongoing plans in place to enhance the level of service that we offer. As Vicki will show you, these investments are being recognized and are valued by our customers. Customer satisfaction levels are seeing strong improvements. And rounding this all off, we have very experienced and highly capable leadership teams in each of our businesses, not least in Grosvenor. We first presented the growth drivers for the group at the Digital Capital Markets event in November 2023. They've remained reassuringly the same since then with some of the revenue and profit targets being achieved and further opportunity identified. Grosvenor performance will continue to benefit from the enhancements we're making to the proposition and the returns we're delivering from the capital investment. The increase in the number of gaming machines will accelerate growth and alongside the introduction of sports betting and the improvements we're making to F&B will broaden the appeal of casinos over time. Like-for-like digital revenue has grown by over 20% cumulatively in the last 2 years. And last year, digital was the most profitable business unit in the group. The technology road map we have in place gives us the confidence that we can continue to deliver strong revenue and profit growth in digital. In Mecca, having delivered mid-single-digit revenue growth for each of the last 2 years, we still expect the business to return to at least GBP 10 million of operating profit in the medium term. Finally, on Enracha, who doesn't love a business with a 26% sustainable operating margin. I know I do. The focus there remains organic revenue and profit growth. A recurring theme of our presentations over the last 12 months has been the return on investment we're seeing from our capital expenditure. Put simply, if we don't think a project will pay back within 3 years, it's unlikely to make the shortlist. We approach our capital investments in a disciplined, targeted and precise way to drive long-term shareholder value. We recognize that we're going through a period of elevated capital investment in order to maximize the opportunity presented by the land-based reforms. We're going to invest the money wisely, learning lessons and adapting if we need to. For the first time, we reported on return on capital employed at our year-end results. We see an opportunity for ROCE to improve to at least 20% in the next few years, up from 14.5% last year. The management team and the Board are also focused on delivering improved shareholder returns in the coming years. Alongside investing in the business for long-term sustainable growth, we see increasing the dividend as an important priority. We'll increase the payout ratio to at least 35% in the coming years. And once that's been achieved, we see the dividend growing progressively in absolute terms. These key aspects of the investment case have driven strong financial outcomes. Revenue has increased by a double-digit percentage in each of the last 2 years with all businesses in growth. In that time, there's also been a material improvement in profitability with group operating margins having grown 500 basis points to 8%. The group has a strong balance sheet with a net cash position at year-end of around GBP 45 million and a good long-term financing structure. Over the last 12 months, total shareholder return has also started to increase markedly. Moving on to today. The group's vision is to excite and entertain our customers. We're increasingly doing a great job of delivering on that vision across our business units. And hopefully, you'll get a sense of that today. We've done some heavy lifting over the last few years. We've addressed the historical backlog of infrastructure investment, improved the product proposition, elevated our venue environments and developed the digital platforms. So the foundations are now strong. And the plan is for more of the same. That's further low-risk investment that will continue to drive like-for-like revenue growth, which is critical in a business environment with inflationary and regulatory pressures. And then we've got the land-based reform, a transformative opportunity on which we'll give you some early insights today. So allow me to introduce Mark Harper, Managing Director of Grosvenor venues. Mark and the team can be rightly proud of the work that's been done in laying the foundations over the last few years. And I know they're determined to capitalize on the fantastic opportunity that we have in front of us. Mark?

Thank you, Richard. Good morning. And on behalf of Grosvenor Casinos, welcome to the world famous Vic Poker Room. We're delighted that you've been able to join us. Just over 2 years ago, when I joined John, Richard and the Rank team, we set out our aspiration for the Grosvenor business, to be the U.K.'s most loved casinos, loved by colleagues, by customers and by shareholders. This is the journey we would like to share with you today. We are the U.K.'s leading casino brand with customers able to play both online and in 50 venues across the country. Our Grosvenor venues business has 4,400 colleagues and 1 million unique customers. In our last financial year, delivering GBP 7.3 million of net gaming revenue per week, having grown by 14% year-on-year. Our digital business has 500 colleagues and 250,000 unique customers. Net gaming revenue of GBP 1.6 million per week in FY '25, 22% growth year-on-year. A casino brand that excites and entertains customers in venues and online over the course of more than 10 million venue visits and digital player days each year, a brand in double-digit growth. We play in a market in which we have clear competitive advantages. We are the U.K.'s most recognized casino brand. Our customers can play both online and in venues with our 50 casinos providing the experiential heartbeat of the brand, allowing us to bring craft and heritage to our online experience. Our program of cultural change has energized and engaged our team. Scale enables us to offer choice. A Grosvenor customer can choose to eat and drink. They can relax and socialize. They can watch the big game or they can simply play. American Roulette, Blackjack, Three Card Poker or Baccarat, they could play live, tables with dealers who enjoy stream content, cash or tournament poker, the world famous Vic Poker Room or Goliath, the largest poker tournaments outside of Vegas, world-class slots content and of course, now sports betting. Our online business is powered by our own technology, allowing us to be more agile and responsive to customer needs and providing the capability for a seamless cross-channel experience. And all of this within a strict regulatory environment that limits the number and movement of casino licenses. We have strengthened our venues leadership team over the past 2 years with significant new hires in critical roles. I joined the business as Managing Director back in August of '23. The team at this time included Marcin Zawada as Chief Operating Officer; Tara Collet as Finance Director; and Richard Playle as Commercial Director. Since then, Vicki Shaw has joined as People Director; Chris Edgington as Chief Marketing Officer; and Samantha Collins as Operations Director, an energized, engaged and experienced team that has delivered 2 years of sustained performance improvement and provides the foundation for our future growth. Our near-term Grosvenor venues growth story has 4 distinct chapters. Our post-COVID recovery to GBP 5.9 million NGR per week, recovery in growth to GBP 6.4 million, delivering return on investment to GBP 7.3 million and building momentum to GBP 8 million-plus NGR per week before the benefits of land-based reform. With each chapter predicated on investing wisely in product, in environment, in people, in systems and process and with an ever-present focus on safer gambling. We believe we have the best live table gaming dealers in the U.K. casino sector, developed internally through our own Skills Academy with further on-site coaching provided by our central gaming team. Across our estate, we have 1,350 electronic table gaming terminals known as ETGs. An important part of our proposition, providing customers with a lower stake option compared to live tables. All of these have now been upgraded to best-in-class Novomatic terminals with 545 replaced in FY '25 alone, resulting in a 39% uplift in stakes, a 42% increase in NGR and a 45% return on investment. We offer poker in 38 venues, both cash games and tournaments. We have continued to expand our calendar, and we now have more than 500,000 individual tournament entries each year, culminating in Goliath, the largest poker tournament outside of Vegas, held in our Coventry casino with more than 13,000 entries, 6,000 unique players and a GBP 2 million prize pool. We have spent capital wisely, maintenance capital to address historic underspend and improve the efficiency of our infrastructure, growth capital to create modern premium environments and ensure we're well placed to optimize the benefits of land-based reform and signage programs to enhance the external impact of our venues. GBP 32 million of growth capital from FY '22 to FY '25, delivering an average payback of less than 3 years. This includes a major refurbishment at Leicester completing in August '24, a high-profile casino in the city center with a diverse customer base. One of our most successful casinos outside of London, but no investment of note over the last 10 years, a clear opportunity to create a modern premium environment well positioned to optimize land-based reform. We've completely refurbished both gaming floors, all externals, restrooms and all back-of-house areas. We have developed an external gaming terrace, introduced a premium sports betting lounge and provided the capacity for 80 slots in an optimized location. A GBP 4 million investment taken just over 4 months throughout which time, as with all refurbishments, we did continue to trade. Post investment, we have seen a 10% increase in visits. NGR has increased by 19%, delivering a return on investment of 37.7% and all of this before the benefit of 80 slots rather than 20. The Gloucester, a premium London casino next to the Millennium Hotel in Kensington and Chelsea, targeting higher-end players. A complete upgrade of the gaming floor restrooms, externals and a premium dining restaurant in keeping with the demand of an international clientele, a GBP 2.7 million investment completing in February '23. 23% increase in visits post investment, and NGR increase of 23% and a return on investment of 61%. And Merchant City, our largest Scottish casino in the center of Glasgow's Nightlife district, appealing to both regular players and leisure customers, a complete upgrade of both gaming floors, restrooms, signage and externals and all bar and restaurant areas, GBP 3.5 million investment completing in June 2022, a 68% increase in visits post investment, and NGR increase of 39% and a return on investment of 64.8%. Grosvenor is an experiential brand. It is not transactional. We build deep relationships with our customers, and as such, our people necessarily sit at the heart of what we do. Two years ago, we set out on our program of cultural change as part of our journey to become the U.K.'s most loved casinos, a program to transition our colleagues and our customers from liking what we do to loving what we do. This has been supported by investments in training and development, upgrading team rooms and back-of-house areas and the introduction of Connect, our in-house communications tool. Vicki will expand on this later, but we have seen our people metrics transform as this program has progressed. A 20% increase in colleague engagement, voluntary turnover declining by 26 percentage points and a 5-point increase in customer Net Promoter Score as a result of more engaged colleagues. We've invested in systems and process. Our table gaming management system provides all of our casinos with access to real-time table gaming data and analytics. This provides minimum pricing and table opening recommendations based on the number of players at any given time and their level of play. Too many customers on one table can slow the game down, reducing spin rates and frustrating players. Real-time data analytics and AI ensures we have the right number of tables open at the right price to deliver the best possible customer experience. Our venues also now have access to real-time slots data analytics, providing information on optimum floor layouts and game mix and identifying hotspots where we can locate our best-performing machines. This investment in data science and technology also allows us to personalize our customer experience and deliver a more tailored CRM journey, but more of this from Chris later. As we grow our revenue, we do recognize that we have to mitigate cost headwinds and increase efficiency in order to maximize profit growth. Last year, we launched Project Dynamo as part of our investment in systems and process, a program of initiatives targeted at optimizing our cost base at the same time as growing revenue, thereby improving profit conversion. We currently have 15 different projects in flight, and we're adding to this all of the time. Examples include data analytics, but I covered that on the last slide. The in-housing of our technical services team so that we can manage slots installations internally rather than having to outsource and enabling us to react more quickly to our data analytics recommendations and the streamlining of food production through menu engineering and investments in kitchen technology. 15 projects in flight and clear headway already being made. Live table gaming stakes have increased by 7% since FY '24. We have seen a 130 basis point increase in operating margin from 7.2% to 8.5% from FY '24 to FY '25. And all of this while retaining a laser focus on safer gambling and the protection of our customers from gambling harm. Investments in data and technology means that we can provide near real-time data to enable our colleagues to help customers better manage their gaming experience. At the same time, our 3 lines of defense framework provides a robust approach to safer gambling. Our venues player protection team, our central compliance team and our group internal audit function, all operate independently, but with the same common purpose of enabling our customers to play in a safe and responsible environment with a brand that they trust to protect them from gambling harm, a focus endorsed and reinforced by our colleagues in our biannual opinion surveys. This investment into the business has led to a sustained improvement in visits, in revenue and in profit over the course of the last 2 years. A 12.8% increase in visits from 4.7 million to 5.3 million per annum, a 23.7% increase in NGR from GBP 5.9 million to GBP 7.3 million per week, an increase in operating profit from GBP 16.7 million to GBP 32 million, a 91.6% increase and a 300 basis point increase in operating margin from 5.5% to 8.5%. This performance improvement is evident across all product verticals. Just under 90% of our NGR is made up from 3 core product categories. Live table gaming at 46%, slots at 27% and electronic table gaming at 16%, all with strong NGR growth over the past 2 years. Live tables at 14% CAGR, slots at 9% and electronic table gaming at 16%. And moreover, for those of you that did actually manage to get an Oasis ticket and in the words of Liam and Noel, the great wait is over. On the 22nd of July, the long-awaited reform of land-based casinos to permit additional slots and sports betting came into force, providing us with the opportunity to transform the performance of our land-based business. The global casino market has grown on the back of slots. So when comparing 2025 to 2019, it is slots that has driven the recovery of the global bricks-and-mortar casino market post-COVID, growing at 23% and now making up 57% of total gross gaming yield. In contrast, the limits placed on the number of slots in U.K. casinos has served to constrain growth. This is particularly evident when you compare the percentage of casino GGY coming from slots internationally, 81% in France, 75% in the U.S., 65% in Europe, but just 26% in the U.K. Grosvenor is well placed to capitalize on land-based reform. We're the most recognized casino brand in the U.K., 50 prime locations in most major U.K. towns and cities. The size of our venues provide space to maximize slots numbers. And scale makes us attractive to slot suppliers, providing the opportunity to increase the number of suppliers and access more exciting content and hardware. So now we have the fifth and the most exciting chapter of our story, accelerated growth to GBP 9.5 million plus NGR per week, a plan with 4 clear building blocks, a clear understanding of our customers and brand, our program of cultural change and continued improvement in colleague engagement, both essential enablers of our strategic growth drivers, the delivery of unrivaled products and service and the delivery of a seamless cross-channel experience. An accelerated growth strategy that will deliver a weekly NGR of GBP 9.5 million plus per week and a 500 basis point improvement in operating margin in the medium term. Thank you for your time. And now to explain how a better understanding of our customers and our brand will serve as a necessary foundation for our future growth, I would like to introduce our Chief Marketing Officer, Chris Edgington.

Thanks, Mark. I joined Grosvenor just over a year ago, having spent 10 years in the gambling industry a decade ago. I'm so excited to be back home. Customer-centric brand building or how we further improve Grosvenor's appeal in our market is the first enabler to our accelerated growth strategy. We have a clear definition of our addressable market, a strong understanding of casino customers and a continued focus on the player experience. These are informed by investment in data, automation and analytics to better meet our customer needs, tightly target audiences with more compelling marketing communications and build loyalty. We have a sizable addressable market. The U.K. venues gambling market is worth GBP 4 billion in gross gaming revenue. That's all gaming and additional sundry revenues. This is broadly broken down into 3 smaller groups with each with distinct audiences, betting shops, casinos and adult gaming centers. Grosvenor's core addressable market comprises casino customers, who play at the tables on electronic table gaming terminals, slots and poker. Land-based reform with our increased slots offer and sports betting allows us to broaden our addressable market and access more than our core casino customers. Grosvenor's broadened addressable market includes slots players and sports betters who visit adult gaming centers or betting shops, but are open to visiting a casino. We estimate that Grosvenor's broaden addressable casino market makes up about 48% of the U.K. venues gambling market. The U.K. digital gambling market is worth GBP 6.1 billion in gross gaming revenue. This covers online sports betting, casino and slots players. Grosvenor's addressable digital market comprises casino and casino-led slots players as well as those who only play slots. And we estimate that this addressable market makes up about 39% of the total digital gambling market. Today, Grosvenor has 1.25 million active customers across casinos and online. 75% of our casinos customers are male versus 66% online. Our casino customers demonstrate a higher propensity to play Roulette and Blackjack whereas slots dominate online. We see greater visit frequency from online players with as many as 22% of customers playing at least once a week. Our sweet spot and area for greatest opportunity are those that play in both casinos and online, and we'll discuss these cross-channel customers later. Grosvenor's customers identify as players, playing their game is something they take seriously. As a group, they're sociable, have high expectations and fully immerse themselves into the experience. However, there are some subtle attitudinal differences across our 3 segments. The prestige player seeks the thrill of high-stakes games where players about respect and recognition. In our face-to-face research, over 70% of prestige players said they like the sense of respect and being recognized for something I'm good at when gambling. These are our most valuable players. And every casino manager and their team knows them by name, looks after them personally when they visit and tailors their experience. The regular players spend the most amount of time in our casinos of all our customers. To them, it's a regular part of their routine and their local casino provides them with a real sense of community. They want to hone their skills and perfect their play alongside like-minded customers. As self-confessed experts, 70% of this group stressed that they enjoy talking about gambling with others who also gamble. Our casino teams run regular events and competitions to make their visits even more enjoyable. The leisure player wants to relax or be sociable. The play is about fun and enjoying the moment. These players told us, it's all about luck really, but I love the thrill. This group makes up over half of our customer base, but only 1/4 of its value. So we use this segmentation to improve our targeting in the messages we communicate showcasing our casinos, online and products as well as the incentives we offer. We've built a distinctive brand proposition that leverages Grosvenor's heritage, knowledge and expertise. We know that the casino market has 3 key truth: number one, the human truth. The instinct to play is binary. You're either a gambler or you're not. It's in your DNA. Secondly, the market truth. Over the past decade, the casino category has been marketed as generic, somewhat frivolous one-size-fits-all entertainment. And thirdly, the brand truth. Thinking about how we, the Grosvenor team see ourselves, i.e., the 4,900 of us across casinos and online. We're experts who are passionate at what we do, and we're proud to do it well. In essence, we craft experiences. So taking these 3 truths as context, we've developed a powerful internal brand summary. Grosvenor Casinos, the home for natural-born players crafted by those who know for those who play. We use this for internal briefings and as inspiration for teams as we develop products and experiences, source talent, service training and more. For our customer-facing campaigns or our equivalent of Nike's Just Do It or Tesco's Every Little Helps, we're starting to use the strapline for the player, as you can see on the screens around the casino. And we believe this neatly and powerfully sums up the Grosvenor Casino brand. We need to exceed our players' expectations at every touch point. And to do that, we continue to better understand the casino customer journey. We use a 6-stage journey incorporating casinos and online with each stage mapped out in detail from instinct decision-making, the start, the play itself, finish and reengage. This final stage importantly stimulates demand and drives repeat visits. This approach is used to ensure that we provide customers with compelling messages, help, guidance, encouragement at every touch point to ensure that we better serve their needs and earn their loyalty. The play is at the center of the casino customer journey, both in online and in venues. There are various motivations behind playing, including to relax, to compete, celebrate a special occasion for the thrill, et cetera. And we see 3 stages to the play itself. Firstly, the strategy, how the player decides to play, for example, the basic Blackjack strategy to choose single numbers or odds and evens on Roulette, which game variation or steak choice in slots or to be aggressive or tight in poker, et cetera. The second stage is the epicenter of the entire experience. This is the anticipation or as we see it, the moment before the moment. That split second before the card is dealt, the ball drops or the reels stop. This thrill before the outcome is what players truly love. Finally, the celebration, which is not always about winning. Indeed, a poker player may be pleased if he or she has played a hand well and minimized exposure or loss or a favorite slot, a favorite feature comes up on a slot. The play is the point in the casino customer journey that Grosvenor demonstrates true gaming expertise and craft an authentic, trusted and premium experience for the player. This is our point of difference. This focus on the play also informs our approach to embedding customer into our growth drivers, namely product propositions and cross-channel experiences, which Mark will talk about later. We're building a blueprint for a future differentiated Grosvenor player experience in which venues and online with signature moments. These are standout and specific events where we elevate the player experience to set the Grosvenor offer apart from other casinos. These include WOW first impressions, where we will reframe the role of reception and receptionists in our casinos, improve log-in speeds online and use data to support customer recognition and interaction across both channels. Breathtaking anticipation. Our dealers deliver the moment before the moment better than anyone else with their expertise and game narration. Our scale ensures that we have the very best products and games. Finally, Fantastic Farewells, where we're exploring personalized single brand rewards for playing in venue and online. We will continue our focus on and invest in data automation and analytics. We're segmenting every customer into prestige, regular or leisure groups and embedding them into Grosvenor's core databases, dashboards and CRM systems. We're deploying behavioral insights and predictive models using machine learning. The optimization of copy and content using AI in our creative services team has reduced the time projects take to deliver. Further, we're using AI and player protection to automate manual reports, improve data quality and deliver faster customer insights to the venue teams. These are powered by our central engagement platform, a critical foundation in which we've invested around GBP 5 million over the last 4 years. This provides a single trusted source of truth for all our customer interactions and more. This work enables us to drive more relevant personalized communications, build insight and track marketing return on investment whilst decommissioning legacy platforms and drive efficiency. In conclusion, we continue to build Grosvenor Casinos' customer-centric brand. We benefit from our foundations, namely a broadened addressable market, an engaged and active customer base, clarity around who our players are and what they want from which we have a strong and well-articulated brand proposition, a clear vision and plan to further improve the customer journey and differentiate us from our competitors, both in our casinos and online. With land-based reforms, we're well placed to realize the identified potential with upweighted slots and a new sports betting offer. This brings increased choice and better products to customers. Our investment in technology, which has built our segmentation, predictive analytics and optimization capabilities enables Grosvenor to further personalize our communications and offers. All of this means that we're attracting more customers into our casinos and online. We're building loyalty among Grosvenor's existing customers and capturing market share from competing casinos. We actively seek to attract slots players who currently visit adult gaming centers and encourage sports betters who visit traditional betting shops to experience our offer. Finally, by continuing enhancing our cross-channel experience and integrated offer, we're well placed to motivate more customers to enjoy the best of both worlds, playing with Grosvenor, both at our casinos and online. Now Vicki will take you through how critically important the relationships our colleagues have with our customers in delivering the excitement and fun of what we do. Thank you.

Thank you, Chris. Good morning. I'm the People Director for Grosvenor, and I joined The Rank Group 2 years ago. It's my absolute pleasure to have the opportunity to speak with you today about the incredible colleagues who make Grosvenor Casinos what it is. As Richard and Mark have both highlighted, our culture and sustained colleague engagement is a strategic enabler for our longer-term commercial success. Grosvenor is, without question, a people-led business, and we need to ensure that our most significant asset remains a true source of competitive advantage. We are the largest business within The Rank Group, employing 4,400 team members across our 50 casinos. This scale represents not just operational capacity, but is a platform through which we can create significant shareholder value. Here at Vic, we have a team of 400 people, making this one venue a substantial business in its own right. You'll also see from our environment today that our venues are far more than just places where customers come to play. They are vibrant showcases of our brand and rather glamorous and exciting workplaces. For us, our people and our culture are a strategic enabler that drives operational excellence, customer loyalty and shareholder return. And our people-focused approach is what sets Grosvenor apart in our competitive market. Our medium-term growth strategy is underpinned by our 3 key people pillars, each designed to drive commercial performance, unlock new market opportunities and deliver sustainable value. I'll explain a bit more about each of these in detail today, covering our from Like to Love cultural change program, establishing a blueprint for how we operate through both clarity and consistency and our continued priority to invest in our colleagues. By focusing on these 3 core principles, we're building the culture, the capability and leadership skills needed to accelerate growth and outperform our competitors. We take a largely data-led approach to our people strategy using technology and analytics to provide us with insightful KPIs. This enables us to measure the return on investment through our engagement initiatives, make sure we have the right people in the right place at the right time, whilst also helping to reduce inefficiencies across scheduling and admin processes. Across all of our key people metrics, we continue to build momentum. As a consequence of our culture program, we have achieved a significant and sustained uplift across both colleague and customer engagement over the last few years. Our employee engagement has risen from 7 to 8.4 out of 10, which places Grosvenor in the top quartile against the consumer industry benchmarks. And over the last few years, our voluntary turnover has reduced by 26 percentage points to currently sit at 27%. Whilst there is still more work to do here, our relentless focus on reducing attrition has enabled our management teams to concentrate their efforts on driving customer satisfaction, increasing business performance and reducing time spent on interviewing, induction and onboarding. This reduction in our cost to hire and training spend has also benefited us through an increase in operational efficiency, increased retention of our key skilled personnel and stronger, more enduring customer relationships. As a direct result of an improved employee engagement and retention, we've also seen a measurable decline in short-term absenteeism, which has translated into a significant year-on-year reduction in both overtime and agency staffing costs. On the customer side, our Net Promoter Score has risen from 64 to 69. As outlined by Chris, our strategic people priority for the next 12 months is continuing to enhance the service excellence capabilities of our teams, particularly those in front of house. The investment in our signature moments is and will continue to be a key differentiator, driving stronger customer engagement, increasing dwell time and ultimately contributing to stronger revenue performance. This is our USP. Grosvenor's 24/7 operating model also enables us to attract talent from diverse backgrounds and lifestyles. This flexibility supports our commitment to building an inclusive culture, which is not only ethically right, but also helps to drive higher performance through diversity of thought. Across our venues, we're proud to see this reflected in our teams, and we're committed to ensuring it's equally represented in our leadership pipeline. In Grosvenor, we currently have 43% of women in leadership roles, which is 8% points higher than the FTSE 350 benchmark companies. And our median gender pay gap is now 4.3%, which is well below the U.K. average of 8.6%. We will continue to remain committed to fair and transparent pay for all colleagues. Our cultural transformation journey is called from Like to Love and was started around 2 years ago. It's not a secret that great customer experiences start with teams who feel supported and valued. And that ultimately all comes down to great leadership where engagement is built through trust, clear purpose and consistent support. The purpose of from Like to Love is for us to provide the ability for every colleague and consequently, every customer to move from liking us to loving being part of the Grosvenor brand. Internally, for our teams, our from Like to Love framework helps us to communicate and embed the 4 principles that will support this progression. Number one, brave and determined leaders, who are bold and decisive doing what's right for their teams. Number two, a place where everyone is proud to work and also feels proud to belong. Our teams are clear, capable and motivated to be themselves and to bring their skills to life. Number three, our 5 winning behaviors, which are at the foundation of how we now work together and are also critical in moving the down to the fourth element of the framework, which is why our customers love us. Our winning behaviors are having a real business impact. They have evolved from words on a page into powerful drivers of our performance. They are shaping how we work, guiding our decision-making and delivering closer alignment between our strategy and every day activity. What sits at the heart of these is a simple idea. By embedding these behaviors across every part of our business from frontline service to leadership, we are building brand strength, operational consistency and value at every customer touch point. Each behavior supports our shared purpose to become the U.K.'s most loved casino, and they are helping us build a common understanding of what's consistently expected across all of our teams. We will all find a way, take ownership, dig deep and do what it takes to deliver results. We will choose to be happy, bring positivity, energy and shine like a diamond. We will put people first. Our clubs are only as good as our teams feel, so we need to prioritize empathy, well-being and local support. Show you care, put your heart into every customer experience, make it personal and make it matter and challenge for better, continuously question yourself and others to improve how we do things. Both our winning behaviors and from Like to Love framework are now part of how we work every day and help us to provide a blueprint for scalable operations. What's very exciting is that our teams aren't just going along with the change, they are truly embracing it with increased local ownership and collaboration driving venue problem solving and innovation through our network of ambassadors, our game changers, we have streamlined processes, adopted standardization and reimagined our people KPI measurements. And our latest employee opinion survey results are a great reflection of this shift. Since introducing from Like to Love, we've seen encouraging improvement across all the key areas that drive engagement, including increased advocacy for Grosvenor as a great place to work, stronger understanding and clarity around our strategy and plans and stronger leadership support for team personal development. And at the heart of all of this, a steady positive sentiment from our colleagues who feel connected to our purpose. So what's next? Our leading Like to Love program will continue to deliver strong returns as a key strategic lever. With over 500 managers engaged to date, the outcomes are clear and compelling. Strong leadership for driving performance, deeper interpersonal connections, enhancing team cohesion and creating a more empowered workforce for accelerating innovation and productivity. The next 12 months will also see us continue to build our winning behaviors into every stage of the employee journey. Stronger attraction, induction and onboarding will mean higher retention, increased engagement and lower costs from day 1. By continuing to invest heavily in our leadership development, we will also ensure we are future-proofing our business. Over the medium term, we expect our planned initiatives to contribute to the uplift in our revenue to at least GBP 9.5 million NGR per week, a continued reduction in our leadership turnover and faster execution of our strategic initiatives. This month, we are delighted to be launching our second bespoke program to develop our future managers. Backed by a chartered management qualification, this is a unique opportunity in the casino industry, which will strengthen our internal succession pipeline, enhance our external attraction and also provide an opportunity for defined career pathways. We will also continue to invest in our 125 game changers, who are now actively embedded across our business. As the operational ambassadors for our cultural change, this is a critical role and one which will help us maintain a consistent drumbeat around from Like to Love strategy while keeping it grounded in reality for our teams. We're genuinely excited about the future, not just because of what we're building, but because of the tangible results we are already seeing. We're changing the way we work around here, and it's more than just about improving processes. It's about people, it's about purpose, and it's also about unlocking potential. We have built strong momentum and what comes next will continue to be shaped by our commitment to clear leadership, transparent communication and those everyday moments where the right behaviors and our culture are critical to help us deliver long-term value. Thank you.

Welcome back. Before the break, you heard from Chris and Vicki how a clear understanding of our customers and brand, our program of cultural change and continued improvements in colleague engagement will serve as essential enablers for our strategic growth drivers. The first of these being the delivery of unrivaled products and service through continuing momentum in table gaming, transforming our slots proposition, investing to create modern premium environments and the introduction of sports betting. Additional slots and introducing sports betting will be transformational for Grosvenor Casinos. But table gaming is and will remain of critical importance to our business. Live table gaming played at a table with one of our expert dealers makes up 46% of our total NGR while electronic table gaming providing that lower priced table gaming option makes up a further 16%. Both formats have delivered double-digit growth over the last 2 years, live table gaming at 14% CAGR and electronic table gaming at 16%. And we have clear opportunities to continue this growth through continued investment in new wheels and tables with a proven return on investment. The ongoing development of electronic table gaming content with additional games and new formats to further replicate the live table experience, additional side betting opportunities increasingly popular with customers and the further embedding of our table gaming management system and data analytics to optimize customer experience, ensuring the right number of tables are open at the right time at the right price. But it is land-based reform, which provides the inflection point for our venues business. On the 22nd of July, the reforms for land-based casinos came into force, permitting casinos to increase slots numbers from 20 per license to 80 per venue and introduced sports betting. Pre-land-based reform, the 1968 Act casino was only permitted to have 20 B1 slot machines with a jackpot of GBP 10,000 on a stand-alone machine or a GBP 20,000 progressive jackpot on linked machines. With the result being that machines at peak times were overcrowded and demand could not be satisfied. Customers played for longer because if they stopped, there was no guarantee of a machine being available when they wanted to play again. And there was a limited range of cabinets and content with only 2 major suppliers in the marketplace. Land-based reform now provides the opportunity to transform this customer experience. With 80 slots per venue, demand for the first time can be met. There is less waiting time for popular titles. Customers are provided with a more enjoyable relaxed gaming experience. Scale allows us to elevate our service experience, employing more team members and providing a better food proposition more suited to slots players. We've been able to increase from two suppliers to seven and introduce more exciting game packs and hardware. And we've widened the portfolio of products that we offer, introducing B3s with GBP 500 jackpots popular in AGCs and Bar Top Slots to create a Vegas-style experience, all of which will, in time, broaden the appeal of casinos and attract new customers. And this is aligned with our commitment to safer gambling. The chart on the left demonstrates the principle of customers playing for longer with just 20 slots available. When our slots were in highest demand at peak time, dwell time, that is the average length of time a customer stayed on one machine without a break, also increased. Customers were reluctant to stop playing their favorite game, knowing that when they did want to play a game, the chances were that a machine wouldn't be available. In contrast, as machine numbers increase and demand is met, this provides for a more relaxed, enjoyable experience with customers more willing to take breaks. Land-based reform provides Grosvenor with the opportunity to increase slots numbers from 1,367 at the end of FY '25 to 3,144, an additional 1,777 slots, an increase of 130%. This does include Scotland, where there is still work to be done to get land-based reform over the line. Of these additional slots, we will install 850 in year 1, all of which will be added prior to Christmas. We've moved quickly. As of this morning, all 38 of our license applications have been approved. 562 slots have been installed across 22 venues. And we have added 5 new suppliers, taking our total to 7. You will, though, probably have noticed a distinct lack of slots here at the Vic, where we still have 40. This is because the approvals were only actually received on Monday. We will move quickly to install the additional slots. Please take care when leaving, there's every chance our install team will hit you on the way up through the stairway. Our view is that there will be a number of different stages of growth as we transition our slots proposition through to maturity. In the first stage, as we add additional slots, we will, for the first time, be able to satisfy existing unmet demand. After this initial launch phase, we will build market share as a result of a better product range, more exciting content and hardware and optimized layouts. And as we continue to invest developing world-class slots areas, modern premium environments, elevated food and drink experiences, exceptional service and great sports betting offers, so we will further broaden the appeal of our casinos. Despite these different stages of growth, we have taken the opportunity where we can to increase our slots numbers now to their maximum potential ahead of the demand curve. This approach is cost efficient, reducing any additional installation costs. There is less customer disruption and minimal impact on OpEx costs as many of the additional slots are on revenue share. Moreover, this provides the opportunity at an early stage to deliver more exciting and entertaining experience for our customers, add additional suppliers, provide better content and hardware and widen the product range to attract new customer segments. The specific number of additional slots that we've added to each venue has been determined by current unmet demand, the extent to which there is immediate demand for additional slots from existing customers. Market potential where we know we have the opportunity to grow market share and attract new customers and physical capacity, the space available to accommodate extra slots. So Didsbury, just outside of Manchester. From our occupancy data, we knew we had clear unmet demand. And while we had lots of space, we don't think we have the market potential for a full 80 slots. So here, we have added an additional 30 slots taking the number from 20 to 50. At Cardiff, clear unmet demand and a bigger market opportunity, but with some space limitations. Here, we've added a further 15 slots, increasing from 20 to 35. At Bristol, very high unmet demand and significant market potential, not least as we have recently seen a competitor casino close. But again, limitations on space. Here, we have added an extra 10 slots, taking our number from 20 to 30. While at Reading South, we do have current unmet demand, but more importantly, significant market potential. And Reading South is a large casino with lots of space. A good example where we have taken the opportunity now to move straight to 80 slots ahead of the demand curve, allowing us to straight away provide a more exciting and entertaining slots proposition that will appeal to both existing and new customers. So what have we seen so far? If we look at these same 4 Venues as representative of the wider estate. At Didsbury, we've now traded for 4 weeks with the additional 30 slots in place. In that period, our slots NGR is up by 97% versus prior year, and the average weekly NGR per incremental slot machine is GBP 517. At Cardiff, 6 weeks of trading with the additional 15 slots. NGR is up by 64%, but with a higher average weekly NGR per incremental machine of GBP 1,154, reflecting the level of unmet demand. At Bristol, and here, it's important to note, we have not measured against prior year because this time last year, the competitor casino that has closed was still trading. So we've used data that actually reflects the period after which this casino closed. With 6 weeks of trading and just 10 extra machines, our slots NGR at Bristol is up by 42%, with an average weekly NGR per incremental slot machine of GBP 2,156, again, reflecting the level of unmet demand. Finally, Reading South, our first casino to have additional slots, increasing from 20 to 80 to take advantage of the significant potential of the marketplace. Reading South has now been trading for 8 weeks. And in that time, we have seen slots NGR grow by 114% with an average weekly NGR per incremental machine of GBP 652. This lower number reflecting the fact that we've taken the opportunity to install the full 80 slots ahead of the demand curve. Overall, across all venues where we have added slots, our average weekly NGR per incremental slot post-installation is GBP 651. It's really early days. Performance is highly variable. We are seeing changes from week to week and venue to venue, but we're encouraged by these early data points, especially as we are still very firmly in our launch stage. Capital investment has an important part to play in optimizing the benefit of land-based reform. As we have spent capital in recent years, we have done so with the clear intent of making sure that we are future-proofed to add more slots. As a result of this investment, we have the capacity in the space to add an additional 850 slots this financial year, additional slots, which will, in turn, accelerate returns on investment and result in a payback period of less than 3 years. This investment program includes schemes at Southampton, Brighton and Bolton, where we're currently on site. Southampton is one of our best-performing slots venues. We're spending GBP 500,000 on a minor refurbishment to optimize the entire gaming layout and create a new enlarged slots area with capacity to increase from 20 slots to 65. Brighton, high-profile seafront location opposite to pier, a GBP 2.6 million major refurbishment to completely upgrade the main gaming floor, introduce an elevated F&B offer, increase slots capacity from 40 to 80 and upgrade all back-of-house areas, restrooms and externals. And Bolton, a location that has had no investment in more than 10 years. The GBP 1.8 million major refurbishment encompassing the gaming floor, back-of-house areas, restrooms, signage and a high-quality slots floor of 80 machines from the previous 20. As we look to further increase our slots numbers over and above this initial 850, we will continue to invest in our venues, assuming obviously that we continue the delivery of our payback hurdles. with investments encompassing the required structural alterations to accommodate additional slots in the best possible locations. So at Coventry, the Home of Goliath, we're planning a GBP 3 million spend to increase the slots capacity from 40 to 80 in an enlarged optimized area, refurbish the venue throughout, including new carpet, decor, lighting, furniture, customer restrooms and team areas, create a purpose-built sports betting lounge and upgrade all external signage. At Liverpool, a GBP 2.5 million spend to increase gaming machine capacity from 40 to 80 slots, refurbish both gaming floors, upgrade all signage and externals and enhance the outside terrace area. And at Newcastle, a GBP 3 million spend to fully refurbish the venue throughout, increase the slots capacity from 20 to 80, relocate the main bar to ensure an optimized slots layout, upgrade the external terrace and upgrade all externals and signage, investment that will serve to increase slots provision, create modern premium environments, broaden the appeal of our casinos and deliver a payback period within 3 years. As well as being able to increase from 20 slots to 80, land-based reform also allows for the introduction of sports betting. This is less tried and tested, but an opportunity we are nevertheless excited by. This is a sizable market with land-based sports betting generating GBP 1.2 billion of gross gaming revenue annually. Licensed betting offices close at 10:00 p.m., while we can open 24 hours, providing sports betting throughout that time in a premium modern environment with great food and drink. Sports betting is a staple of casinos globally, with most major U.S. casino operators integrating sports betting into their properties. And sports and sports betting will serve again to broaden the appeal of casinos. We will trial 4 sports betting lounges initially in 7 of our casinos at a capital cost of between GBP 100,000 and GBP 250,000 per lounge. A sports betting proposition that will offer a premium dedicated sports viewing and betting area, open 24 hours a day, multiple high-definition sports screens and real-time odds displayers, self-service betting terminals and electronic table gaming terminals, a dedicated service team with food and drinks served to the table, the perfect place to watch and bet on sports. At other casinos, we will look to integrate the SSBTs throughout the gaming floor at a minimal capital cost. This will still provide a 24-hour sports betting offer, supported by screens showing sport throughout the venue and betting odds displays together with bar top sports betting with sports screens behind the bar, that full Vegas-style bar experience. Land-based reform provides the inflection point for our business. But it is a seamless cross-channel experience that still provides our point of difference, and this stands as a further catalyst for growth through driving improved retention and deeper customer relationships with the brand. Most casino players seek a multichannel experience with more than 70% of gamblers playing both in venues and online. Customers don't think in terms of platforms, they think in terms of brand. Our venues provide the perfect advertising billboards for building awareness of our online offer, 50 casinos across the U.K., over 100,000 customers each week, 1 million unique players, 5 million annual visits. The delivery of a seamless cross-channel experience provides a clear point of difference and one which we are best placed to deliver with our technology providing both agility and speed to market. And cross-channel players are worth more. They visit and play more, they spend more and they have a greater retention rate than single-channel customers. In the past, we've operated 2 separate platforms under one brand name. As a result, we've offered customers channel-specific products and content. We've communicated to customers through separate channels. We've expected customers to sign up separately in Venues and Online. We do have a way of linking accounts, but it's manual and complicated, and we reward and recognize customers based on their play in each channel. Our future opportunity is really clear. More personalized and tailored experiences, a single sign-up journey, an enhanced single wallet that can be used to bet anywhere, integrated rewards and recognition for play across both channels. Seeing a customer as a customer of the Grosvenor brand rather than a specific channel. We have made some progress. We've improved the representation of our venues online. Our venues promote grosvenor.com extensively, providing a unique billboard for our online offer, while our live front product provides the opportunity to play live tables with an expert Grosvenor dealer in a venue from the comfort of home. But we still have lots to do. We need to provide more integrated content and formats, personalized offers for both channels, available and stored in the app, a single sign-up process provided for frictionless entry into our venues, an enhanced single wallet, allowing customers to bet both online and in venue from the same account, and rewards and recognition based on play in both channels. We are clear on the opportunity that seamless cross-channel provides, and we're over the building blocks and the technology required to deliver this. We are at a key inflection point of our growth plan. We have built solid foundations for our next stages of growth. We have strengthened our venues leadership team and have invested wisely in product, in environment, in people, in systems and process, all while retaining an ever-present focus on safer gambling. Over the last 2 years, we have seen sustained improvement in customer and colleague engagement, in revenue and in profit. We are now faced with a once-in-a-generation opportunity of land-based reform, permitting the increase of slots numbers from 20 to 80 and the introduction of sports betting. We have a clear plan to accelerate growth and take advantage of this inflection point. A plan that will deliver unrivaled products and service as we continue momentum in table gaming, we transform our slots proposition. We invest to create modern premium environments, and we introduce sports betting. And a plan that will deliver a seamless cross-channel experience. An accelerated growth strategy with a medium-term goal of GBP 9.5 million plus NGR per week and a 500 basis point improvement in operating margin. Grosvenor Casinos is entering a new era of gaming, an era in which our deep understanding of our customers using insights and data will drive personalized engagement and build lasting brand loyalty. An era in which the expansion and transformation of our core gaming propositions will broaden the appeal to a wider audience. We will invest to create modern premium environments and elevated propositions that excite, that entertain and that redefine the player experience. We will provide customers with a seamless cross-channel brand experience, consistent and connected play across every touch point. A new era at the heart of which will sit our most important asset, our people, our expert colleagues who will bring this new era of gaming to life. Thanks for your time.

As you can see from that video, it's not just the Vic that looks fantastic. Leicester and other venues up and down the country are all showcasing the Grosvenor brand, a new era of gaming indeed. So recapping what you've heard on how Grosvenor will deliver at least GBP 9.5 million of NGR per week. Reassuringly, a large part of it is more of the same, and this is key. We're clear on what's worked well, and we're applying that formula with precision and adapting where we need to. We stand to benefit further from investments already made, not least here at the Vic. But also from the electronic roulette that completed towards the end of the last financial year, the investment in tables and the table management system, leveraging our position as the home of poker in the U.K. and the improvements to customer service and the cross-channel experience. We'll continue to make investment decisions in a disciplined manner with a target payback on growth CapEx of less than 3 years. And that also applies to the investments we're making to capitalize on the land-based reforms. As Mark explained in detail, the machine rollout is progressing well. We understand the phases of growth that will deliver returns from the additional machines, and we're broadening the appeal of casinos to a wider audience. We're really confident that GBP 9.5 million per week is an achievable medium-term target. There's also a clear plan to grow the operating margin. Clearly, in this regard, revenue growth is critically important. We've got the benefit of high operating leverage. The drop-through to operating profit from incremental revenue is strong, and whilst the exact operating profit contribution depends on the product group and also the venue. Each product group is taxed differently. And for some product groups, the rate of tax paid increases as our revenue increases. So I'll give you a few examples. In table gaming, on average, the profit contribution is 75p for every GBP 1 of additional revenue. It could be as high as 80p in some casinos and it drops to 50p here at the Vic, which is an outlier where revenues are the highest in Grosvenor. The average incremental margin on electronic gaming is also 75p in the GBP 1. For the additional gaming machines that we're rolling out. The incremental profit contribution per GBP 1 of revenue is expected to be around 50p to 55p. That allows for machine gaming duty at 20%, revenue share paid to the machine manufacturers of another circa 20%, plus some incremental promotional spend, energy costs and some additional costs of servicing the new machines. Poker and Sport will also contribute nicely to fixed costs. Just a few words on the cost pressures. So employment cost increases are really well documented. The higher national living wage and employer national insurance contributions, both effective from April, impact the group by an annualized GBP 19 million. Grosvenor with the largest colleague base bears the lion's share of that increase. Historically, casino duty brands increased every year with inflation through a process called revalorization. However, since 2022, duty bans have remained frozen, resulting in an effective tax increase each year. Depreciation will also increase due to the capital investment and there will likely be other cost pressures that we have to manage through. You can see easily why revenue growth in our business is critically important. But alongside that, the efficiency and effectiveness programs that we run within Grosvenor also have an important role in mitigating some of the inflation. Despite the cost pressures, we're confident in delivering the 500 basis points margin improvement in the medium term, bringing it all back together at a group level. We've got clear medium-term revenue and profit drivers in each of our business units, and we've taken you through the plan to deliver the revenue and margin targets in Grosvenor. The Digital business also has significant revenue opportunity in front of it, and the operating margin will continue to improve there from the end of this financial year. We've got plans to return Mecca to double-digit operating profit alongside the material contribution that comes from the Mecca Digital business. And Enracha will also improve from here. Those growth opportunities give us confidence that we're well on track to deliver at least GBP 100 million of operating profit. We've seen strong return on investment thus far, and that's informed the ROCE target of at least 20%, with a normalized level of CapEx at circa GBP 50 million. Combined with that higher profitability, the group will be back to generating significant amounts of cash. That gives us more strategic options for the future, but with the primary focus being on maximizing total shareholder return. With that, I'm going to hand over to John, who's going to host the Q&A session.

Good morning, everybody. Thanks to Richard, to Mark, to Vicki and to Chris, who are now going to -- when these chairs are in situ, come and join me, if you wouldn't mind. I'm going to turn to questions. We're going to take questions from the room, first of all, kind of normal rules apply. Hands up, tells us who you are. There's a roving mic on the way to you and who you are and where you're from just for the benefit of those online. Questions online, we'll deal them when we'll come to at the end, and we'll pick up any points that have been raised online that have not been raised in the room is what we're going to do. So if there's a roving mic, I think we're going to -- thank you very much indeed. We're going to start. We're going to start with Ivor.

Ivor Jones from Peel Hunt. You've shown us a snapshot of the revenue from incremental machines in certain locations, and I'm trying to understand how much weight to put on that improvement. You showed us a graph of a hockey stick of early stage and then continued improvement. So should we think about those numbers going up? Or is there a competitor action we should think about that might bring them down again? Can you help us think about how much we should use those as a platform for making forecasts?

So I probably will hand that to Mark. But what I'm going to do is hand it to Richard in the first instance, and then I'm sure Mark will add. Let me start with Richard.

Yes. So we've got machines in venues for a maximum of 8 weeks. So Reading South was the first venue that had additional machines. It was the first possible day that we could add additional machines after the local authority had approved the license application. So 8 weeks, I would say that's kind of pretty early days. And as Mark said in the presentation, you saw from the numbers actually, it's quite a broad range of outcomes so far, both in revenue growth year-over-year, incremental revenue per machine. But what I think you do see from the early results is clearly unmet demand that was unable to be delivered on with the restricted number of machines. So Bristol and Cardiff kind of give you that evidence of that unmet demand really, really clearly. So I'd say so far, we're pretty pleased with how it's gone. The launch phase, it lasts longer than 8 weeks. So we've got a lovely Christmas period with high footfall that coming into over the next few months. So I don't think that is the point where you kind of draw the line and say that's what it's going to deliver. And at the moment, GBP 651 is an average of quite a broad range. But I'd like to think it's going to grow from there. If you take GBP 651, extrapolate it out 52 weeks times by the number of machines that we're going to install, that's a pretty reasonable number. That's over GBP 50 million worth of revenue. And with a good drop-through to operating profit, you can see that's going to -- you can see why we're excited about the opportunity we've got in front of us.

Mark, anything to add?

Yes, a couple of things to add. I think in terms, Ivor, the point about, is that sample representative? We think it probably is. We've still got lots of our biggest opportunities still out there. The Vic, as I explained, we've only got 40 slots in the Vic. We haven't got our full complement of 80. We've got businesses like Berry New Road, Liverpool, fantastic slots operations that we haven't added incremental slots to. The other point that I think you asked was about competition. There has been movement in London. So I think the London competitors have moved quite quickly to get up to 80 slots. Outside of London, it's varied the way in which our competitors have reacted. We think we have got the bigger opportunity because of our scale and the square footage of our casinos. So we have moved very quickly because we think that's how big the opportunity is.

Can I follow up with another question on slots? Mark, you talked about people wanting to play the most popular games. In this new world, is there an economic incentive for the suppliers to swap out machines aggressively, to optimize the park of machines to what people want to play? Or is there a cost for them they don't want to bear? How do you manage this much larger park of machines?

Well, certainly, a number of the relationships that we now have our slots provided on rev share. So it is absolutely in our suppliers' interest to make sure that they provide slots that are exciting, entertaining that customers want to play. We see it as a partnership, and it is absolutely in their interest.

And last one. Can I just check on any impact on table game and electronic table game revenue as a consequence of the machine uplift?

Instinctively, we think that there could be, if there's going to be cannibalization in terms of electronic table gaming. We don't think there will be much impact on live tables. But while we think that instinctively, we haven't seen it yet. So we think there could be some cannibalization. But from the numbers and the data that we've got so far in the 8 weeks of trading, we haven't seen that yet.

Let me just add to that, if I may, which is we are still really early days, so a massive health warning for everybody on what you've seen this morning. We thought it's best to show you what's and all, how we're performing so far. We're pretty encouraged inevitably by what we've shown you and what we've seen, but it is really early days. So things like substitution of other products, it's not evident today. Will it become evident? Logic says there will be a level of substitution, but it's not evident today. But it is like really, really early days. I think the sample of venues that we put machines in is a pretty average sample. I don't think this is the better venues. I don't think it's the worst venues. It's a pretty average sample there. There are venues which largely selected themselves by virtue of being ready to install machines. We've got a lot of venues that have got 2 licenses. We've got some with 3 licenses, where we need to do more capital works. We showed you some examples this morning where we need to spend more money in order to put. But actually, we think there are some of the better opportunities, the big opportunities. And of all the venues in the U.K. where you'd expect the unmet demand to be at its greatest, it's here, and we haven't put any slots in here yet. So I think we're pleased with where we are, still a lot to learn, still a long way to go.

Richard Stuber from Deutsche Numis. Just a few from me, please. First on sports betting. I think you said you're going to be trialing sort of 7 new formats. Can you say what the total could be? And in places where you don't have enough sort of floor space, would you install just SSBTs without sort of the full on? And then the follow-up question to that, I guess, is, out of the growth from GBP 8 million to GBP 9.5 million per week in terms of revenue, how much do you think will be coming from sports betting, and similarly, how much do you think from machines, and how much basically on sort of like-for-like progress? If you can answer, that would be great.

Maybe I'll do the same as I did with the first question. Maybe start with Richard on the GBP 8 million to GBP 9.5 million and then to Mark on the structure and shape of how we're introducing sports betting.

Yes. So the target is to get to at least GBP 9.5 million. As you've seen from the kind of initial data around machines, I think when you do extrapolate that out, that gives you a large proportion of the increase from the underlying business at GBP 8 million to the GBP 9.5 million. But we do think that there's quite a lot of room for improvement still in table gaming, electronic gaming and so on. And if it was GBP 9.5 million, I think sports is a relatively small proportion of that. But the added importance that comes from sports is that over time, we think it will broaden the appeal of casinos. So in the kind of medium term, is it going to be a material contributor to the GBP 9.5 million? I don't think so. But in the longer term, do we think it's right that we try and broaden the appeal of casinos with a broader product offering that attracts new customer segments? Yes, we do.

Yes. I think in terms of the 7, that's our view at the moment that we want to test and learn with those 7. It is an area of the business that will be test and learn. We need to understand it. We know that sports betting has got huge popularity, but it's new to casinos. We like the principle of the proposition that we can offer. And as Richard said, it will certainly broaden the appeal of casinos. The future after 7, we will have further opportunities if those 7 are successful. But what we also have the opportunity to do is where there isn't space, yes, we will put SSBTs in, and they will just be integrated within the main gaming floor. We will still have high-definition screens and screens with sports betting odds, but it will be integrated into the existing casino because of space constraints. Are there any more questions in the room?

David Brohan, Goodbody. Just three questions from me, please. Firstly, on sports, could you give any flavor of the economics in terms of drop? I know you've given it kind of on the gaming machine side. Then secondly, just on -- obviously, we've got the gaming machines and the sports betting, but the other measures of land-based reforms. Where are we at time line wise in terms of those? And then just finally, U.K. taxes continues to be a very topical topic. Any kind of latest views on that ahead of the budget next month?

Maybe I'll do the budget. Why don't I do that one? Thank you for the question. So lots of focus, obviously, on what's going to happen on the 26th of November. I think from what I've seen officials at the treasury are somewhat surprised about the level of media coverage and media speculation about what might happen in the budget, frankly. What we know and what the treasury have put out is that there's a consultation. The consultation is closed, and they will respond with the answer to that consultation in the budget on November 26. And that consultation was on the rate of tax for online betting and gaming. And for those who don't follow the detail of this, there are 3 online taxes today; remote betting, which is at 15%, full betting, which is at 15%; and remote gaming, which is at 21%. And the view from the treasury has been for a while, this was in the -- certainly the last conservative budget, Jeremy Hunt's final budget and maybe the one before that, actually, the HMRC would conduct a review to harmonize taxation. Their preference, it would appear from the consultation, is to merge those three into tax, which would make it easier to collect. I'm not sure it would make it any easy to collect, by the way, but nonetheless, with that thought for a moment. And if they were going to harmonize into one remote betting and gaming duty, I think you'd have to assume it was more likely to be harmonized at upwards of 21% than downwards of 15%. That's kind of probably where you would have to assume. And that's the process today. That's the only kind of public utterance other than Social Market Foundation, IPPR and then Gordon Brown's interventions, which is proposing a very, very sharp, very significant increase in taxation, which if you look at the economics of this, just doesn't hold water. It would be significantly detrimental to the treasury revenues if it were to be implemented at this kind of scale that's been talked about by the Social Market Foundation and others. And that's recognized at the treasury. Clearly, that is recognized. And the economics is pretty straightforward. As I mentioned in the trading update last week, in the year we finished in June, 30th of June, we made a profit after tax of GBP 44.6 million and paid -- and that's for the Rank Group, and we paid taxes in the U.K., not excluding what we pay in Spain, in the U.K. alone last year, we paid tax of GBP 188 million. So this is a business which entertains millions of people, which is the fun of it. That's why I do it. That's why I love it so much, as you can probably tell. We employ an awful lot of people. We employ 7,000 -- whatever today's number is 7,785 or something thereabouts. And we pay a lot of tax. And I don't say that negatively. That's the business. That's always been the business. That's why it's a regulated business. That's why society back in the '60s decided this should be a regulated rather than an unregulated marketplace for all the right reasons, I think. That's well understood by the treasury. The outcome on the 26th, we'll just have to wait and see. But certainly, in my meetings with treasury officials, including in just recent days, actually, I think they will understand the economics. But we'll have to wait and see what happens on the 26th. To land-based reforms, maybe I should take that, too. I think the DCMS have had a lot on their plates in getting as far as they have with the white paper and implementation of the white paper. We're pleased with what we've been delivered so far. We're also pleased with last week's consultation, which announced an intent on the part of DCMS to separate Bingo licensing from the ability of what are AGCs to operate on the high street using Bingo licenses. We think that's a helpful step forward for Bingo because it means that the reforms for Bingo can then hopefully be accelerated beyond the point at which that separation in licensing is created. The other thing that Bingo one change also applies the same way in Scotland. The casino reforms today are not applicable in Scotland. So we've got five wonderful casinos in Scotland that we take -- we'd love to have more machines, but we can't do that today. The Bingo reform when it comes through also won't apply in Scotland. So there's a growing list of things to be implemented in the Scottish Parliament that may well have to wait until after the May elections up in Glasgow, I suspect. So I don't think we're going to be seeing those changes this side of 2026, maybe even into 2027, we will see. So I think other things like cashless gaming, which we'd love to have in casinos, the fact that you can't easily use a debit card here, we will, of course, take debit cards. But you can't use a debit card at a gaming machine by way of example. It's something that everybody understands, including government, has to change at some point. So that's in the queue to come through from DCMS. They've got a lot on their plates, and I think they've moved super quickly to implement what they've implemented so far, and we're very grateful for that. To the economics of sports?

The expected drop-through on sports is probably low 50s is our expectation. But I would describe that as an educated guess at this point rather than something that I could soundly guarantee.

From my perspective on sports, I've been a bookmaker most of my life. I love that business, too. And I think we have the advantage of 24 hours. We have the advantage of environment. We have the advantage of service. We have the advantage of food and beverage in tremendous facilities like this one. We don't have the advantage of anonymity, and we don't have the advantage of localness in quite the same way as a betting shop does. So I think it's an interesting and useful addition to a casino. We're not marking it up as being a really significant revenue generator over time. I think it's more about broadening the appeal of what is a casino in the U.K. Have we got any other questions? Greg, if I may. John, sorry, John, I missed your arm when it went up earlier. We're going to get to John, I think.

John Ritchie, Shore Capital. I just wanted to ask how many casino licenses does Rank own that aren't currently being utilized? And is there any sort of medium-term plan for those?

Let me take that, too, if that's okay. So we've got 77 licenses and we've got 50 properties. We've got 77 licenses. There will be a couple of those licenses that will still be being used post the reforms, where it doesn't make any sense for us not to use them, but it will free up -- the reform frees up probably 25 licenses. Some of those are dormant today and not being used anywhere. Those that have not been used anywhere, not commercially viable, otherwise, we'd have used them before now. Will they become commercially viable post land-based reform? We'll have to wait and see. The others that we're using a second and in some cases, third licenses in venues will be freed up. That all presupposes those venues in Scotland where we're using second and third licenses, of course. But it frees up a number of licenses. So for example, in Nottingham, we've got a great casino. We've got 3 licenses, got 60 machines. We'll have 80 machines and 1 license. It will free up 2 licenses. Is there an opportunity for another casino within that permitted area? I think we've got to wait and see. Right now, John, our investment is focused on the existing estate and the existing footprint. There clearly are opportunities in the future, I think, for larger premises in some locations. We've had a free license in one of the London permitted areas. That we've been looking for a venue for some years haven't quite found the right venue. Again, does land-based reform make that easier for us? It might well do. But I think right now, our road map, we've got a lot of runway ahead of us with the existing estate, and that's very much our focus.