Analyst Sees Continued Momentum for Rank Group Despite Payment Fraud News

Rank Group’s (LON: RNK) shares were in focus on Monday after the company disclosed it had fallen victim to a €7.1 million payment fraud at its Spanish operations. 

The news sent the company’s shares down over 4%. However, so far on Tuesday, it is up around 1.8%.

Despite the announcement, Shore Capital analyst Greg Johnson said in a note that he continues to expect strong trading momentum, arguing the incident does not change the group’s profit outlook. Shore Capital classes Rank Group as a “House Stock” (a company in which it acts in an advisory capacity).

Rank said the fraud, equivalent to about £6.2 million, has been reported to authorities, with management supporting an external investigation while conducting its own. 

Johnson noted that additional controls have already been implemented and expects the loss to be treated as a separately disclosed item, meaning it will not affect adjusted profit before tax.

Shore Capital cut its forecast for Rank’s fiscal 2026 net cash position by £6 million to about £44 million to reflect the loss, which the broker does not currently expect to be recovered. Johnson said the adjustment equates to roughly 1.5p per share.

The group is due to report interim results on 29 January. “We expect the results to show continued strong momentum and the first benefits from land-based casino reform,” stated the analyst.  

He described the reform as “transformational” for Rank’s medium-term outlook, reiterating earlier expectations that operating profit could build to about £100 million, or earnings per share of 16p.

According to Shore Capital, that target remains achievable even after the recent increase in remote gaming duty, which it believes has yet to be fully reflected in Rank’s valuation.