27th Apr 2005 10:00
Rank Group PLC27 April 2005 The Rank Group Plc ("Rank" or the "Group") AGM Trading Statement Update on Deluxe Separation SummaryOverall, the Group's performance for the year-to-date is in-line withexpectations. Good results from Hard Rock and Deluxe have off-set a mutedperformance in Gaming. GamingMecca Bingo's results are similar to last year. In the UK, admissions were down4.5% and spend per head was up 5.4% in the period, resulting in overall turnoverin-line with last year. In Spain, the bingo business continues to deliver steadygrowth, benefiting from an extra club which was added at the end of 2004. Within Grosvenor Casinos, overall turnover is up 5%. The two London-uppercasinos have seen a softer than expected start to the year with handle down 7%and a win percentage of just 13.5%. Elsewhere in London the Hard Rock casino inLeicester Square continues to perform strongly and the three mid-market Londoncasinos have traded ahead of last year. Overall, turnover in the provinces wasup 8%, with admissions up 23% and handle up 9%. This includes the contributionsfrom the two new casinos at Bolton and Stoke-on-Trent which are performing welland are already profitable. Blue Square has enjoyed strong revenue and customer growth in the period. Whilethe Blue Square Poker room has yet to make a significant contribution, the BlueSquare casino is proving particularly popular. However, a weak margin in sportsbetting has meant that overall, profit is behind last year. Gambling ActThe new Gambling Act became law on 7 April 2005 and will provide significantopportunities for the Group's gaming businesses. The major changes include:• doubling of the number of Category B gaming machines from 10 to 20 per casino and an increase in stakes and prizes on gaming machines to £2 and £4,000 respectively• advertising for casinos• removal of the 24-hour rule in casinos and bingo clubs• introduction of jackpot prizes in bingo• removal of the limit on the number of multiple bingo games offered• removal of statutory limit on stakes and prize for bingo games Whilst Rank is positive about the longer term benefit of the new Act on theGroup's performance, there remains uncertainty regarding the exact timing andimpact of each of these measures. As a consequence, the Group believes it isunlikely that there will be any material benefit in the current year. Hard RockHard Rock has performed well in the period. Within the owned cafes,like-for-like sales were up 0.5%, with food and beverage up 2.7% and merchandisedown 3.9%. The recently opened cafes have continued to perform strongly so thattotal owned cafe sales were up 8% compared with the same period in 2004. Hotelsand gaming activities have enjoyed a strong start to the year with the twoSeminole hotels and casinos performing ahead of expectations. The new Hard RockHotel and Casino in Biloxi, Mississippi and the Hard Rock Hotel in Madrid areboth on track to open during the second half of the year. DeluxeAfter the unusually low levels of footage in the fourth quarter of 2004, DeluxeFilm has seen a return to more normal film volumes in North America, albeit withlower operating margins. This, together with a strong performance by thecreative services businesses, has meant that Film has made good progress in theyear-to-date. Titles produced during the period included Hitch, Robots, andSahara. The film schedule for the rest of the year is encouraging with a numberof major titles expected, including Star Wars - Episode III, Bewitched, PinkPanther and War of the Worlds. In Deluxe Media, DVD manufacturing and distribution volumes are ahead of lastyear but VHS volumes have continued to decline. Overall, Media has performedbetter than expected, but will still incur the usual seasonal loss in the firsthalf. Deluxe SeparationThe sale of Deluxe Media is progressing and we are engaged in discussions with anumber of interested parties. The Board remains convinced of the strategic merit in separating Deluxe Filmfrom the rest of the Group and is continuing to work towards a solution which isin the best interests of all stakeholders. A number of alternative routes toseparation remain under consideration. However, as stated before, the issues arecomplex and reaching an acceptable solution is likely to take some time. In themeantime, Rank remains committed to supporting Deluxe Film's leading position infilm processing and distribution and developing the expanding creative servicesbusiness. OutlookOverall, the Group has made a satisfactory start to the year. The Board remainsconfident that the Group's medium and long term prospects are strong. Enquiries:The Rank Group Plc Tel: 020 7535 8031Peter Reynolds, Director of Investor Relations Press Enquiries:The Maitland Consultancy Tel: 020 7379 5151Angus MaitlandSuzanne Bartch This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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