4th Jul 2006 07:02
Rank Group PLC04 July 2006 The Rank Group Plc Group trading update for 26 weeks to 25 June 2006 and Strategic Review of Hard Rock Summary Underlying revenue growth for The Rank Group Plc ("Rank") remains steady.However profits in our Gaming division remain under pressure from rising costsand the smoking ban in Scotland is having a negative impact on revenues in ourbingo business. Hard Rock continues to trade strongly and is entering a newphase of its development. Accordingly, we have decided to conduct a review ofHard Rock's strategic options. Gaming We have grown revenue in Grosvenor Casinos by 8% with admissions up 8% andspend-per-head flat. In recent weeks, admissions have weakened, largely as aresult of the warm weather and the start of the World Cup, but spend-per-head has improved. Revenue in Mecca Bingo is down by 1% against the same period last year with a 1%rise in spend-per-head partially off-setting a 2% decline in admissions. Thisperformance reflects the impact on our Scottish clubs of the ban on smoking inpublic places. During the 13 weeks since the introduction of the ban we haveexperienced a 14% decline in revenue from our 14 clubs in Scotland, withadmissions down 6% and spend-per-head down by 9%. Margins in our Gaming division remain under pressure from rising business costs,but we are taking steps to address this, both at an operating level and withindivisional overhead. While we are confident that the changes we are making willyield future benefits, there are a number of associated one-off costs in thecurrent year. Blue Square is showing strong year-on-year improvements in revenue and operatingprofit. Hard Rock We have grown like-for-like revenue by 8% in Hard Rock's company-operated cafes,with sales of food and beverage up 10% and merchandise ahead by 5%. Total salesfor company-operated cafes are ahead by 6%. In addition we are generating revenue improvements from franchise royalties andfrom the two Hard Rock hotel-casinos operated by the Seminole Tribe of Florida,in Tampa and Fort Lauderdale. Hard Rock has performed strongly as part of The Rank Group and is now entering anew phase of its development as it seeks to expand its business in therestaurant, casino and hotel markets. Accordingly, the Board of Rank has decided to review the potential strategicoptions for Hard Rock, to assess whether or not Hard Rock should remain part ofThe Rank Group. Merrill Lynch International has been retained to assist Rank inthis review. The Board's intention is to complete the review during the next fewmonths and a further announcement will be made as appropriate. Share buy-back At the time of Rank's preliminary results announcement in March 2006, weannounced our intention to return £200m to shareholders through a share buy-backprogramme. As at market close on 30 June 2006, we had purchased and cancelled atotal of 45.9m shares in The Rank Group Plc at a cost of £102m. -ends- Enquiries: The Rank GroupDan Waugh, Director of Investor Relations 020 7535 8031 MaitlandSuzanne Bartch 020 7379 5151 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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