Rank Group PLC
14 June 2000
THE RANK GROUP PLC ANNOUNCES CHANGES TO DELUXE VIDEO SERVICES
INC. IN USA
The Rank Group announces that Deluxe Video Services Inc. has
reached an agreement whereby its video duplication and
distribution contract with Twentieth Century Fox Home
Entertainment ('Fox') will end. Full service will continue
until August 2000 after which time the services provided by
Deluxe will gradually reduce over the remainder of the year.
Deluxe's other contracts with Fox - US film contract and
European video contract - are unaffected.
As previously announced, Rank's management has embarked upon a
substantial restructuring programme for its US video duplication
and distribution business. This was to address both the
operating performance of Deluxe Video Services Inc., which has
not been at the required levels since 1998, and also the
increasing expectation that demand for videos will decline over
time. This programme will now be accelerated, with a particular
emphasis on focussing production and distribution on the more
cost-effective facilities, particularly Arkansas.
An exceptional charge in the region of £35m will be included in
the Group's 2000 results to cover the costs of the restructuring
programme and write-off of certain assets relating to Fox.
The effect of the reduction in volume on profits for the
division is expected to be moderated by the benefits of the
restructuring programme. The effect on operating profit in the
current year is not expected to be material to the Group's
results.
Enquiries:
The Rank Group Plc
Kate Ellis-Jones, Investor Relations - 020 7535 8031
Press Enquiries:
Angus Maitland, The Maitland Consultancy - 020 7379 5151
Laura Frost, The Maitland Consultancy - 020 7379 5151
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