Interim Results - Part 1

RANK GROUP PLC
5 August 1999


PART 1


THE RANK GROUP PLC

INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 1999

- Turnover up 1.7% to £916m
- Operating profit £100m (1998 - £99m*)
- Pre-tax profit before exceptional items £80m (1998 - £81m*)
- First half EPS before exceptional items unchanged at 7.0p
- Net dividend per share 4.0p (1998 - 5.75p)
(* restated for FRS12)

Mike Smith, Rank's Chief Executive, commented:

'It  has been a reasonable trading period for the Group  and  in
line  with  our  expectations.  However, I recognise  that  this
performance  is still not at the required level for  the  longer
term and therefore we are taking firm action now to improve  our
future   profits  and  cash  position.   These   steps   include
substantial  overhead reductions, restricted capital expenditure
and a lower dividend.

We  are  also reviewing our portfolio to establish  how  we  can
unlock   value   to  shareholders  by  reshaping  our   business
interests.'

Enquiries:

The Rank Group - Tel:  [phone]
 - Mike Smith, Chief Executive
 - Nigel Turnbull FCA, Finance Director
 - Kate Ellis-Jones, Investor Relations

The Maitland Consultancy - Tel:  [phone]
 - Angus Maitland

A  recording  of the presentation to the City will be  available
from 1.00 pm today until 19 August 1999.

UK dial-in number: 0181 288 4459 (access code 675682)
US dial-in number: 703 736 7336 (access code 675682)

CHIEF EXECUTIVE'S REVIEW

Trading  has  been  reasonable in the first half  of  1999;  the
profits this year match those of 1998.  However, there have been
considerable variations in the comparable business environments.
1998  started well with a buoyant economy, good film releases  -
particularly   'Titanic'   -   and  strong   leisure   spending.
Conversely, 1999 started at a lower level of activity, with poor
film  releases until May, but with consumer confidence gradually
improving.   The  second  quarter results  were  also  distorted
compared with last year by the relaunch of Butlins.

Trading  in  July and up to date holiday bookings indicate  that
the  operating  performance  of Rank  businesses  for  the  year
remains in line with our expectations.  It is still too early to
comment  in  any detail on the likely performance  of  Universal
Studios Escape since the new park, Islands of Adventure, was not
actively marketed until July.

Results  that only match those of last year need to be improved.
Over  the  past  few  years  Rank has invested  heavily  in  its
businesses  and  its  assets are in  a  good  state  of  repair;
shareholders  can  now  rightly  expect  improved  returns.   To
increase  the  speed  at which this will be achieved,  Rank  has
already  embarked on a re-organisation and an overhead reduction
programme  which  will eliminate jobs, consolidate  offices  and
achieve cost savings of at least £20m in 2000, and £30m in 2001.

As announced separately, and as part of a re-organisation across
the  Group,  the  current  functions  of  Finance  Director  and
Commercial  Director  will  be merged  and  Nigel  Turnbull  and
Douglas Yates will be leaving the Group by the end of the  year.
Ian  Dyson will be joining Rank from Hilton Group plc as Finance
Director no later than 1 October.

As  a  result of the high level of investment in the first half,
borrowings increased by £200m to £1,257m.  It is essential  that
Rank  starts  to  generate  cash to repay  debt.   A  number  of
measures  are  planned.  First, investment  expenditure,  mostly
already  committed, will peak at £500m this year and is  already
being  restricted.  Expenditure will not exceed £250m next year.
Secondly,  despite the future reduction in capital  expenditure,
in  order to ensure positive cash flow, a dividend reduction  is
required.   Rank  has  been over-distributing  compared  to  its
earnings and its peers.  A dividend cover of nearer two times is
needed   to   conserve   cash.   Rank  will   consider   further
distributions  to  shareholders as cash becomes  available  from
future disposal of assets and once borrowings have been reduced.

Improved profits, restricted capital expenditure and the reduced
dividend  will  ensure  that the Rank Group  is  cash  positive,
before  sale  of businesses, next year, for the  first  time  in
several  years.  Balancing our cash flows in this way is  now  a
prime objective of the Group.

As  a consequence, we have reviewed the capital and debt profile
of  the  Group.  Given the reduced cash requirements action  has
now  been  taken  to  prepay  £100m  of  expensive  US$  private
placement debt due over the next few years.  This is part  of  a
longer term programme to rebalance the profile of debt.

Finally,  in  addition to adopting FRS12, Rank has  announced  a
change  to its accounting policy on pre-opening costs that  will
be  adopted for 1999.  The change to the policy is to  write-off
these  costs as incurred rather than deferring them and  writing
them  off  over  up to five years. This new policy  particularly
affects  the results of our associate Universal Studios  Escape,
and  brings  Rank  into  line  with  US  industry  practice  and
increases the correlation between earnings and cash flow.

These two changes have resulted in exceptional charges; £45m for
the  change  in  accounting for pre-opening  costs  and  £8m  in
respect  of  the prepayment of part of the US private  placement
debt.  We will incur an additional charge over the next eighteen
months  of  around  £40m  for  the  cost  of  restructuring  and
associated redundancies and consolidation of offices.

There  has  been considerable comment on whether the Rank  Group
should restructure its portfolio of businesses.  Whilst we never
react  to speculation, we are very aware of the need to optimise
shareholder value.  Where action can be taken to achieve this we
will  act  accordingly.  For instance, in  Universal,  with  the
knowledge that the partners, Rank and Seagram, are contractually
entitled  to terminate their joint venture in May 2001,  we  are
exploring with Seagram ways in which we might realise value from
our investment prior to that date.

Whatever  the  speed  of  any  divestment,  I  re-emphasise  our
intention  to  extract  greater  returns  from  our  businesses,
especially  those  in which we have invested heavily  in  recent
years.

DIVISIONAL PERFORMANCE

Deluxe
                        1999      1998  % change
                          £m        £m          
Turnover                 287       262       9.5
Operating Profit          27        26       3.8

Film processing and Pinewood Studios had an excellent first half
with  substantial  increases in turnover and  operating  profit;
this  was  partially  offset by video duplication  which  had  a
disappointing result.

The  film  laboratories processed almost 1.5bn feet of film  (up
18%)  and increased turnover by 16% and operating profit by 28%,
helped by the new Sony contract.  The UK film laboratory and the
lower  cost Toronto facility were kept very active and  produced
strong financial results compared to last year.  Films processed
in  the  second quarter included the latest Star Wars film  'The
Phantom  Menace', 'The Mummy', 'Austin Powers 2' and 'Eyes  Wide
Shut'.  The strength of film titles in the second quarter is set
to continue in the second half.

Pinewood  almost doubled profits and operated at close  to  full
capacity, helped by the filming of the new James Bond film  'The
World Is Not Enough'.

Video  duplication  started  the year  well  with  'The  Rugrats
Movie',  'Something About Mary' and 'Babe, Pig in the City'  but
declined  in  the second quarter.  Overall, volume was  down  8%
compared to last year due to a lack of big titles.  Product  for
the second half includes 'The Mummy'.

In  May, the business of Electric Switch, a London based digital
versatile disc (DVD) authoring company, was acquired.

Hard Rock
                        1999      1998  % change
                          £m        £m          
Turnover                 119       116       2.6
Operating Profit          17        22    (22.7)

Turnover  was  higher  than  last year  with  revenue  from  new
openings  in  the  past  year  offsetting  the  shortfall   from
comparable cafes.  The rate of decline in comparable  cafes  was
slower  than  the  second  half of last  year  with  merchandise
improving  at  a  greater  rate than  food  and  beverage.   The
introduction  of  new merchandise lines and  menu  changes  have
improved  the  average  spend.  £4.1m of  the  operating  profit
shortfall  was due to a £1.4m licensing receivable provision  in
1999  and a £2.7m franchise fee received in 1998.  Without these
items operating profit would have been virtually unchanged.  The
remainder  of  1999  will  benefit  from  cost  reductions   now
implemented.

So  far  this  year  Hard Rock has opened  three  new  cafes  in
Amsterdam,  Indianapolis and Fort Lauderdale.   Gatlinburg  will
open later in 1999 along with the first NBA City restaurant  and
entertainment  centre at Universal Studios  Escape  in  Orlando,
Florida.

The  successful  launch  of  Hard Rock  Rockfest,  sponsored  by
Oldsmobile,  took place in Atlanta in June before a  rock'n'roll
audience   of  129,000  people.   The  Hard  Rock  Live   weekly
television series, sponsored by American Express, completed  its
second  broadcast season; the third season will start in August.
These activities enhance brand awareness.

Construction has begun on the 650 room Hard Rock Hotel (in which
Rank  has  a  25% equity interest) at Universal Studios  Escape.
The hotel will be managed by Loews Hotels.

HOLIDAYS
                        1999      1998  % change
                          £m        £m          
Turnover                 178       190     (6.3)
Operating Profit           7         7         -

Turnover  reduced  principally due  to  the  later  opening  and
reduced  capacity  at Haven's Hafan y Mor (Pwllheli)  and  Craig
Tara (Ayr), formerly Butlins sites.

Operating  profit, in this seasonally less important  half,  was
level  with last year helped by an excellent result from  Warner
and   increased  contributions  from  Oasis  and  Resorts   USA.
However,  these benefits were offset by the closures at  Butlins
and the increased winter costs at Haven after the acquisition of
Parkdean in spring 1998.

The  investment to transform Butlins was successfully  completed
and  the three Butlins Family Entertainment Resorts at Skegness,
Bognor and Minehead were fully launched at the end of May, after
a two month preview opening period.  As expected, the closure of
these  resorts  earlier  in the year impacted  on  turnover  and
operating profit.  However, customer feedback has been  positive
and  bookings  to  30 July 1999 are up 15% in tariff.   Butlins'
regional hotels were sold in June.

In Haven UK, caravan sales were up 3% in both units and value at
the half year.  As at 30 July 1999 bookings are up 3% in tariff;
this  is  on  a like for like basis excluding the new  parks  at
Craig Tara and Hafan y Mor which were refurbished and opened  at
Easter  as  Haven All-Action Parks.  Three Haven  catered  parks
were sold in June.  Haven Europe was slightly down on last year.

Warner's  operating profit was up over 40% driven  by  increased
volume  and  tariff.  Cricket St Thomas opens in  September  and
Thoresby Hall in Nottinghamshire has been acquired with planning
permission and is due to open late 2000.

Oasis  has  traded  well with higher average tariff  and  retail
spend  per customer which, coupled with better overhead control,
has led to an increase in profitability.

Resorts USA contributed £4m in operating profit and over £12m in
cash.   Although  heads  of agreement had  been  agreed  with  a
potential  purchaser, Rank was unable to complete a satisfactory
contract  for the sale of this business and it is now being  run
at a reduced level of activity with lower overheads.

LEISURE

Gaming
                        1999      1998  % change
                          £m        £m          
Turnover                 200       199       0.5
Operating Profit          30        24      25.0

Mecca  Bingo  performed well with turnover slightly  below  last
year  (due to eight fewer clubs) but operating profit  was  over
20%  higher.  Tight cost controls and higher spend per head more
than  offset  lower admissions.  The Dewsbury and Wrexham  clubs
were   relocated  to  new  premises  and  are  performing  above
expectations.  Three under-performing clubs were closed.

Grosvenor  Casinos had a good first half despite  the  increased
gaming  duty.  Turnover was up 11% and operating profit  by  26%
due  to  increased admissions, higher spend per head and  a  win
margin  above  expectations.   The  relocated  Newcastle  casino
opened  in January and Salford, an entirely new licence,  opened
in June.

Rank  Leisure  Machine Services' result was in  line  with  last
year.

Entertainment
                        1999      1998  % change
                          £m        £m          
Turnover                 132       134     (1.5)
Operating Profit          17        19    (10.5)

Odeon  Cinemas  had  a disappointing first half  with  operating
profit  almost 50% down compared to the previous year, primarily
due  to  a  lack of 'high appeal' films; last year's first  half
operating  profit  was  boosted by  the  success  of  'Titanic'.
Attendance improved towards the end of the period with  'Notting
Hill'  opening  strongly.  Whilst the industry as  a  whole  has
suffered  from  a decline in admissions, Odeon has out-performed
its competitors and increased market share.  The outlook for the
remainder of the year looks considerably better with 'Star  Wars
Episode 1 - The Phantom Menace' which opened on 15 July and  the
James Bond film 'The World Is Not Enough' later in the year.

In Nightscene operating profit improved substantially despite  a
fall  in turnover after 15 under-performing units were sold  and
one  closed.   Jumpin' Jaks performed well,  with  a  new  venue
opening  in  Swansea during the period.  The  new  multi-leisure
development at Coventry will open in the autumn.

Tom  Cobleigh improved turnover by some 25% and operating profit
by 37% primarily due to last year's new openings.  Like for like
sales  were down but the trend has steadily improved during  the
year  and  comparable  units are currently  trading  above  last
year's levels.

UNIVERSAL STUDIOS ESCAPE

Universal  Studios  Escape  had a  good  first  half  with  paid
admissions  up  28% (up 9% excluding Islands of  Adventure)  and
average  admission price up 5%.  The associate contributed  £17m
of operating profit (1998: £13m).  Under the previous accounting
policy  (where pre-opening costs were written off over 5  years)
the operating profit would have been £16m.

Rank's  share  of  Universal Studios  Escape's  interest  charge
amounted  to  £6m  (1998:  £3m) with the  increase  due  to  the
cessation  of  capitalisation of interest (and  commencement  of
amortisation) on debt funding of Islands of Adventure  following
the new park opening at the end of May.

DIVIDEND

An  interim  dividend of 4.0p (1998: 5.75p) will be  paid  on  8
October  1999  to  those  shareholders on  the  register  on  17
September  1999.   The  reduction of 30% is  consistent  with  a
policy of improving dividend cover to nearer two times.

EXCEPTIONAL ITEMS

Exceptional operating items consisted of a £45m charge  for  the
Group's  share  of  pre-opening expenses incurred  by  Universal
Studios Escape in the period.  As already noted this reflects  a
change of accounting in that the full cost is being written  off
now  instead  of  being amortised over 5 years  (see  note  10).
There  was  also  a  charge of £8m arising on the  repayment  of
private placement debt included in interest.

The  net  non-operating profit of £3m (1998:  £10m)  principally
arose  from  the sale of Butlins hotels and three Haven  catered
parks.

INTEREST
                                   1999      1998
                                     £m        £m
                                                 
Net interest                         50        49
Capitalised                        (10)       (6)
Discount on Xerox proceeds          (8)      (15)
                                  -----     -----
Managed businesses (before           32        28
exceptionals)
                                  -----     -----
Associates                            8         4

Interest  was unchanged as a reduction in rates offset the  cost
of  higher average debt.  In 1999, the managed businesses charge
benefited  from  the capitalisation of £10m of interest  against
£6m  last  year.   The benefit was offset by the reduced  credit
arising from amortising the discount on Rank Xerox proceeds.

On  29  June, irrevocable notices were issued for the prepayment
of  £100m of US$ private placement debt.  An exceptional  charge
of  £8m was incurred being the premium for prepayment, the  debt
prepaid having a weighted average cost of 10.0%.

TAX

In   the  UK  previous  disclaimer  of  capital  allowances  has
benefited  the tax charge in the current period, with allowances
in  the  year  forecast to substantially exceed the depreciation
charge.  Tax losses in the US also continue to ensure  that  the
charge  on  the Group's overseas profits is below  the  expected
statutory  rate.   The overall result was  a  tax  rate  on  the
Group's managed businesses before exceptional items of 22%.

INVESTMENT EXPENDITURE

Overall,  investment expenditure has decreased by £26m to  £317m
from  £343m  last year.  This includes a further £62m investment
in  Universal  Studios  Escape.   Following  the  completion  of
Universal  Studios  Escape's Islands  of  Adventure,  the  three
Butlins Family Entertainment Resorts and the conversion  of  Ayr
and  Pwllheli  Butlins  sites  to  Haven,  the  annual  rate  of
expenditure will decrease to no more than £250m in 2000.

CASH FLOW

Cash  flow  from operations reduced to £91m (1998: £153m),  with
the  decrease being principally due to payments made  by  Deluxe
for  contracts.  This working capital outflow will reverse  over
the life of the contracts.  Investment expenditure decreased, as
discussed above.  A final instalment of £220m was received  from
Xerox  following  the 1997 disposal of the Group's  interest  in
Rank Xerox.

Ordinary  dividends paid in the half totalled  £131m  (including
£32m  deferred payment of 1998 interim dividends)  against  only
£50m  last  year, which was reduced by the 1997  final  dividend
scrip alternative.

BALANCE SHEET

Net  debt  at 30 June was £1,257m compared with £919m last  year
and  £1,057m  at  the  year  end.   Fixed  assets  were  broadly
unchanged with depreciation and the 1998 impairment being offset
by   additions.   Investments  have  increased  to  reflect  our
increased investment in Universal Studios Escape.


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