Rank Group PLC
04 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 costs
and the smoking ban in Scotland is having a negative impact on revenues in our
bingo business. Hard Rock continues to trade strongly and is entering a new
phase of its development. Accordingly, we have decided to conduct a review of
Hard Rock's strategic options.
Gaming
We have grown revenue in Grosvenor Casinos by 8% with admissions up 8% and
spend-per-head flat. In recent weeks, admissions have weakened, largely as a
result 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. This
performance reflects the impact on our Scottish clubs of the ban on smoking in
public places. During the 13 weeks since the introduction of the ban we have
experienced a 14% decline in revenue from our 14 clubs in Scotland, with
admissions 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 within
divisional overhead. While we are confident that the changes we are making will
yield future benefits, there are a number of associated one-off costs in the
current year.
Blue Square is showing strong year-on-year improvements in revenue and operating
profit.
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 sales
for company-operated cafes are ahead by 6%.
In addition we are generating revenue improvements from franchise royalties and
from 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 a
new phase of its development as it seeks to expand its business in the
restaurant, casino and hotel markets.
Accordingly, the Board of Rank has decided to review the potential strategic
options for Hard Rock, to assess whether or not Hard Rock should remain part of
The Rank Group. Merrill Lynch International has been retained to assist Rank in
this review. The Board's intention is to complete the review during the next few
months and a further announcement will be made as appropriate.
Share buy-back
At the time of Rank's preliminary results announcement in March 2006, we
announced our intention to return £200m to shareholders through a share buy-back
programme. As at market close on 30 June 2006, we had purchased and cancelled a
total of 45.9m shares in The Rank Group Plc at a cost of £102m.
-ends-
Enquiries:
The Rank Group
Dan Waugh, Director of Investor Relations 020 7535 8031
Maitland
Suzanne Bartch 020 7379 5151
This information is provided by RNS
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