Rank Group PLC
07 December 2006
7 December 2006
Rank Group trading statement for 48 weeks to 26 November 2006
& disposals of non-core businesses
Summary
For the 48 weeks to 26 November 2006, The Rank Group Plc ('Rank') has generated
modest revenue growth from continuing businesses. In addition we have made
significant progress in exiting Deluxe Media Services and we have agreed the
sale of our US Holidays division.
In separate statements issued this morning we have announced both an agreement
to sell Hard Rock for $965m and the appointment of Peter Johnson as chairman of
Rank from 1 March 2007.
Gaming
Revenue (vs prior year) Wk 1-26 Wk 27-48 YTD
Mecca Bingo (1)% (2)% (1)%
Grosvenor Casinos 9% 4% 6%
In Mecca Bingo we have generated underlying revenue growth but the business as a
whole has been held back by the performance of our clubs in Scotland, which have
been subject to a smoking ban since 26 March 2006. This year our clubs in
England and Wales have grown revenue by 1% with a 2% rise in spend per head
off-setting a 1% decline in admissions.
In Scotland while trading conditions remain challenging, we are encouraged by a
sustained improvement in market share. Since the introduction of the smoking
ban, year-on-year revenue has declined by 15%, with admissions down 6% and spend
per head down 9% but our share of the Scottish market has grown from less than
31% to more than 34%. We have enjoyed some success with electronic bingo, linked
interval games and other technical innovations. However, there is more that we
can do to mitigate the full impact of the ban, including the development of new
games as permitted under the 2005 Gambling Act.
In Grosvenor Casinos, revenue growth has slowed in the second-half of the year,
due to the timing effect of the 'early freedoms' of the 2005 Gambling Act, which
were introduced in October last year. For the year-to-date, revenue has grown by
6% with admissions rising 4% and spend per head up by 2%.
While the underlying performance of Grosvenor Casinos remains strong, a number
of our casinos have been impacted by an increase in competition. Despite growth
in consumer demand, the potential for over-supply of casinos in certain local
marketplaces remains a concern.
Top Rank Espana, our Spanish bingo clubs business, has undertaken a number of
changes required to comply with the partial smoking ban in Spain. We have
continued to experience a modest impact on revenue as a result of the ban.
Blue Square has enjoyed strong trading in both its sportsbook and in its gaming
operations. Meccabingo.com, our on-line bingo product, which allies Blue
Square's interactive gaming expertise with the strength of the Mecca brand, has
performed particularly well since its launch in September.
Hard Rock
In Hard Rock's company-operated cafes, like-for-like sales are ahead 6% for the
year to date, with a 7% increase in sales of food and beverage and a 5% rise in
merchandise. Total sales from company-operated cafes have grown by 8%.
This morning we have announced an agreement to sell Hard Rock to Seminole Hard
Rock Entertainment Inc, a wholly owned subsidiary of the Seminole Tribe of
Florida for a consideration of US$965 million (approximately £490 million).
Board changes
On 15 September 2006 we announced that Alun Cathcart would be standing down as
chairman of The Rank Group, after nearly six years in the role. As announced in
a separate statement issued this morning, we have appointed Peter Johnson to be
the new chairman of Rank. Peter will join the board as deputy chairman on 1
January 2007 and he will succeed Alun as chairman on 1 March 2007.
Deluxe Media and US Holidays
We have made significant progress in exiting Deluxe Media Services ('DMS'), our
DVD replication and distribution business. We have completed the sale to Optical
Disc Service GmbH of all remaining DMS businesses in Europe for an aggregate
cash consideration of EURO 1.3m (approximately £0.9m).
We continue to seek a sale of DMS businesses in the USA but can confirm that we
will have exited all DMS operations by 30 June 2007. The total cost of exiting
DMS is expected to be within the provision that we established in December 2005.
We have agreed the sale of our US Holidays division, Resorts USA Inc to Resorts
Group Inc, a consortium led by the Resorts management team, for a cash
consideration of $32.5m (approximately £16.4m). The disposal is expected to
complete on 15 December 2006.
Share buy-back
On 8 November 2006 we completed the £200m share buy-back programme that we
commenced in March this year.
Analyst presentation and webcast
There will be an analysts meeting at Goldman Sachs International, River Court,
120 Fleet Street EC4A 2QQ, starting at 11.30am.
Later today a copy of the presentation as well as webcast and dial-in recordings
of the meeting will be available from the Group's website (www.rank.com).
Dial-in details are listed below:
UK Access Number +44 (0)20 8609 0289 or 0800 358 2189
US Access Number 1 866 676 5865
Conference Reference 158789#
Enquiries
The Rank Group Plc
Dan Waugh, director of investor relations 01628 504053
M: Communications
Nick Fox 020 7153 1540
Lisa Gordon 020 7153 1548
This information is provided by RNS
The company news service from the London Stock Exchange
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