The names were part of the British psyche – Mecca bingo halls, Grosvenor casinos, Hard Rock, J. Arthur Rank and Rank films, Pinewood Studios, Butlins holiday camps and Odeon cinemas – but the times they are a-changing. The Rank Group, once the biggest leisure conglomerate in Britain, last week announced it had hired Merrill Lynch to explore the possibilities for selling its 120 Hard Rock Cafes. This is a further move by the company to concentrate on its gaming business, following the recent sale of its UK DVD replication business and its intention to finalise the disposal of Deluxe Media Services.

The Rank Group Gaming division represents over 50% of Group operating profit. However, a 2.1% growth in revenue last year did not translate into a growth in profit, and all three gaming divisions – Mecca Bingo, Grosvenor Casinos and Blue Square Internet and telephone betting businesses – contributed to the 9.6% fall in operating profit. In the eleven years since Rank was listed on the London Stock Exchange it has failed to inspire confidence in its share value and analysts are now predicting the final break-up and disappearance of the once great company.

Of course reports of death are often an exaggeration, as in the case of Mark Twain, but Rank is seen as a prime target for private equity firms with huge resources. This is despite Rank apparently seeking to increase its gambling business through new licences and the expansion of Blue Square by acquisitions. Abroad Rank has 2 casinos in Belgium and 11 bingo clubs in Spain, and is rumoured to be part of a Morgan Stanley casino resort project in Atlantic City. Also in the United States there are the two Hard Rock casino hotels in Florida and the Mississippi Biloxi venture that was destroyed by Hurricane Katrina on the eve of its debut.

With an increase in Internet betting, particularly by women clients, bingo operations are facing difficult times. This is compounded by the effects already being felt from the smoking ban in Scotland. New licences are in the pipeline for additional Grosvenor Casinos and Blue Square betting may be showing improvement, but it may all be too little too late for Rank Plc. The forecast is that the dismal performance of the Group in recent years will eventually lead to its demise, and the betting is for sooner rather than later – maybe by early 2007. (E-07.10.06)

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