In today’s announcement of preliminary results for the year ended 31 December 2005, Rank Group has posted a net loss for the year of £208.5 million (US$365.9 million). Gaming operating profit was down 9.6% to £64.1 million (US$112.4 million) although revenue was up. Hard Rock revenue and profits grew from its hotels, gaming and cafes, but overall gaming revenue was insufficient to cover increased operating costs and lower win margins at Blue Square, Rank’s interactive betting service.

Rank Group chief executive, Mike Smith, commented, “In 2005 we have sharpened the Group’s focus through the sale of Deluxe Film and continued to lay the foundations for growth in Gaming and in Hard Rock.” He continued, “The sale of Deluxe Film represents a watershed for Rank. As a consequence of the transaction we have reviewed our capital structure and our dividend policy and we have taken steps to further improve the funding of the Group pension plan. These actions have made possible a return of £200m to shareholders via a share buy-back.

“We have not yet been able to sell Deluxe Media but remain committed to this course of action. We are pursuing an exit and this may take the form of either a sale of the business in its entirety or, more probably, the separate disposals of individual businesses or assets. Our capital restructuring leaves capacity for the development of our Gaming businesses and of Hard Rock, where we have demonstrable opportunities for growth.”

Mike Smith is due to leave Rank Group at the end of March and will be replaced by Ian Burke who previously headed a UK health club chain. Rank stock has already declined 22% this year and today’s announcement caused a 4.7% drop in early trading. The company has 117 bingo clubs and operates 41 casinos under the Grosvenor and Hard Rock brands.

Under the terms of the Gambling Act 2005, Rank expects to profit from doubling the number of Category B gaming machines to 20 per casino with increased stakes and prizes, the removal of the 24-hour rule at its bingos and casinos and the relaxation of the advertising regulations. (E-03.03.06)

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