In its trading statement for the 48 weeks to 26 November 2006, the Rank Group has announced an agreement to sell the company’s Hard Rock cafes to the Seminole Tribe of Florida for US$965 million. Rank also declared that continuing businesses had generated modest revenue growth and that it has made significant progress in exiting Deluxe Media Services and in the sale of its US Holidays division. A new chairman, Peter Johnson who is currently chairman of Inchcape plc, will take over on 1 March 2007.

Ian Burke, Chief Executive of Rank, commented, “Rank is entering a new phase in its development, adapting to the range of social, regulatory and legislative influences that are changing the UK gaming market. Peter Johnson's depth of retail experience and his proven qualities of leadership are of great importance to the Group as we seek to grasp the opportunities and to overcome the challenges presented by our changing business environment.”

Following the completion of the sale of Hard Rock to the Seminole Tribe, Rank intends to return £350 million (equivalent to approximately 65p per share) to shareholders through payment of a special dividend, and to effect a share consolidation. According to Ian Burke the transaction will transform Rank into a focused gaming business from a diversified entertainment leisure group.

“We have established clear plans to capitalise on the changes taking place in UK gaming in order to generate sustained growth in profits and improvements in our return on capital employed. In spite of a number of near-term challenges, we believe that our considerable operating experience and our strong portfolio of gaming assets will enable us to take advantage of the long-term growth in the gaming market.”

He added, “In recent months we have made progress on the key strategic objectives that we highlighted at the time of our interim results: completing the review of Hard Rock, exiting non-core businesses, restructuring our balance sheet, generating overhead and operating efficiencies and driving operational improvements from our gaming businesses. We believe that this strategy is in the best interests of our shareholders.”

Merrill Lynch International is acting as lead financial adviser and corporate broker to Rank. Goldman Sachs International is also providing financial advice to Rank in relation to the Disposal. (E-12.07.06)

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