Leisure firm Rank Group is selling its Delux Film and Media unit |
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Sat, 03 Sep 2005 21:05
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LONDON: Leisure firm Rank Group is mulling sale of its Delux Film and Media services unit, reversing an earlier demerger plan. The company had been toying with the idea of flotation of the unit, but shelved it last year. The announcement to find a buyer for the unit seems to have been taken in the light of the company's perception that the business might look too small and vulnerable on its own.
Deluxe Film and Media makes and distributes videos and DVDs. The unit is estimated to worth around 50 million pounds.
Rank's chief executive Mike Smith said even though a decision has been taken on the sale, he is not sure when the process will be completed. There are issues like the buyers should be acceptable to its customers.
He said there is no point in demerging a business that cannot stand on its own.
The unit accounts for as much as 30 per cent of the group's profits and is seen as very cash-generative for a number of years to come.
The company reported a 2 per cent fall in adjusted pre-tax profits for the six-month period ending June 30 to 71 million pounds on sales, which rose by 15 per cent to 870.5 million pounds. The company had a restated 72.4 million pounds profit in the corresponding previous year period.
While there was growth in Hard Rock and Deluxe units, this was offset by declines in the company's casino and bingo operations and lower margins at online bookmaker Blue Square. The company expects the possible deregulation of the gaming market in the U.K., will boost its sales. It has already invested heavily in gaming business in anticipation of the deregulation.
Earlier Rank had sold its Odeon cinema chain, the Butlins holiday business and Pinewood film studios.
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