Rank predicts slight fall in profits for 2005

Rank predicts slight fall in profits for 2005

	Published : Wed, 07 Dec 2005 12:05 By : James Rowe Print this Story

LONDON: Leisure company Rank Group Plc. said it expects a slight fall in its profits for 2005. In an update ahead of its annual results in February, the company, which owns the Grosvenor casino, Mecca Bingo hall and Hard Rock Cafe themed-restaurant chains, said there will be a decline in the underlying profit before tax. Analysts had forecast a 4 per cent decline in full-year earnings, which will be around 159 million pounds.

The company said energy costs and higher outgo on account of labour had put pressure on its margins. While its Mecca Bingo business remained flat -- 6 per cent rise in spend per customer was offset by a drop in admissions -- revenue at the Grosvenor Casinos had gone up 3 per cent through the year.

The online betting and gaming division, Blue Square, had a steady show after a weak first half. Similarly, like-for-like sales at its Hard Rock Cafe chain rose 4 per cent.

The company admitted there is revenue growth since October, but it is not sure of the impact of the changing gaming laws in the country. The changes in the gaming tax regime announced Tuesday by the treasury may impact its slot machines to the extent of 10 per cent, it said. The treasury proposes to bring gaming machines under VAT.

Rank said it has found suitable bidders for its Deluxe Film and Deluxe Media Services arms. It is speculated that Ron Perelman, the billionaire American owner of the Revlon cosmetics empire, could be the preferred bidder for Deluxe Film, while the identity of the bidder for the Delux Media is still a mystery though the name of Canada's Cinram, is often touted as an interested party.

Delux Films may fetch more than 400 million pounds, while the smaller media business could earn around 23 million pounds.

Rank had over the last couple of years exited several businesses, including Butlin holiday camps, Odeon cinemas and Pinewood film studios.

The company's shares had closed Monday at 308.75 pence, valuing the company at around 1.9 billion pounds.