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  1. #1
    Senior Member Country: United States
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    Rank Group is selling off half of their Deluxe (movie / media) unit due to falling performance and due to rising interest in gaming investments.



    Poor old Mr. Rank, he would turn...



    The article doesn't seem like much selling off the DVD / video production line, but read the very bottom. This is a good picture of what happens when a company moves away from its founders vision and casts itself for a devolving profit.



    Gibbie





    Rank to sell half of Deluxe unit as profit falls



    LONDON (AFX) - UK leisure company Rank Group PLC reported a 10 pct drop in 2004 underlying profit and said it will sell the media services arm of its troubled Deluxe (NYSE: DLX - news) unit where earnings slumped by nearly a quarter.

    But the owner of the Hard Rock Cafe, Mecca Bingo and Grosvenor casino chains said it will hold on to the other half of Deluxe, which replicates and distributes motion pictures.

    That came as a disappointment to investors who had been hoping for a sale of the whole of Deluxe, which analysts expect to fetch around 650 mln stg.

    Widely seen not to complement its other businesses, Rank had flagged a possible sale of the whole of Deluxe in September.

    Rank's shares fell 15 pence, or 5.3 pct, to 269.75 by 10.45 am, valuing Sexy Beast at about 1.7 bln stg. The stock has lost around 16 pct of its value in the past 12 months, underperforming the benchmark FTSE 100 index (news) by 27 pct.

    'Whilst everyone expected the media division to be sold, no commitment on the film division is disappointing,' Evolution analyst Tejinder Randhawa told AFX News.

    He said while the film division will almost certainly be sold eventually, the complex nature of the unit's contracts with film studios makes the sale process that much more difficult.

    Some analysts say a sale of Deluxe may entice a private equity group into launching a bid for the remainder of the company.

    Rank posted profit before tax, exceptional items and goodwill of 168.1 mln stg, down from a restated 187.1 mln a year earlier, on sales up 1.4 pct to 1.95 bln stg.

    On that basis it had been expected to deliver 168 mln stg profit according to a median of 14 analysts' estimates supplied by the company. Forecasts had ranged from 166-177 mln stg.

    'It wasn't our best year,' chief executive Mike Smith told AFX News.

    He refused to say how much the media services unit was expected to fetch though argued Rank had taken prudent approach to provisioning in anticipation of a sale.

    'I think it's right and proper to take a view (on the likely value Sexy Beast will fetch) so we're not misleading anyone,' Smith said in explanation of the company's decision to write down the unit's value prior to a sale.

    But he declined to say how much the unit, which last year lost a major European DVD manufacturing and distribution contract, is valued on Rank's books.

    Rank, which says it is engaged in discussions with a number of interested parties, took 181.4 mln stg provisions in anticipation of a loss on disposal of Sexy Beast, 76.7 mln stg of which was reported at the interim results stage.

    Smith expects Deluxe media to be sold to a trade buyer given that they would have greater scope for extracting cost and revenue synergies than a private equity group.

    One-off charges helped push the company into a 118.7 mln stg net loss compared with a 95.1 mln profit in 2003.

    Operating profit at the gaming division comprising the Mecca Bingo, Grosvenor Casinos and Blue Square on-line betting businesses rose 4.6 pct to 114.9 mln stg, after Rank reported an improved second-half performance.

    Smith slammed the British government for last year bowing to concerns about a potential rise in betting addiction by unexpectedly backtracking on plans to liberalise the country's antiquated gaming laws.

    'You talk about U-turns, these guys do circles by the day,' he said.

    He called on Culture Secretary Tessa Jowell to ensure existing casino operators such as Rank had a level playing field on which to operate, when the 24 new casinos, envisaged in the government legislation, open their doors.

    Rank's 100-strong chain of Hard Rock Cafes grew profit 20 pct to 27.8 mln stg, while Deluxe profit fell to 71.3 mln.

    The company said trading patterns across the group had been in line with expectations so far this year.

    The final dividend was hiked 5.4 pct to 9.8 pence per share with the full-year payout rising 5 pct to 14.6 pence.



    http://uk.biz.yahoo.com/050225/323/fd8wn.html



    In an earlier article, it was mentioned that "Rank said it was still hoping to separate Deluxe Film, but had not yet reached a decision, causing its shares to fall 4 percent to 273-1/2 pence by 10:20 a.m."



    http://www.reuters.co.uk/newsArticle.jhtml...uk/businessNews

  2. #2
    Senior Member Country: UK DB7's Avatar
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    Rank sounds the final gong for its film business



    After more than 70 years, the only British movie company able to compete with Hollywood has cut its last tie with the industry



    Geoffrey MacNab

    Saturday February 26, 2005

    The Guardian



    It was in 1933 that J Arthur Rank, a middle-aged Yorkshire flour magnate, decided to equip various Methodist halls and churches with their own movie projectors. Little did he know it then, but Rank had set in train a business that would provide British cinema history with many of its most sublime and absurd moments.

    Seven decades on, Rank's long flirtation with celluloid has come to an end. The company he founded severed its last ties with the film industry yesterday when it sold its Deluxe unit, dedicated to DVD distribution and technical support. In 1997, the group hived off its distribution arm and film library to Michael Green's Carlton. Three years later, it sold Pinewood Studios to a consortium led by Michael Grade. Odeon was next on the auction slab, also sold off in 2000.



    Even though Rank's exit from the film business had long been predicted, many fans of British cinema will react to the news with dismay. Among the glories of its output is the astonishing work carried out by Michael Powell and Emeric Pressburger, and David Lean in the late 40s. Rank, eager to gatecrash the US market with prestige pictures, gave these film-makers carte blanche. "We can make any subject we wish, with as much money as we think that subject should have spent on it," Lean once boasted.



    Left to their own devices, the film-makers rewarded their patron with such classics as The Red Shoes, A Matter of Life and Death, Great Expectations and Oliver Twist. In the same era, Rank also financed the bodice-ripping Gainsborough melodramas (The Wicked Lady, The Man in Grey) and the Ealing comedies.



    By 1946, the Rank Organisation was as big as any Hollywood studio. It had a staff of 31,000. (By comparison, the National Health Service employed 34,000 people on its inception.) Rank invested in every aspect of the film business, from labs to distribution, from meteorologists (to predict when it would be sunny enough to shoot) to its eccentric Highbury-based "charm school", where various good-looking women and statuesque men were taught diction and deportment in the hope they would turn into stars. "I declined absolutely to walk around with a book on my head," Christopher Lee recalled of his stint under the school's martinet head, Molly Terraine.



    Rank also had a knack for publicity, dispatching its starlets across glamour-starved, austerity-era Britain to open village fetes and garden shows. In one celebrated stunt in the 50s, publicity supremo Theo Cowan arranged for Diana Dors, a charm school graduate, to turn up at the Venice Festival in a mink bikini.



    In the 50s, as costs were slashed by the manager, John Davis, the company's biggest box-office winners were a series of films featuring Norman Wisdom as the Gump. This was the era of safe, innocuous comedies like Doctor in the House and Genevieve.



    While Hollywood had Marlon Brando, James Dean and Montgomery Clift, Rank countered with "chaps", actors such as Kenneth More, John Gregson, Jack Hawkins and (more ambivalently) Dirk Bogarde, seldom seen without tweed jackets or pipes. Rank also distributed the Carry On movies, and produced them from 1967.



    Rank's growing disaffection with the film business was already apparent in 1956, when Davis struck a deal with a New York company which marketed photocopying machines, giving birth to Rank Xerox Ltd. Within a decade, film accounted for only a tiny proportion of the group's overall profits. Over the years, an outfit that had its origins in church halls began to invest in casinos, bingo, hotels, holiday camps and theme parks.



    But even as it diversified, Rank remained the one fully vertically integrated British film outfit. What really galled UK producers in the 70s and 80s was how unwilling the company was to to support British film-makers. "Various managements came along which didn't in any sense match the vision of that early era," says the producer and director Don Boyd.



    In the early 80s, Boyd and fellow film-maker Bryan Forbes raised city backing of £600m to launch a takeover bid. Their idea was to use the Rank machine for the benefit of the British industry, but the Rank board turned them down. Instead, Rank began to slowly break up that machine, even though this was the period when the industry was beginning to revive.



    Now the one British film company which had the muscle of its Hollywood competitors has gone. As Boyd puts it, "we don't have a visionary, commercial studio system here. Instead, we see all the money going off to the States and no proper money going into the infrastructure of our industry here."

  3. #3
    Senior Member Country: England
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    Oh dear! Is this the final nail in the coffin of the British Film Industry? I hear tell that Jonathan Ross is having a "discussion", with a panel of Birtish Film "people", on his film 2005 programme next week. Should be interesting.........I have a feeling it will just be more talk and no action. :unhappy: Regards, Decks.

  4. #4
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    Thanks for the follow up story, DB7. Your article has a better narrative and shows what is being lost. Truly a loss for Britfilm industry.



    Is it the final nail?



    Where is the next Rank? Britain and the world needs YOU!





    [attachmentid=8]

  5. #5
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    It's a shame, but in some ways it's surprising that the Rank Films connection even lasted as long as it did.



    IIRC Sir John Davis (head honcho and hatchet man at Rank Org. for many a year) said that the only way Rank Film survived the 60s and 70s was by the prudent acquisition by the Rank Group of Xerox in the very early days of commercial photocopiers.



    For a very long time the profits at Xerox propped up an ailing Films Division.



    You see, one day I had this urge to go read a book about film production and economics....it passed, I finished the book and started watching the fillums again instead. The book ws fascinating, but the fillums were INTERESTING ! :grin:



    BTW - just out of curiosity - anybody here rich enough to own any PINEWOOD shares ?





    SMUDGE



    [img]style_emoticons/<#EMO_DIR#>/devil.gif[/img]

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