Rank Group Plc · LSE:RNK
Rank — The Rank Group — H1 2001 Earnings Presentation
31 slides from Rank's earnings presentation, June 2001
Slide 1: The Rank Group Plc Interim Results 2001
The Rank G roup Plc Interim Results 2001
Slide 2: Alun Cathcart, Chairman
A lun Cathcart Chaim an Rank Group
Slide 3: Mike Smith, Chief Executive
M ike Sm ath Chief Executive Rank Group
Slide 4: Management team
M anagem ent team D avid Boden M D G am ing Pete Beaudrault Presidentand CEO Hard Rock PhilClem ent Deluxe CyrilD rabinsky Presidentand CEO Deluxe Film W orldw ide Peter Pacitti Presidentand CEO Deluxe Video W orldw ide
Slide 5: Key points
Key points • O perating profitstillm oving ahead – G am ing strong – Hard Rock im proved – Deluxe resilient • Nearfourfold increase in EPS • Cash flow robust • Interim dividend increase of5%
Slide 6: Ian Dyson, Finance Director
Ian Dyson Finance Director Rank Group
Slide 7: Summary of results
Sum m ary of results £m 2001 2000 Continuing businesses Turnover 645.4 682.7 O perating profit 96.0 86.8 D iscontinued businesses - 9.5 A ssociates 1.7 (13.6) Interest (14.9) (40.6) Profit before tax 82.8 42.1 Earnings per share 9.2p 2.5p
Slide 8: Turnover
Turnover £m D eluxe H ard Rock G am ing U S H olidays G roup 2000 reported 303 128 227 25 683 A djustm ents Fox (36) (36) Clerm ont trading (18) (18) 27th w eek (6) (6) 2000 adjusted 267 122 209 25 623 2001 reported 282 131 209 23 645 Currency im pact (17) (10) 0 (2) (29) 2001 adjusted 265 121 209 2
Slide 9: Operating profit
O perating profit £m 2001 2000 Change G am ing 45.6 39.5 15% H ard Rock 24.0 21.9 10% D eluxe 22.7 23.5 (3% ) U S H olidays 6.7 8.2 (18% ) Centraland other (3.0) (6.3) 52% O perating profit* 96.0 86.8 11% * Continuing businesses
Slide 10: Gaming
G am ing £m 2001 2000 Turnover M ecca Bingo 118.8 117.9 G rosvenorCasinos 68.2 84.5 RLM S 22.4 24.5 209.4 226.9 O perating profit M ecca Bingo 35.0 28.2 G rosvenorCasinos 9.7 10.8 RLM S 0.9 0.5 45.6 39.5
Slide 11: Grosvenor Casinos
G rosvenorCasinos £m 2001 2000 Turnover London 30.8 47.5 UK Provinces 32.5 31.7 Belgium 4.9 5.3 68.2 84.5 O perating profit London 3.5 5.4 UK Provinces 6.0 5.1 Belgium 0.2 0.3 9.7 10.8
Slide 12: Hard Rock
H ard Rock £m 2001 2000 Turnover O w ned cafes 122.0 123.3 Franchise and otherincom e 8.6 4.3 130.6 127.6 O perating profit O w ned cafes 22.5 26.7 Franchise and otherincom e - Cafes 7.4 4.7 - Hotels 1.2 0.1 Advertising and prom otion - (3.0) O verheads (5.3) (6.6) Restructuring (1.8) - 24.0 21.9
Slide 13: Hard Rock
H ard Rock £m 2001 2000 Reported profit 24.0 21.9 Restructuring costs 1.8 - Territory franchise sales (3.3) (1.1) 27th w eek - (2.0) Currency im pact - 1.5 A djusted profit 22.5 20.3
Slide 14: Hard Rock
H ard Rock £m 2001 2000 G row th Reported profit 24.0 21.9 Restructuring costs 1.8 - Territory franchise sales (3.3) (1.1) 27th w eek - (2.0) Currency im pact - 1.5 A djusted profit 22.5 20.3 2.2 G RO W TH £m Cafes (0.7) Franchise -Cafes 0.5 -H otels 1.1 O verheads 1.3 2.2
Slide 15: Hard Rock – like for like sales
H ard Rock – like forlike sales % First half Q 3* Year to date Food and Beverage -0.5 -1.0 -0.6 M erchandise -7.1 -2.9 -5.9 Total -3.5 -1.9 -3.0 % First half Q 3* Year to date U SA -5.0 -3.5 -4.6 Europe +3.8 +5.3 +4.3 * 9 w eeks to date
Slide 16: Deluxe
D eluxe £m 2001 2000 Turnover Film Processing 154.3 135.6 Video Duplication 124.8 166.3 DVD Replication 2.9 1.4 282.0 303.3 O perating profit Film Processing 23.4 22.7 Video Duplication 1.5 2.9 DVD Replication (2.2) (2.1) 22.7 23.5
Slide 17: Deluxe Video
D eluxe Video £m 2001 2000 Turnover US 81.2 114.9 Europe 43.6 51.4 124.8 166.3 O perating profit US 4.8 3.4 Europe (3.3) (0.5) 1.5 2.9
Slide 18: Video US - restructuring benefit
Video U S -restructuring benefit £m Turnover Profit 2000 reported 114.9 3.4 Fox im pact (36.0) (7.3) 2000 proform a 78.9 (3.9) 2001 actual 81.2 4.8 Benefit 2.3 8.7
Slide 19: Interest
Interest • £25.7m reduction • Average rate of7.5% (2000 – 7.4% ) – gross debtw as 98% fixed atrate of7.5% • Second halfinterestrate w illreduce – interestrate sw aps – refinancing of£65m fixed debt
Slide 20: Tax
Tax • Effective rate reduced to 19.5% (2000 – 21.5% ) • FRS 19 – im plem entation in 2002 – tax rate naturally tends tow ards statutory rates – recognition ofdeferred tax asset – no im pacton cash flow
Slide 21: Exceptional items
Exceptionalitem s £m 2001 D eluxe Video Europe restructuring (6.9) Sale and leaseback of A rkansas 14.4 O ther disposals (1.0) 6.5
Slide 22: Cash flow
Cash flow £m 2001 2000 O perating activities 104.1 181.3 Capex (51.7) (82.3) Sale of fixed assets 32.7 10.3 O perating cash flow 85.1 109.3 Interest,tax and dividends (85.0) (122.6) D istributions from associates 2.4 1.2 Free cash flow 2.5 (12.1) A cquisitions / disposals (2.2) 308.0 Share buy back
Slide 23: Capital expenditure
Capitalexpenditure £m 2001 2000 2001 estim ate G am ing 22.2 19.3 45-50 H ard Rock 11.7 5.4 30-35 D eluxe 17.1 10.1 35-40 D iscontinued and other 0.7 47.5 - 51.7 82.3 110-125
Slide 24: Mike Smith, Chief Executive
M ike Sm ath Chief Executive Rank Group
Slide 25: The trading environment
The trading environm ent • Econom ic dow nturn – little discernible im pact • Being vigilant – costreduction – strengthened m arketing
Slide 26: Mecca Bingo
M ecca Bingo • Anotherrecord result • Strong com petitive perform ance • M arketing plans • Acquisitions and developm ent
Slide 27: Grosvenor Casinos
G rosvenorCasinos • M ixed result • Continued estate enhancem ent • Hard Rock casino developm ent • W ellpositioned for G am bling Review recom m endations • InternetG am ing laterthis year
Slide 28: The Gambling Review
The G am bling Review • Very enthusiastic • A realopportunity forgrow th • Significantprofitgains • Bingo /casino flexibility • Investm entrequirem entcontainable • Strong com petitive position • Tim ing? New Legislation?
Slide 29: Hard Rock
H ard Rock • M ore than held ourow n ! • Trading environm ent • Localm arketing • Developm ent • Brand endorsem ent – hotels – casinos
Slide 30: Deluxe
D eluxe • Film – footage stillincreasing – new labs • Video – restructuring success – high service levels • DVD – m arketrem ains difficult
Slide 31: Conclusion
Conclusion • G am ing • Hard Rock }G row th + developm ent • Deluxe -strong contributor • Capacity to act