Slide 1: The Rank Group Plc Preliminary Results 2001
The Rank G roup Plc Prelim inary Results 2001
Slide 2: Alun Cathcart, Chairman
A lun Cathcart Cham an ,2 Rank Group
Slide 3: Mike Smith, Chief Executive
M xke Sm ith Chef Executve ,2 Rank Group
Slide 4: Group - Results
G roup -Results • EPS up 30% to 22.5p • G am ing very strong,up 16% • Hard Rock dow n since 11 Septem ber • Deluxe up,driven by positive film results • O perating cash positive • Low erdebt(£248m ) • Finaldividend up 5% to 8.4p
Slide 5: Group - Progress
G roup -Progress • Increasing confidence • Allround strength – business perform ance – balance sheet • Added second halfrevenue grow th, w hilstcontrolling m argins – G am ing – Deluxe Film • Positioned forfurtherdevelopm ent
Slide 6: Ian Dyson, Finance Director
Jan Dyson Fnance D xector ,2 Rank Group
Slide 7: 2001 Results - Summary
2001 Results -Sum m ary £m 2001 2000 Continuing businesses* Turnover 1,366.9 1,404.1 O perating profit 209.7 203.1 D iscontinued businesses - 59.7 A ssociates 2.7 (9.4) Interest (24.3) (67.4) Profit before tax* 188.1 186.0 Earnings per share* 22.5p 17.3p N et exceptionalcharge (27.6) (527.1) * befor
Slide 8: 2001 Results - Financial position
2001 Results -Financialposition • Netdebtdow n to £248.1m • G earing of42% ,fixed charge coverof4.6 tim es • Netcurrentassets of£331.9m • Efficienttax situation • Xerox issue resolved • Pension surplus of9%
Slide 9: 2001 Results - Operating profit
2001 Results -O perating profit £m 2001 2000 Change G am ing 95.7 82.4 16% H ard Rock 38.0 46.3 (18% ) D eluxe 74.1 73.3 1% U S H olidays 9.5 10.0 (5% ) Centraland other (7.6) (8.9) 15% O perating profit* 209.7 203.1 3% * continuing businesses before exceptionalitem s
Slide 10: Gaming - Operating Profit
G am ing -O perating Profit £m 2001 2000 Change M ecca Bingo UK 67.6 54.9 23% Spain 3.5 3.6 (3% ) 71.1 58.5 22% G rosvenorCasinos UK 23.4 21.0 11% Belgium 0.7 0.7 - 24.1 21.7 11% RLM S 2.3 2.2 5% Rank.com (1.8) - 95.7 82.4 16%
Slide 11: Mecca Bingo UK - Growth rates
M ecca Bingo U K -G row th rates H1 H2 2001 Spend per head 12.5% 10.0% 11.4% A dm issions (11.1% ) (4.2% ) (7.8% ) Turnover 0.1% 5.4% 2.8% O perating profit 25.9% 20.7% 23.2% Profit m argin 29.8% 30.0% 29.9%
Slide 12: Grosvenor Casinos UK
G rosvenorCasinos U K £m 2001 2000 Change Turnover London -upper 18.9 38.2 (51% ) London -other 51.9 47.0 10% Provincial 69.8 61.7 13% 140.6 146.9 (4% ) O perating profit London -upper 3.0 6.7 (55% ) London -other 11.6 9.2 26% Provincial 16.5 12.7 30% O verheads (7.7) (7.6) (1% ) 23.4 21.0 11%
Slide 13: Grosvenor UK - Growth rates
G rosvenorU K-G row th rates H1 H2 2001 London -other Adm issions (1.3% ) 1.6% 0.2% Handle perhead 2.6% 5.5% 4.3% Turnover 3.4% 17.4% 10.4% Provincial Adm issions (4.4% ) 4.1% (0.2% ) Handle perhead 6.3% 18.4% 12.3% Turnover 2.6% 23.9% 13.1%
Slide 14: Grosvenor UK - Relocations
G rosvenorU K -Relocations Change in average w eekly figures* A dm issions +63% H andle per head +43% EBITD A im provem ent +£77k Capitalcost £17m Return on capital 23.6% * Birm ingham ,Blackpool,G reatYarm outh, New castle and Southam pton
Slide 15: Hard Rock - Operating profit
H ard Rock -O perating profit* £m 2001 2000 O w ned cafes 41.5 54.3 Franchise and other incom e Cafes 7.5 7.9 Hotels 2.3 0.1 Territory sales 4.2 4.4 A dvertising and prom otion (1.7) (5.0) O verheads (14.1) (15.4) Restructuring (1.7) - O perating profit 38.0 46.3 Profit to A ugust 37.2 35.1 * 2001 -
Slide 16: Hard Rock - Like for like sales
H ard Rock -Like forlike sales Pre Post 2002 % 2001 11 Sept 11 Sept to date Total -6.7 -3.0 -17.1 -4.4 Food and Beverage -4.1 -0.6 -13.4 -0.6 M erchandise -9.8 -5.8 -22.1 -10.6 North Am erica -8.0 -4.6 -17.9 -4.0 Europe -0.5 +4.4 -13.9 -6.7
Slide 17: Hard Rock - Owned cafes cost structure
H ard Rock -O w ned cafes coststructure % of revenues Revenues F&B 55 M erchandise 45 100 Cost of Sales F&B (16) M erchandise (12) (28) Labour (22) O ther variable costs (8) G ross profit 42 Rent,property and related (17) D epreciation (5) Cafe trading profit 20
Slide 18: Deluxe - Operating profit
D eluxe -O perating profit £m 2001 2000 Turnover Film processing 341.5 300.2 Video services 285.9 346.8 DVD replication 7.2 4.1 634.6 651.1 O perating profit* Film processing 53.9 48.6 Video services 22.9 29.4 DVD replication (2.7) (4.7) 74.1 73.3 * before exceptionalitem s
Slide 19: Deluxe - Cash flow
D eluxe -Cash flow £m 2001 2000 O perating profit 74.1 73.3 D epreciation 28.7 35.1 Contract advances Am ortisation 71.2 63.3 New advances (38.2) (75.8) W orking capital (13.7) (10.0) Capitalexpenditure (33.5) (24.2) O perating cash flow 88.6 61.7 A cquisitions/disposals 49.1 44.1 N et cash generate
Slide 20: Deluxe - Balance sheet
D eluxe -Balance sheet £m 2001 2000 Tangible fixed assets 120.9 179.7 Contract advances Receivable 200.8 191.5 Payable (86.0) (44.5) 114.8 147.0 N et w orking capital 79.6 69.3 Provisions (8.6) (6.5) N et operating assets 306.7 389.5
Slide 21: 2001 Results - Cash flow
2001 Results -Cash flow £m 2001 2000 O perating cash flow 178.3 233.5 Interest,tax and dividends (151.1) (179.5) A ssociates 2.4 2.6 Free cash flow 29.6 56.6 A cquisitions / disposals 38.5 1,167.6 Share buy back - (304.3) N et cash flow 68.1 919.9 N et debt 248.1 319.9
Slide 22: Capital expenditure
Capitalexpenditure £m 2001 2000 2002 estim ate G am ing 48.5 34.3 60 -70 H ard Rock 20.0 13.9 35 -40 D eluxe 33.5 24.2 20 – 25 O ther 1.3 1.1 - Continuing businesses 103.3 73.5 115 -135 D iscontinued - 71.1 103.3 144.6
Slide 23: Mike Smith, Chief Executive
M xke Sm ith Chef Executve ,2 Rank Group
Slide 24: Gaming - Results
G am ing -Results • Bingo -a record – adm issions /spend perhead – prom otionalactivity – second halfgrow th • Casinos -a record – adm issions /spend perhead – relocations /facilities – second halfgrow th
Slide 25: Gaming - Growth and development
G am ing -G row th and developm ent • The generaldynam ic -very positive • Fullyearim pact – investm ent – lateropening – m achines • M ore upgrades to the sam e form ula • Hard Rock Casinos • Budd /Deregulation • InternetG am ing
Slide 26: Hard Rock - A story of two parts
H ard Rock -A story oftw o parts • Firstpart – im proving sales trend – increased profit • Second part – virtually zero profit – gradualsales recovery
Slide 27: Hard Rock - Growth and development
H ard Rock -G row th and developm ent • Localm arketing (+ tourism recovery?) • Cafe reconfiguration • Cafe expansion /developm ent • Hotels • G am ing
Slide 28: Deluxe
D eluxe Film -a record Video -furtherrestructuring • Film – increased footage – Rom e Lab furtherpositive } – Toronto Lab im pactin 2002 • Video – US successful organisational } – Europe problem atic integration
Slide 29: Deluxe - Development and growth
D eluxe -Developm entand grow th • Film – dynam ic rem ains positive – European m arketopportunity • Video – decline butconsolidation opportunities – distribution strength • DVD – an im proving m arket • Added services
Slide 30: Conclusion
Conclusion • Strategy delivering the results • Im proving grow th prospects in both short and m edium term • Increasing strength • Seeking furtheropportunities