Bottom Line: Lack of focus hampers Rank

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The Independent Online
RANK Organisation is so widely spread over the diverse and expanding leisure industry that it is difficult to see how the company will ever be able to make a thoroughly bullish trading statement.

Rank's interim figures show better returns from its Rank Xerox associate, film and television, and surprisingly flat results from social and bingo clubs which have still to feel the impact of the National Lottery.

Failure to secure the lottery cost Rank pounds 5m, and an unquantifiable amount in profile elevation on television.

Film and television operations, particularly video duplication, are enjoying something of a boom. However, this aspect of mass-market, low-priced leisure could be in for an unpleasant shake-up in the lurking shape of video-on-demand.

Rank argues, and quite convincingly, that it will not see any effect for a couple of years. What it does not know, however, is how big this will be.

Positive points for Rank are that leisure spending is recovering in its main markets in the US, UK and Europe and that it still has a captive audience. Regardless of what happens, people will still go to bingo, nightclubs, casinos and holiday camps.

A likely full-year pre- exceptional profit of pounds 337m, against pounds 277m, puts the shares, up 13p to 404.5p, on a p/e of 17.3. Total dividends of 12.8p - a rise of 5.5 per cent - gives a yield of 4 per cent. Better investment opportunities exist among smaller, and more focused leisure stocks.

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