Mike Smith, the chief executive of Rank, is leaving after seven years with the bingo-to-casino group and will be replaced by Ian Burke, who heads the private equity-owned fitness chain Holmes Place.
Mr Smith has to step down from the leisure group before his 60th birthday next January and will retire at the annual meeting in March this year, the company announced yesterday. He retires after clinching the long-awaited £430m sale of Rank's Deluxe film processing arm to the billionaire financier Ron Perelman in December, which completes the break-up of the group he started in 1999.
Investors were disappointed by the net proceeds of the sale of about £300m, fearing the dividend would be chopped by about a quarter. But Rank said Mr Smith's departure was unrelated to investor feeling and pointed out that it started looking for a successor in October to ensure an "orderly handover". A spokeswoman said: "He is coming up to retirement age, and they found the right man to succeed him."
Mr Burke, 49, is a leisure industry veteran, having served as the chief executive of Thistle Hotels for five years before joining Holmes Place in 2003. Before Thistle, he worked for Bass/Intercontinental in various roles, including as managing director of the bingo operator Gala and subsequently as managing director of the Holiday Inns Europe, Middle East & Africa businesses.
Mr Burke is set to be paid an annual salary of about £500,000 plus benefits and a bonus. His pay package will be lower than Mr Smith's, reflecting the smaller size of the group. Mr Smith will be paid his £600,000 salary until his contract runs out in December.
After the Deluxe Film sale, Rank is expected to return between £250m and £300m to shareholders in the form of a share buy-back as part of a review of its capital structure. Details, including a final decision on the dividend, will be announced in March.
Rank is inching closer to a sale of its Deluxe Media business, which makes and distributes videos and DVDs, for its recently written-down book value of £23m. That leaves the group focused on its core leisure activities - Mecca bingo halls, Grosvenor casinos and Hard Rock cafes.
The shares have been supported by persistent bid speculation, centring on the bookmaker William Hill or Hilton Group (to be renamed Ladbrokes shortly) as likely predators.Reuse content