Rank drops curtain on 50 years in films

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The Independent Online
THE Rank Organisation, Britain's largest leisure group, is planning to turn its back on more than 50 years of involvement in the British film industry by selling its Odeon cinema chain, its film distributors and its film library.

Senior leisure sources say they have seen a sale memorandum from Rank inviting offers for the businesses, which Rank is said to value at around pounds 300m. The company is in the middle of a programme of asset sales designed to reduce its huge debt burden.

The businesses expected to be sold include the Odeon chain of cinemas, the UK's largest, and Pinewood Studios, one of the film world's centres of excellence. The film library stretches back to the heyday of British film-making, when J Arthur Rank was synonymous with the industry.

Included in the sale will be the film distribution operation, a fickle business where profits can be affected by a big success or failure.

The group has been working hard to reduce the massive debt burden it took on when it bought Mecca Group two years ago. It has already put its 22 hotels up for sale but analysts believe the price obtained will be substantially less than the pounds 250m Rank had been hoping for.

At the half-year stage Michael Gifford, Rank's chief executive, said its debts stood at pounds 989m and that operating profits covered interest charges just three times, causing some concern in the City.

Last year operating profit in the film and television division, which includes the group's film laboratories, video duplication and precision industries operation, fell from pounds 36.7m to pounds 21.9m on a turnover that rose to pounds 613m. The operating assets of the division are valued in Rank's books at pounds 365m.

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