Rank statement calms City fears

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The Independent Online
LEISURE analysts yesterday breathed a sigh of relief as Rank Organisation allayed any City fears of a further deterioration in trading by the industry's leading company. Rank's shares advanced 12p to 586p.

While the company remained cautious, Michael Gifford, chief executive, told analysts that trading conditions had not altered significantly since July's interim results. Cumulative trading from continuing operations remains similar to last year.

That statement reassured analysts, most of whom underscored previous profit predictions of between pounds 237m and pounds 246m for the 1991/92 year, which ends next month. Rank made pounds 250.5m in 1990/91.

'There was nothing for the bears to get their teeth into,' one analyst said.

Rank's update on trading to the end of September was tinged with caution, particularly towards any immediate improvement in its markets.

Because of that, Rank said its priorities remained unchanged: 'to manage cash flow, reduce the cost base and to maintain investment at a level which materially enhances its competitive position'.

Analysts expect Rank's capital expenditure to be held at pounds 190m in the coming year. They do not envisage any problems with debt repayment.

Rank said that in film and television there had been a 5 per cent rise in volumes for video duplication, although film laboratory volumes had fallen by 2 per cent. Losses continued in video distribution.

The UK holiday market was probably down by 15 per cent on 1991 but Rank's holiday businesses were likely to end the year with just 8 per cent fewer summer bookings. Bookings over the whole year would be down by less than 6 per cent. Bingo had 'traded strongly', with comparable admissions ahead by 2 per cent. Amusement centre results were lower.