Rank spin-offs worth £600m

RANK, the Mecca Bingo to Hard Rock cafes group, expects to reveal the spin-off of Deluxe Film and Deluxe Media by the time it reports its full-year results in February.

Analysts expect the two companies to be valued at around £600m whether they are demerged or sold off to a private equity house.

The two businesses, which process feature films and copy them onto videos and DVDs respectively, are suffering from a lack of blockbusters and difficult trading conditions.

Deluxe Media's DVD volumes are well ahead of last year, but Rank chief executive Mike Smith said they were still well below the group's expectations for the busy run-up to Christmas. Unlike major competitors Technicolor and Cinram, Rank only has contracts with a limited number of film studios who are not among this season's blockbusters.

Overall, Rank said its second-half performance had seen a good pick up in both the gaming and Hard Rock divisions which should mean full-year results will be 'broadly in line with current market expectations'.

Since the half-year end of 30 June, attendance at Mecca Bingo is up 1% with turnover 6% higher. Grosvenor casinos had a better second half with more punters pushing more cash across the tables.

At Hard Rock, food sales so far in the second half are up 2.2%, but merchandising is down by 4.5%, giving an overall, like-for-like rise of just 0.6%.