Rank was once one of Britain’s biggest and best-known companies – a leisure and entertainment giant whose services were enjoyed by just about every family in the land every week.
Founded by the legendary J Arthur Rank in 1937 as the Rank Organisation, it was one of the UK’s biggest names in film, owning the Pinewood and Denham studios and, later, the Gaumont British and Lime Grove studios, as well as more than 600 cinemas across the country that eventually ended up trading under the Odeon banner.
The famous “man with the gong” sequence with which it opened its films heralded the start of many of the Carry On series and classics such as Laurence Olivier’s Henry V and David Lean’s Oliver Twist.
It later diversified into skating rinks, restaurants, a highly profitable joint venture with the US photocopying giant Xerox and, in 1972, bought the Butlin’s holiday camp business.
This was followed in 1990 by the acquisition of Mecca Leisure, the bingo and casinos operator once headed by Eric Morley, creator of the Miss World beauty competition.
Ever since, though, conglomerates have fallen out of fashion and Rank has, bit by bit, sold off many of those old businesses.
Image: Visits to Mecca bingo halls dropped last year from 11.6 million to 10.5 million
Today, the renamed Rank Group – it changed its name 11 years ago – has just three businesses: the Mecca bingo chain, which is the market leader; Grosvenor Casinos, Britain’s largest casino operator; and Enracha, a Spanish-based bingo, slot machine and sport betting operator.
Having fallen out of the FTSE-100 as long ago as September 1998, it is now a much smaller business than it once was, with a stock market valuation of just £916m.
And it is now 56.1% owned by Guoco Group, the investment vehicle of Malaysian billionaire Quek Leng Chan, who tried unsuccessfully to take full control in 2011 but nonetheless emerged as the majority shareholder.
The company’s latest results, published today, point to a business that is still going through immense change. Full year sales dropped very slightly, from £708.5m to £707.2m, but pre-tax profits on an underlying basis rose by 2% to £79.3m.
The big challenge faced by Rank, which two years ago teamed up with online gaming group 888 Holdings in a failed takeover bid for bookmaker William Hill, is how it continues adapting to the digital age.
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The number of people visiting their local casino or bingo club is falling – visits to Mecca dropped last year from 11.6 million to 10.5 million – and Rank is responding by shutting underperforming outlets.
Mecca closed its doors last year in West Bromwich and Bradford. Both businesses have also faced higher costs, for instance, in the form of the national living wage.
The good news is that those customers who are still going to the bingo are spending more. Rank has also introduced innovations to keep them spending, such as enabling customers to order food and drink on their phone to be delivered to their table, as well as special events targeted at specific groups of customers like students. A new bingo brand, Luda, has also opened.
Similarly, it is refurbishing its casinos, as well as stepping up investment in the websites of both Mecca and Grosvenor and has been extending, online, into areas like sports betting. This is the future of Rank: operating profits in its digital arm shot up by 63% last year.
The recent history British business is littered with examples of companies that failed to move with the times. Rank faces an awful lot of headwinds, not least a growing sense that the gaming sector faces more regulation, but its recent progress suggests it will not be one of them.
Source: Sky