Leisure company Rank Organisation Plc’s underlying annual pre-tax profits jumped by 37% to ú376.6m but actual pre-tax profit was cut by restructuring costs at Rank Xerox Ltd and other non-operating items, to ú284m, a rise of just 2.9% over last year’s figures. Rank, which is to change its year-end to December 31, said the current year was encouraging so far with operating results ahead of the comparable period last year. Rank’s share of Rank Xerox Ltd profits jumped to ú213.5m from ú151.2m the previous year, but after paying its share of restructuring costs, ú62m, the contribution more or less unchanged. And while announcing its results it reported that it would be selling a 40% of its stake in Rank Xerox to partner Xerox Corp for ú620m (see front page). Rank currently owns 49% of the Rank Xerox office equipment business. It said it estimated that the deal with Xerox would bring a gain of some ú325m over Rank’s net book value and cash from the sale would be used to cut debt and invested in its leisure and entertainment business. Rank said the sale should not create a big capital gains tax liability. Analysts said the deal would leave it with around 29.4% of the voting interest in Rank Xerox and 20% of the profits compared with around one third now. The group also said in the statement that it intended to buy the rest of the shares in the A Kershaw & Sons investment business, which also indirectly owns 19.8% of Rank Xerox, by way of a scheme of arrangement at ú11.50 a share. It said it would allow a 120p per share dividend payment by Kershaw if the scheme of arrangement takes effect.
