Rank Organisation Plc. will stay out of the interactive multimedia revolution, preferring to stand by its long-held principle that “home” and “entertainment” don’t necessarily go together.
And for the year ended Oct. 31, it’s hard to argue with their winning philosophy.
Film, TV push
A strong performance from its film and TV business helped push Rank’s pretax profit to a starry T276.6 million ($ 412 million) for the year. This was more than double last year’s profit of T125.8 million ($ 187 million). Operating profit was up 14%. Total sales for the British leisure group increased 5% to T2. 12 billion ($ 3.16 billion).
Operating profit in the film and TV division rose by more than 60% to T35.7 million ($ 53.2 million), thanks mostly to higher volume and increased efficiency in Rank Film Laboratories. Profit also increased in video duplication and Odeon Cinemas.
But U.S. video distribution losses were only modestly reduced, following high levels of product returns from retailers in the last two months of the year.
Sales for the film and TV division totaled T630.5 million ($ 939 million), up from T561.4 million ($ 836 million) the previous year.
Florida profit grows
Rank’s share in the profit of Universal Studios Florida rose to T13 million ( $ 19.8 million) from T8.6 million ($ 12.8 million) last year.
Rank is Britain’s most prominent and diversified leisure group. Because Rank processes, duplicates, distributes and shows films — sometimes even funding them — it has plenty at stake if moviegoers come to require only a telephone, television and living-room sofa.
Yet Rank chief executive Michael Gifford said his company has “no plans” to enter the corporate push to reshape entertainment and personal services through the pooling of media programming, cable television and telecommunications.
“We won’t become a multimedia conglomerate,” he told reporters at a press conference that followed the year-end profit report.
Gifford did say that Rank will make further investments in programming, stepping up its investments in feature films, for example.
But “I’ve yet to be persuaded that the return (on investment in interactive media) will recoup costs,” Gifford said. “Perhaps that’s just my natural caution.”