Rank Group (RNK) H2 2004 earnings summary

Executive summary

• Adjusted EPS rose 4% to 20.0p; adjusted operating profit fell to £204.9m from £218.0m, with a £233.4m exceptional charge.

• Free cash flow increased to £36.3m from £17.1m and net debt fell to £606.7m from £700.5m; the full-year dividend rose to 14.6p.

Financial highlights

• Adjusted operating profit was £204.9m versus £218.0m; EPS was 20.0p versus 19.2p. 2003 figures were restated for FRS 17 and UITF 38.

• Exceptional charge totaled £233.4m, including a £19.0m cash cost; free cash flow was £36.3m versus £17.1m.

• Net debt closed at £606.7m versus £700.5m; final dividend rose 5% to 9.8p, bringing the annual dividend to 14.6p.

Outlook and guidance

• 2005 capital expenditure estimate was £80m–£110m, versus £112.4m in 2004; estimated spend included £50m–£60m for Gaming and £20m–£30m for Deluxe.

• Deluxe Media sale process was underway; separation of Deluxe Film remained a priority, with work continuing on its complex process.

• First IFRS reporting was scheduled for H1 2005, due September; expected pre-tax profit impact was described as modest, with an update planned for Q2 2005.