Should You Buy Shares in Rank?
Vegas. As Britain headed towards the deregulation of its gambling
industry, Rank thought the management of gaming companies was the place
to be. Blackpool stood to be the new Vegas but without the sun. The
government, having been in favour of large-scale deregulation, has
changed its mind, however, and has progressively tightened its gambling
bill to protect the public.
This is the same public that can gamble as much as it likes at
internet-based casinos with no regulations. But when the gaming bill
makes it over the finishing line, it should at least create a stable
environment in which Ranks management can plan its strategy.
Rank has announced that it is looking at demerging into two divisions
gaming and Deluxe films. Deluxe has always been looked on as a cash
cow but has lacked the excitement of gaming in the eyes of investors.
On demerger, Deluxe is likely to be valued on a yield basis and may
prove attractive to a venture capitalist because the company, along with
three or four others, dominates the market.