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Profits down at Hard Rock Café

22 September 2004
Profits down at Hard Rock Café

Poor merchandise sales and adverse currency effects have hit both turnover and profits at Rank Group's Hard Rock Cafés, the company said this week.

In the six months to 30 June, operating profit across Rank's Hard Rock business fell 12.8% to £11.6m, with turnover dropping 2% to £112.9m.

Excluding the impact of adverse currency movements, which Rank calculated at more than £10m, turnover at Hard Rock increased by 7%.

The company added that like-for-like sales in its owned caf‚s were up 1.5% during the period, with Europe seeing a marked 3.8% hike. Increases in North America were more modest, up by just 0.7%. Overall, both markets experienced growth in food and beverage sales, but profits were offset by negative merchandise sales.

Rank said that despite continuing uncertainty, like-for-like sales in Hard Rock since the end of the period were in line with expectations.

The group also announced it was embarking on a demerger of its gambling, hotel and restaurant business from its film and media operations. The decision comes ahead of the anticipated deregulation of UK gaming and was taken because of the opportunities Rank sees for its Hard Rock brand in both hotels and casinos.

An update on the demerger is expected early next year.

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