Newspaper article The Evening Standard (London, England)

Rank Gets the Rallying Call from Broker UBS

Newspaper article The Evening Standard (London, England)

Rank Gets the Rallying Call from Broker UBS

Article excerpt

Byline: MICKEY CLARK

PROSPECTS are looking a lot brighter these days at that old takeover favourite Rank Group under new chief executive Ian Burke.

Shares in the Gala Bingo and Grosvenor casino operator continued to rally off the bottom today with a rise of 7p to 199p after broker UBS raised its rating on the shares from neutral to buy and jacked-up its 12-month target price from 215p to 240p.

The broker reckons Burke has wasted little time in getting his feet under the table and has embarked on an aggressive cost-cutting regime that could save Rank [pounds sterling]20 million.

Not only is he proceeding with the sale of the Hard Rock Cafe chain and closure of the group's Marble Arch headquarters, he has also set about removing duplicated overheads between the centre and the gambling division.

UBS says profits at the casino division remain robust and sees potential from improvements to the bingo division. Rank has often been tipped as a potential takeover target, especially following the sale of its film duplication business. The shares have slumped from a peak of 294p since the start of the year.

Share prices generally were quick out of the traps with the help of a few bargain-hunters in the wake of yesterday's sell-off. But they were unable to maintain their early pace and their gains were pared back. The FTSE 100 index touched 5866.6 before reducing its lead to 13.1 at 5841.9.

Dealers attributed this to caution by investors ahead of tonight's meeting of the US Federal Reserve which could signal another quarter-point rate rise and a further slowdown in the US economy. American interest rates have risen 17 consecutive times since June 2004 as the Fed battles to contain inf lationary pressures brought on by such things as soaring energy costs.

Morgan Crucible rose a further 13/4p to 2833/4p on news of a bid approach. …

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