Deluxe Contracts Update

Rank Group PLC
18 May 2004

UPDATE ON DELUXE CONTRACTS

In its trading statement issued on 27 April 2004, The Rank Group Plc ('Rank' or
'Group') reported that it was in discussions regarding two Deluxe Media
contracts that were due to expire in 2004, and two film contracts which it was
seeking to extend early.


DELUXE MEDIA
Deluxe Media Services ('DMS'), has extended one of the two outstanding contracts
which covers the production of VHS and the distribution of VHS and DVD in the US
until at least the end of 2005. As part of the new arrangements, DMS has gained
additional compression, encoding and authoring business from the studio
concerned.

In respect of the other outstanding contract, which relates primarily to the
european DVD manufacturing and distribution business, DMS has been informed that
the studio concerned will be transferring the business to a new supplier on a
staged basis over the period to July 2005. In 2003, this contract accounted for
48% of DVD units supplied and 18% of total packaged media units distributed by
DMS. In view of the anticipated timing of transfer of the business, Rank expects
that there will only be a small impact on the Group's operating profit before
exceptional items in 2004.

Whilst the loss of this contract is disappointing, active negotiations for
additional contract business in both the US and Europe are currently in progress
and are expected to reach a conclusion over the next few months. The underlying
growth in the DVD market is expected to remain strong for the next few years,
but the ability of DMS to continue to deliver an acceptable return and maintain
profitability at the level anticipated in 2004 will be dependent upon gaining
new studio contracts.

Subject to progress made on new contract wins during the remainder of the year,
an exceptional charge may be incurred in 2004 relating to the impairment of
certain manufacturing and distribution assets associated with the lost contract.


DELUXE FILM
In Deluxe Film, the Group has successfully extended one of the two contracts
referred to in the trading statement and which was due to expire in 2006. The
contract, which represented 15% of 2003 contracted volume, has been extended
until 2009 so that approximately 82% of Deluxe Film's total 2003 contracted
volume is now secure until 2006 and 55% is secure until at least 2009.
Discussions regarding the other contract are continuing and the Group is
confident that it too will be extended within the next few months.

                                    - ends -

ENQUIRIES:

The Rank Group Plc                                         020 7535 8000
Mike Smith, Chief Executive
Ian Dyson, Finance Director
Peter Reynolds, Director of Investor Relations

The Maitland Consultancy                                   020 7379 5151
Angus Maitland
Suzanne Bartch



                      This information is provided by RNS
            The company news service from the London Stock Exchange