Rank, the leisure conglomerate, today aired the possible sale of its Deluxe film and video business, focusing on gaming and restaurants, as it reported a 20% drop in profits.

The owner of the Hard Rock Cafe and Mecca bingo reported a pre-tax profit of £60.2m in the six months to June 30, down from £77.4m the previous year.

Rank said its casinos were hit by increased competition, while the introduction of new EU legislation requiring immediate guest identification had affected attendance at regional UK sites.

Meanwhile, profits at the Deluxe media unit, which replicates and distributes films, VHS videos and DVDs, shrank 31% to £19.2m. Adding to Rank's woes, the 100-strong chain of Hard Rock cafes saw a 13% drop in profits as adverse currency movements cut revenues by £10m.

With profits dropping sharply, Rank said it was considering a sale of some of its operations.

"The board believes that, in principle, and subject to a detailed review of the implications, now would be an opportune time to separate both Deluxe Film and Deluxe media from the rest of the group," said chief executive Mike Smith.

But the company said that following a period of uncertainty, there were signs of a pick-up in international travel and tourism. Despite the drop in profits, the company raised its interim dividend 4.3% to 4.8p a share.

The possibility of a break-up was mooted by the firm's internal broker in June and Rank said it would provide an update early next year.

Once a sprawling leisure conglomerate, Rank has sold off well-known names such as Pinewood film studios, Odeon cinemas and Butlins holiday camps to focus on restaurants, gaming and film and video services.