Rank Group is working on plans to split off its Deluxe international film and DVD business to focus on bingo, casinos and Hard Rock cafes.

If the film business is sold off or demerged it will bring to an end nearly 60 years of involvement in films for the company, which was named after its founder, the 30s movie mogul J Arthur Rank.

Chief executive Mike Smith said the Deluxe business was the "least best fit" among the company's betting, gaming and hospitality operations. "It is time for us to look at that position.

"We are using the word separation very carefully. It could mean a demerger, a sale or a number of things. But it will take several months."

Analysts have valued the business at between £400m and £800m. No adviser has yet been appointed. Deluxe has two divisions: film, which processes films for cinemas worldwide, and media, which manufactures and distributes VHS videos and DVDs

Mr Smith was unveiling half-year results for Rank which showed Deluxe operating profits down from £26.5m to £17.1m. The film services division turned in operating profits of £27.6m, but that was offset by losses of more than £10m in media. The DVD offshoot is highly seasonal and has been hit by the loss of a big contract with Fox.

Mr Smith said that now was the right time to consider a sale or demerger of Deluxe "because it has its best contract position ever".

However, it is not the first time that Mr Smith has tried to unload it. When he joined the company five years ago it was in deep trouble. He sold eight businesses, raising £1.5bn, but failed to find a buyer for Deluxe. This time a trade or financial buyer may be interested, because the business is highly cash generative.

The group's half-year profits fell from £80.2m to £63.9m but were in line with analysts' expectations.

The group's Claremont Club casino was hit when punters won more than usual and its Mecca bingo operations, which had axed admittance fees to boost player numbers, still saw its margins suffer.

Mr Smith said the first half had been "challenging and slightly disappointing" but insisted the outlook was good, if dependent on Deluxe media's second-half performance.

Brokerage Seymour Pierce said: "The results may look disappointing on a headline basis, but clear improvements can be expected in 2005."

The shares closed up 9.75p at 285.25p.