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5 Things You Should Know About GuocoLeisure

GuocoLogoHotel group GuocoLeisure Limited (SGX: B16) may not be a household name in Singapore, but its 37 Thistle and Guoman Hotels are well known in the UK.

However, the company actually started life in New Zealand back in 1961, as BIL International – a company founded by entrepreneur Sir Ron Brierley.

Stamps  

Born in 1937, to a middle class family in Wellington, New Zealand, Brierley started his business career young – with stamps. Whilst still at school he acquired a dealer’s certificate and bought bags of stamps – enjoying searching through in the hope of finding an elusive stamp that would be worth more than all the others.

He proceeded to launch his own Kiwi Stamp Company – selling his first set of stamps to the teacher that ran the stamp club – much to the irritation of his headmaster.

Brierley left school and took a job as a clerk while studying accountancy part-time for a while. However, it was at this point he discovered the share market.

Research  

Brierley enjoyed the buying and selling of shares, researching heavily and looking into likely future takeovers and business prospects before buying. He also rapidly realised that there were many ways to make gains – particularly where the underlying value of assets was not represented by the share price, or where the business was not being run in an efficient manner.

Tip sheet  

Indeed, Brierley was so confident that he reckoned others could benefit from his advice. In 1956, he decided to write his own share market tip sheet, advertising it heavily and claiming (not altogether truthfully) that he was an international and very successful share market analyst and tipster.

He then sent unsolicited copies to every public company in New Zealand along with a bill for the magazine. Amazingly, many of them paid up.

BIL

While researching the tip sheet gave him the opportunity to study the New Zealand stock market, Brierley realised he preferred to be an active player. In 1961 he set up R.A.Brierley Investments Ltd (BIL). Despite having no capital, Brierley advertised heavily, claiming to be a prominent investor who could give investment returns that were better than could be gained elsewhere – until he had sufficient seed capital to start investing.

While his early investment success was limited Brierley worked extremely hard, being the only investment worker and researching prospective investment companies thoroughly. By the 1970s his hard work paid off and BIL started to see growth – by 1981, BIL was one of the 20 largest companies in New Zealand and by 1984, it was the largest by market capitalisation.

By the latter half of the eighties, BIL was worth $12bn in today’s money and streetwise corporate raider Ron Brierley a household name.

Black Monday

However, BIL stumbled after the Black Monday (or Black Tuesday as it was known in Australia and New Zealand) stock market crash in 1987. Brierley was eventually deposed in a boardroom coup, although he remained on the board.

The nineties saw BIL suffer a disappointing performance, with lacklustre investments and badly managed foreign exchange risk. The company also decided to move from an investment to an operating company – borrowing heavily to take control of the Thistle Hotel group in 1991, only to see the British hotel industry slump.

GuocoLeisure  

Following the Asian economic crisis of 1997 the BIL board re-assessed its strategy, focusing on a smaller number of companies. Sir Ron Brierley left the BIL board in 2001 and the company changed its name to GuocoLeisure in 2007.

But did you know…

  1. Ron Brierley took his school Stamp Club very seriously. If any pupils fell behind with their payments, Brierley would type out reminder notices and      issue them to their parents.
  2. Brierley would painstakingly research the companies for his tip sheet at the Company Registration Office, recalling “It cost a shilling to do this and I wanted full value for my shilling so I would ask for a list of shareholders, usually from a shelf covered in dust.”
  3. In 1987, BIL had a stake in over 300 companies, including Paris department store Galleries Lafayette and Air New Zealand.
  4. Brierley is a big cricket fan and was a Trustee of the Sydney Cricket and Sports Ground Trust 1988-96, and President of New Zealand Cricket in 1995.
  5. Brierley hates disorder – so much so that he keeps the same hotel suite permanently booked in London.

Today, GuocoLeisure is an investment holding company with its principal investments in hotel management & operations, oil & gas and other areas of the leisure industry. It also owns and operates the Clermont Club, a members-only casino in London.

GuocoLeisure’s hotel branch GLH is the tenth largest hotel group in the UK operating in the mid to upscale market segment.

Its latest projects locally include the Clermont Singapore Hotel, located above Tanjong Pagar MRT station and currently under construction which, when completed will be Singapore’s tallest building, standing at 290m. Clermont Kuala Lumpur is also due to be completed in 2016.

GuocoLeisure also receives royalties from the Bass Strait Oil Trust and is involved in property development through its subsidiaries Molokai Properties and Tabua Investments.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.