Quick Takeaways From GuocoLeisure Ltd’s Latest Full-Year Earnings


GuocoLeisure Ltd (SGX: B16), the largest owner-operator of hotels in London, released its full year results on Thursday. The firm is part of Hong Leong Group, which controls companies involved with financial services, property, and infrastructure development, among others. Among Singapore-listed shares, GuocoLand Limited (SGX: F17) is another company which is also part of the Hong Leong Group.

According to its website, GuocoLeisure is “an investment holding company with principal investments in hotel management & operations, gaming, oil & gas, property development and other areas in the leisure industry”.

Let’s take a look at the company’s earnings release and see what has happened in the 12 months ended 30 June 2014.

Due to higher revenue generated by the hotel and gaming segments as a result of growth in hotel Revenue Per Available Room and gaming win ratio, total revenue for the year increased by 6.8% year-on-year to US$406.0 million.

The firm receives royalties from the Bass Strait Oil Trust, a unit trust managed by Bass Strait Oil Management Limited. Royalties from the trust went down 7.0% to US$41.5 million on the back of lower average crude oil and gas prices, lower oil and gas production, and depreciation of the Australian Dollar against the US Dollar.

Despite an increase in revenue, GuoccoLeisure’s net profit for the year was lower by 11.4% to US$39 million, mainly due to higher material and staff costs. Diluted earnings per share for the year came in at 3.0 US cents, a 10% drop from 3.3 US cents a year ago.

GuocoLeisure will be dishing out a first and final dividend of 2.0 Singapore cents per share, unchanged from the previous fiscal year.

Going forward, the group expects the London hotel market to grow in the next few quarters at a slower pace, with growth coming through rising average daily rates as occupancy levels have already peaked across the city. The company is also slated to open the first hotels under its new brands of Amba and every at the end of this year.

GuocoLeisure closed at S$1.025 on Thursday. This translates to a price-to-earnings ratio of 27 and a dividend yield of close to 2%.

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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 Sudhan P doesn’t own shares in any companies mentioned.