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GuocoLeisure's 3Q profit boosted by a tax benefit

Monday 14th May 2012

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GuocoLeisure, the diversified investment company previously named Brierley Investments, said net profit for the three months ended March 31 more than doubled to US$19.4 million, boosted by a tax benefit relating to the restructuring of two British hotels.

Before tax, profit for the three months fell to US$3.3 million from US$13.5 million, reflecting higher operating costs such as personnel expenses and higher raw materials and consumables costs in its hotels. The Singapore-listed company's lower pre-tax profit was despite revenue rising 2.6 percent, reflecting an 8 percent rise in hotel revenue.

GuocoLeisure said personnel expenses rose mainly because it expanded its sales and marketing teams for its British hotel operations. The company's income from its Bass Strait oil and gas royalty in Australia rose 8.8 percent to US$11.1 million, reflecting higher average oil and gas prices. Other operating income fell to US$2.3 million from US$14.2 million in the year earlier quarter, reflecting a cash distribution from the group's investments in the year-earlier quarter.

Net profit for the nine months ended March 31 rose 23.6% to US$56 million, again reflecting the tax benefit. GuocoLeisure said its net assets at March 31 were 2.6 percent higher than at June 30 last year at US$1.13 billion, mainly reflecting increased earnings. Cash flow for the nine months ended March 31 fell to US$16.1 million from US24.2 million, mainly due to spending on hotel refurbishment and payment of a higher dividend.

The company said the continuing Eurozone crisis and the double-dip recession in Britain have adversely impacted its hospitality business. “Trends for the rest of the yea are mixed though the business is expected to benefit from the run up to the Summer Olympics in London,” it said. GuocoLeisure's shares last traded on NZX at 57 cents, down from their most recent high at 63 cents in February but well above October's 49 cent low.

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