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GuocoLeisure feels impact of euro-zone debt crisis

Tuesday 7th February 2012

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GuocoLeisure, the Singapore-listed investment group once known as Brierley Investments, posted a decline in first-half sales on a drop in revenue from its UK-based Clermont Leisure casinos and said Europe’s debt crisis is denting sentiment.

Sales fell 5.2 percent to US$189.7 million in the six months ended Dec. 31, the company said in a statement released to the NZX today. Net profit rose 2.2 percent to US$36.6 million, helped by reimbursement of expenses from settlement of a dispute of its Bass Strait oil and gas royalty.

GuocoLeisure’s biggest assets are its Guoman Hotels chain in the UK, which grew out of the Thistle Hotels group originally acquired when the company was Brierley. Other investments include Molokai Properties, which owns farmland ear-marked for developed in Hawaii, Bass Strait in Australia and Tabua Investments, a Fiji-based property developer.

Revenue from its hotels gained 2.3 percent though “volatility in the gaming sector affected overall revenue performance,” the company said. Personnel expenses climbed 8.9 percent to $51.4 million as the company hired more sales and marketing workers for its hotels.

“The continuing uncertainty in Europe, especially with regard to the sovereign debt crisis in the Euro-zone, has adversely affected business sentiment, particularly in the hospitality business in the UK,” the company said. “The group remains cautious about the business outlook for the rest of the year.”

Revenue from Bass Strait jumped 40 percent to US$31 million, as a result of higher prices for oil and gas. GuocoLeisure also received a one-off royalty distribution of US$5.4 million from resolution of its dispute.

GuocoLeisure’s NZX-listed shares last traded at 63 cents and have gained 8.6 percent this year.


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