Guocoleisure

Guocoleisure: 1QFY15 result was in line with net profit flat at US$16.6m. Revenue fell 6.3% to US$101m due to lower revenue from the gaming and property development segments, with management expecting volatility in the gaming sector will continue to affect overall revenue performance. Meanwhile, hotel revenue was stable compared to the previous corresponding quarter. Income from the Bass Strait oil and gas royalty in Australia increased by 12.1% to $13.0m, due to higher royalties received as a result of higher average crude oil and gas prices during the quarter. This helped to lift EBITDA margin slightly to 33.9% from 32.9% from the previous year. Going forward, GuocoLeisure guides that the refurbishment programme for its hotels is in progress and will continue over the next 12 months, thereby impacting the availability of rooms for occupancy over this period The London hotel market is expected to continue to grow over the next year albeit at a slower pace, with most, if not all, of the growth likely coming through rising average daily rate as occupancy levels have peaked across the city. Soft launch of group’s first hotel under its new “Amba” brand is targeted for 2Q14, with the group on track to complete the refurbishment and open the first hotel under its new “every” brand in 1Q15. GuocoLeisure currently trades at 0.92x P/B. Latest broker ratings: CIMB maintains Buy with TP $1.18 (prev. $1.23)