Property group GL hit by Brexit jitters

London's Royal Horseguards hotel, which was rebranded as the Clermont London hotel in 2014. GL operates hotels in London, with 17 across six brands, including Clermont Hotels and Residences and Guoman Hotels.
London's Royal Horseguards hotel, which was rebranded as the Clermont London hotel in 2014. GL operates hotels in London, with 17 across six brands, including Clermont Hotels and Residences and Guoman Hotels.PHOTO: COURTESY OF GLH

Former GuocoLeisure's profits for second quarter fall 32%

Uncertainty over Brexit hit property group GL Limited, the former GuocoLeisure, in the second quarter.

The weakness in the British pound and volatility in the hotel industry that stemmed from the June vote helped send net profit down 32 per cent, from US$19.9 million last year to US$13.6 million.

Revenue escaped a little more lightly, falling 24 per cent to US$86.7 million for the three months to Dec 31.

The company attributed the 20 per cent fall in turnover for the half year to currency changes.

GL operates hotels in London, with 17 across six brands, including Clermont Hotels and Residences and Guoman Hotels.

  • AT A GLANCE

    NET PROFIT: US$13.6 million (-32%)

    REVENUE: US$86.7 million (-24 per cent)

It also owns a private gaming club and receives oil and gas royalties.

Hotel revenue expressed in United States dollar terms decreased by 18 per cent compared with the corresponding period due to the weakening of the British pound against the greenback.

In fact, hotel revenue per available room improved by 3 per cent compared with the same period the year before, along with an increase of 5 per cent in the average hotel room rate.

Oil and gas royalties also lifted the company's profits.

There was higher gas production and appreciation of the Australian dollar against the greenback, it said.

Earnings per share for the quarter was 1.1 US cents, compared with 1.6 cents for the same period in 2015.

Net asset value for the group was 75.9 US cents per share as at Dec 31 compared with 80.9 US cents as at June 30 last year.

The company warned that it expected the volatility in the British hotel industry to remain in the months ahead.

However, it said that the weakness in the pound could "provide a boost for inbound travel into the United Kingdom", but added that it would adversely impact its hotel revenue.

The company said it would continue with its hotel refurbishment programme and expects to launch three renovated outlets in the next year.

GL Limited shares closed up half a cent at $0.785.

A version of this article appeared in the print edition of The Straits Times on January 20, 2017, with the headline 'Property group GL hit by Brexit jitters'. Print Edition | Subscribe