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GL's Q1 net profit down 7% on lower revenue

THE former GuocoLeisure, now known as GL, saw its earnings fall in the first quarter, as the bottom line tracked a drop in group revenue on the back of lower turnover from the core hotel segment.

Net profit came in lower by 7 per cent on the previous year to US$16.2 million for the three months to Sept 30, according to unaudited results on Thursday. Revenue was down 2 per cent to US$95.9 million.

The group said that the decline in hotel revenue was mainly due to gains in the previous year in areas such as food and beverage turnover, which were driven by one-off events. It also cited the closure of a London hotel in October 2017, after compulsory acquisition for a high-speed rail project.

Earnings per share was flat on the year before at 1.3 US cents, while net asset value was 85.4 US cents a share, against 84.8 US cents as at June 30.

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GL held to a cautious outlook for the 12 months, pointing to weaker British economic growth amid uncertainties over the country's planned departure from the European Union, as well as soft household spending and a forecast for subdued real income growth.

"The hike in London's new room supply during 2018 will continue to depress growth in hotels' average daily rates," GL added, although it said that occupancies across the city remain high.

It said that the number of rooms available for sale will remain affected by the refurbishment of The Cumberland Hotel, but that property is on track for a relaunch as Hard Rock Hotel London in 2019.

No dividend was recommended, unchanged from the year prior.

GL shed half a Singapore cent or 0.68 per cent to S$0.73 before the results were announced.