For immediate release15 September 2006


Guoco record profit HK$5.6 billion, Four core businesses

Guoco Group (Guoco Group Limited, Stock Code: 053) announced today its final results for the year ended 30 June 2006.


The consolidated profit attributable to shareholders of Guoco Group Limited (Stock Code: 053) for the year ended 30 June 2006, after taxation and minority interests amounted to HK$5,637 million, representing an increase of 75% over that of last year. Earnings per share rose 75% to HK$17.22.

The major profit contributions (before finance cost and taxation) were the following:

  • total realised and unrealised gains on investments of HK$4,038 million;
  • total interest income of HK$796 million;
  • dividend income of HK$252 million;
  • property development and investment income of HK$182 million;
  • revaluation gains on properties of HK$304 million; and
  • contributions from associates and jointly controlled entity of HK$689 million.

    Overall turnover increased by HK$29.1 billion or 197% to HK$44.0 billion, mainly attributable to the increase of HK$28.0 billion in turnover from Proprietary Asset Management and the first-time consolidation of turnover for hotel operations of HK$1.9 billion since the acquisition of BIL International Limited in October 2005.


    The Company is recommending a final dividend of HK$3.00 per share and a special dividend of HK$1.00 per share. This special dividend payment to be made is a recognition of shareholders' support and patience giving the Company adequate time to transform its businesses successfully to achieve creditable profit growth and capital value over the past five years. These final and special dividend distributions together with the interim dividend of HK$1.00 per share already paid make a total dividend for the year amounting to HK$5.00 per share, representing an extraordinary increase of 32% compared to that paid last year.


    "In the fifth year of transformation into an investment and proprietary asset management company, we had stayed steadfastly on course with a clear vision to achieve superior, long-term sustainable returns for shareholders," said Mr. Quek Leng Chan, Executive Chairman of Guoco. "The results have been encouraging as we move ahead in this direction."

    Guoco undertook a share buy back of 107 million shares for HK$5.35 billion in 2001. This exercise had the effect of increasing the net asset value per share as at 30 June 2001 by HK$8.3 to HK$83.5. Since then with yearly profit generation and asset appreciation, our net asset value per share reached HK$112 as at 30 June 2006.

    Shareholders' funds increased 38% from HK$26.7 billion as at 30 June 2001, as adjusted for the share buy-back to HK$36.9 billion as at 30 June 2006, even after taking into account of the stream of annual dividend distributions totalling HK$3.5 billion paid out of an aggregate profit of HK$14.1 billion earned over the last five years.

    The Company's share price had doubled increasing 101% over the last five years from HK$45.7 per share as at 30 June 2001 to HK$91.90 as at 30 June 2006 outperforming the Hang Seng Index by over 76% in the same period.

    The Company's market capitalisation had grown in tandem from HK$19.5 billion to HK$30.2 billion as at 30 June 2006, an increase of 55% over five years versus the corresponding 25% increase of the Hang Seng Index.


    Last financial year was the fifth year in which the Group was transformed into an investment holding and proprietary asset management company. The Group now has four main businesses, namely Proprietary Asset Management, Property Development and Investment, Hospitality and Leisure and Financial Services. The progress made in these core businesses are shaping up well as pillars for future growth and expansion.

    Proprietary Asset Management is conducted by the Company while the other core businesses in Property Development and Investment, Hospitality and Leisure are undertaken by its subsidiaries GuocoLand Limited and BIL International Limited respectively. Financial Services is undertaken in its associate company Hong Leong Financial Group Berhad (renamed from "Hong Leong Credit Berhad" to reflect its current scope of business and activities).

    Proprietary Asset Management

    Proprietary Asset Management had made substantial contributions to the Company's bottom line. The Company has devoted effort and resources to build and hone over time the software system, investment infrastructure and synergistic analytical tools needed to develop an unique systematic investment process covering risk, control and timely processing of information for its Proprietary Asset Management.

    Property Development and Investment - GuocoLand Limited ("GLL")

    Property Development and Investment under its subsidiary GLL is an increasingly important core business contributing to the underlying creation of capital value for Guoco. Various re-structuring initiatives had been undertaken to strengthen GLL towards transforming it into a premier Asian property company with commensurate global high standards and quality. GLL has now embedded property businesses and established strong branding recognition in Singapore, China, Malaysia and Vietnam.

    GLL significantly increased its land bank in China to one million sq.m. currently in the strategic cities Beijing, Shanghai and Nanjing for signature project investments and developments aimed at making its brand name more prominent.

    GLL had in the past year acquired GuocoLand (Malaysia) Berhad ("GLM") through a mandatory general offer and successfully made it a subsidiary of GLL. With this new strategic direction, GLM will be transformed into a significant property developer in Malaysia.

    Hospitality and Leisure - BIL International Limited ("BIL")

    Through a successful corporate exercise during the year, the Company had acquired control of BIL to add its Hospitality and Leisure operations covering 10,400 Thistle hotel rooms throughout the UK as a new core business for Guoco. The BIL wholly-owned Thistle Hotels Group owns, leases and manages 49 hotels in the UK with 20 of them comprising 6,000 rooms located in London where several large Thistle hotels are landmarks in the capital. Thistle is the largest full service hotel operator in London.

    A significant milestone was attained in February this year when BIL was approved to be a licensed casinos operator under The Gaming Act 1968 by the Gambling Commission of Great Britain enabling it to own and operate casinos in selected Thistle Hotels and other sites in sixteen locations.

    Financial Services - Hong Leong Financial Group Berhad ("HLFG")

    Hong Leong Financial Group Berhad is the re-named modern entity of the former Hong Leong Credit Berhad. HLFG has embarked on various coordinated programmes to realize its vision to transform into an information technology aided, cost-effective and efficient integrated financial services provider. This revamp is now on and is progressing well.

    Hong Leong Bank Berhad ("HLB") was granted an Islamic banking licence in 2005 and had set up Hong Leong Islamic Bank Berhad. It is well positioned to tap into the fast growing global Islamic financial sector. Also, with the granting of a Takaful licence by Bank Negara, Hong Leong Assurance and HLB via a joint venture set up with Tokio Marine & Nichido Fire Insurance Co. Ltd can make further inroads into the Takaful business in Malaysia and overseas.

    - END -

    Guoco Group Limited ("Guoco") (Stock Code: 53), listed on The Stock Exchange of Hong Kong Limited, is an investment holding and investment management company with the vision of achieving long term sustainable returns for its shareholders and creating prime capital value. Guoco's operating subsidiary companies and investment activities are principally located in Hong Kong, the PRC, Singapore, Malaysia and the United Kingdom. Guoco has four core businesses, namely, Proprietary Asset Management; Property Development and Investment; Hospitality and Leisure Business; and Financial Services.

    Contacts :
    Ms. Stella Lo
    Group Company Secretary
    Tel: ( 852 ) 2283 8710
    Fax: ( 852 ) 2285 3210

    Source: Guoco Group Limited
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