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For immediate release14 September 2007

GUOCO GROUP LIMITED
FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2007

Guoco reports profit HK$4.27 billion

Guoco Group (Guoco Group Limited, Stock Code: 53) announced today its final results for the year ended 30 June 2007.


FINANCIAL RESULTS

The consolidated profit attributable to shareholders for the year ended 30 June 2007, after taxation and minority interests amounted to HK$4,271 million, representing a decrease of 24% over that of last year. Earnings per share amounted to HK$13.14.

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

  • total realised and unrealised gains on investments of HK$2,111 million;
  • total interest income of HK$1,571 million;
  • hospitality and leisure business of HK$370 million;
  • property operations of HK$511 million;
  • contribution from associates and jointly controlled entities of HK$421 million;
  • total net exchange gain (including forex contracts) of HK$142 million; and
  • dividend income of HK$141 million.

    Overall turnover decreased by 52% to HK$20.9 billion. The reduction was mainly attributable to the decrease in proceeds from sale of investments in securities.

    The Group's consolidated total equity (including minority interests) as at 30 June 2007 amounted to HK$48.4 billion, an increase of 9% comparing to the total equity as at 30 June 2006.

    The Group's consolidated total equity attributable to shareholders of the Company as at 30 June 2007 amounted to HK$40.5 billion, an increase of HK$3.6 billion comparing to the figure as at 30 June 2006.

    DIVIDENDS

    The Company is recommending a final dividend of HK$3.30 per share. Together with the interim dividend of HK$1.00 per share, makes a total dividend for the year amounting to HK$4.30 per share, representing an increase of 7.5% compared to that last year excluding the special dividend of HK$1.00 per share last year.

    GUOCO'S CORE BUSINESSES

    Proprietary Asset Management

    Against a backdrop of rising market uncertainty and demanding valuation, the Group had adopted a more prudent and less aggressive stance in the latter part of the financial year. Consequently, this has resulted in lower contribution from our Proprietary Asset Management compared to the previous year that was exceptional.

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

    During the financial year, GLL made significant inroads in achieving expansion and scalability in its core business. GLL now has a strong foundation for achieving growth in its embedded markets in Singapore, China, Malaysia and Vietnam. GLL had made significant acquisitions totalling 1.4 million square metres of gross floor area, including Goodwood Residence and Leedon Heights in Singapore and the iconic mega integrated development, Dongzhimen in Beijing. New land parcels were also acquired during the year to increase its landbank in Malaysia, reinforcing GLL's presence through its subsidiary, GuocoLand (Malaysia) Berhad.

    GLL has entered into a new niche area of integrated mixed development which features several components such as residential apartments, hotel, office and retail space under one roof. Each component enhances the value of other components in the development, which will in turn add to the overall connectivity and buzz of the development. These integrated developments will also induce economic stimulus to the community they are located in. Currently, GLL has four integrated developments in the pipeline: Dongzhimen in Beijing, Putuo in Shanghai, Damansara City in Kuala Lumpur and the Vietnam Singapore Industrial Park project in Ho Chi Minh City. These projects may also create synergistic business opportunities for GLL itself or other group companies, such as real estate investment trust or hotel and mall management.

    To finance GLL's expansion initiatives, the Group has given its strong support to GLL's rights issue on the basis of one rights share for every three GLL shares at S$2.50 per share. The five-year unsecured convertible bonds due in 2012 issued by GLL were also well received by major institutional investors. The rights issue and the sale of convertible bonds successfully raised S$1.24 billion.

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

    During the financial year, BIL had implemented a number of important changes to its management structure and business strategy to push forward its hospitality and leisure businesses to keep in step with global standards.

    A key initiative for the hotels operations is a detailed brand review exercise undertaken to improve the performance of our hotels thereby maximising their potential in a very competitive market. Guoman Hotels has been defined as international deluxe properties. Thistle Hotels will remain a strong United Kingdom domestic brand targeted at providing upper 4-star product and service standards. The Guoman brand now consists of six major Central London landmark hotels with over 3,300 rooms, and the Thistle brand consists of 33 properties. This transformational change has already produced improved results. The hotel business returned to profitability in 2006/07 after running at a loss in 2005/06.

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

    HLFG has achieved new milestones in its mission to become a large well-run integrated financial services group offering a comprehensive panoply of conventional and Islamic products and services to meet the financial needs of its target customers. In the international market, HLFG is aiming to have a regional presence in select emerging high growth markets.

    A number of initiatives have been undertaken to tap the synergies across various financial businesses within HLFG to allow them to leverage on the group infrastructure and distribution network. Many cooperative programmes are possible and are being implemented in the areas of products and services cross selling, wealth management, investment banking, corporate finance advisory and treasury business. Furthermore, the investment banking arm can work closely with our Group to derive synergistic benefits for our Group and our customers.

    OUTLOOK

    The core businesses are doing well with potential for further growth. The Group intends to broaden the income streams from the core businesses to be more balanced. As income from asset management is dependent on market conditions, it could on that basis be uneven.

    The Group sees challenging times ahead. With its strong balance sheet, however, it has the resources to take on new opportunities from time to time. Overall, the Group takes a cautious view of markets as the US sub-prime and other credit excesses and associated issues work their way through the global economy. However, the Group remains cautiously optimistic that the respective core businesses will benefit from the underlying strength of the economies of the respective region.

    (Please visit www.guoco.com or www.hkex.com.hk for Guoco's full final results announcement.)

    - 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, China, Singapore, Malaysia, Vietnam 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
    E-mail: stella.lo@guoco.com


    Source: Guoco Group Limited
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