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Brexit risks continue to haunt GL's hotel and casino businesses

Gwyneth Yeo
Gwyneth Yeo10/26/2016 03:57 PM GMT+08  • 2 min read
Brexit risks continue to haunt GL's hotel and casino businesses
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SINGAPORE (Oct 26): CIMB is hanging on to its “hold” call for GL Limited with the same target price of 86 cents after cutting its FY17 earnings forecast by 5% to US$44.14 million ($61.3 million) as it expects lingering Brexit risks to hurt the group’s hotel and gaming earnings.

To recap, for the 1QFY17 to Sept, GL’s earnings fell 67% to US$11 million on the back of a one-off legal provision expense of US$8.5 million. Revenue also fell 15% to US$97.8 million from translation losses for its UK businesses.

In a Wednesday note, CIMB analysts Roy Chen and William Tng say the group’s core earnings for the seasonally strong quarter still accounted for 43% of its full-year forecast. They note that core earnings in its hotels business had improved from the previous quarter as the weaker GBP boosted inbound tourism and partially mitigated the translation losses.

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