GuocoLeisure chairman ramps up stake in latest buying spree

This is a positive sign, say analysts.

GuocoLeisure’s major shareholder, non-executive board member and former executive chairman Quek Leng Chan scooped up 132,600 shares of GuocoLeisure yesterday, paying SGD0.95/share and raising his overall stake in the company to 66.7%.

According to RHB, the purchase is a positive signal and comes after as this is the first time Quek is buying stock in GLL after the last buying spree in 2012 when he scooped up millions of stock from 60-69.5 cents range.

“We remain positive on the stock and believe that the stock can narrow its discount with its SOTP valuation as its hotel transformation drive forward earnings growth,” stated RHB.

Here’s more from RHB:

Since that time, GLL has appointed a new CEO, Mike Denoma, and embarked on a transformation of its hotel business, including a major retrofit of key hotels and a re-branding exercise.

While the transformation is still a work in progress, re-launched and retrofitted hotels such as the Charing Cross and Piccadilly has seen sharp improvement in Tripadvisor’s London hotel rankings, moving to 4th position and 50th position respectively.

The current year will see completion of renovation of the 692-room Marble Arch. Meanwhile, GLL is exploring options for the Tower London, whether to re-develop the property into a mixed project or go ahead with retrofitting the hotel.

We expect the benefits of the AEI exercise to flow through in the course of the next 2 years from improved rates and occupancy. Separately, the refinancing of its legacy £138m, 10.75% mortgage debentures since end 2014 has resulted in a sharp 68% decline in 3QFY15 financing cost to USD2.6m.