3Q14 results highlights 
Slight loss but the strongest 3Q in three years. In line with seasonality, GLL posted a slight loss of US$0.3m in 3Q14 (3Q13: US$6.4m loss). However, we note that it was the best 3Q results in the past three years. The strong revenue growth of 23.1% in 3Q14 was mainly attributable to the higher hotel income, which benefited from the strengthening dynamics of the UK hospitality sector and expanding RevPAR. Bass Strait oil and gas royalties decreased by 11% to US$9.0m in 3Q14 (3Q13: US$10.1m) due to the combined effects of the lower average crude oil prices and the depreciation of the A$ against the US$.

What we think 
Read the results favourably. The negative impact on topline from the planned refurbishment work at its London hotels was mitigated by the favourable hospitality outlook and rate gains for the refurbished rooms returning to room inventory. Management stated that, " Early indications of forward-booked business into newly-refurbished stock is meeting expectation" .

Significant interest savings in 2HFY15. Given the expiry of the 10.75% debentures at end-2014 and our refinancing cost estimate of 5.0-5.5%, the company could make interest savings of US$12.7m p.a. (21% of FY13 PBT).

Reiterate Add 
Given its plethora of catalysts ahead, the company currently trades at a heavy 45% discount to RNAV and 13% discount to book value. Our target price of S$1.22 is based on a 30% discount to CY14 RNAV.