Mr. Rod Baker reports
GREAT CANADIAN GAMING ANNOUNCES 2011 SECOND QUARTER RESULTS
Great Canadian Gaming Corp. has provided its financial results for the three-month period ended June 30, 2011.
Two thousand eleven second quarter highlights (amounts presented in millions of dollars, except for per share information):
- EBITDA (earnings before interest, tax, depreciation and amortization) growth of 8 per cent on 3-per-cent revenues increase;
- Shareholders' net earnings of $10.3-million, a 2-per-cent increase from the
second quarter of 2010;
- Acquisition of Chilliwack Bingo for $10.2-million plus contingent
trailing payments.
Second quarter First half
2011 2010 2011 2010
Revenues $ 99.5 $ 97.0 $191.5 $190.0
EBITDA (1) $ 37.8 $ 35.0 $ 69.3 $ 66.4
EBITDA as a % of revenues 38.0% 36.1% 36.2% 34.9%
Shareholders' net earnings (2) $ 10.3 $ 10.1 $ 16.0 $ 15.2
Shareholders' net earnings per common share
Basic $ 0.12 $ 0.12 $ 0.19 $ 0.18
Diluted $ 0.12 $ 0.12 $ 0.19 $ 0.18
(1) EBITDA is a non-IFRS (international financial reporting standard) measure.
(2) Shareholders' net earnings increased by $200,000 in the second quarter and
by $800,000 in the first half of 2011 when compared with the second quarter and
first half of 2010. These increases were primarily due to improvements in EBITDA
and decreases in other expenses, which were partially offset by increases in
amortization, stock-based compensation and income taxes.
For the second quarter of 2011, Great Canadian Gaming recorded revenues of $99.5-million, a $2.5-million increase from the
second quarter of 2010. EBITDA was $37.8-million, a $2.8-million
increase from the second quarter of 2010.
The growth in revenues was primarily due to increases at the River Rock
Casino Resort, the other British Columbia casinos and the Great
American casinos. River Rock's quarterly revenues increased by $3.7-million, primarily due to a 19-per-cent improvement in table drop. The other B.C.
casinos' quarterly revenues increased by $1.1-million, primarily due to
the installation of 100 slot machines at the Maple Ridge Community
Gaming Centre in October, 2010. The Great American casinos' quarterly
revenues increased by $800,000, due both to a 13-per-cent improvement in
table drop and the effect of a below-average table hold percentage in
the second quarter of 2010.
The advancements at River Rock, the other B.C. casinos and the Great
American casinos were partially offset by decreased revenues at both
the Boulevard Casino and the B.C. Racinos. Boulevard's
quarterly revenues decreased by $2-million, primarily due to
disruption caused by construction on provincial highway enhancements
adjacent to that facility as well as proximate competition, including
the company's Maple Ridge Community Gaming Centre. Quarterly revenues
at the B.C. Racinos decreased by $1.1-million, primarily due to the
continuing industry-wide decline in horse race wagering.
EBITDA as a percentage of revenues for the second quarter of 2011 was
38 per cent, a 1.9-percentage-point increase from the second quarter of 2010,
primarily due to the above-noted revenue increases, as well as the
benefit of efficiency initiatives implemented across the company's
property portfolio.
On May 31, 2011, the company purchased the assets and undertaking of the
Chilliwack Bingo Association (CBA) for upfront cash consideration of
$10.2-million. The CBA operated Chilliwack Bingo, a bingo hall located
in Chilliwack, B.C. This leased facility generated the
greatest bingo revenues in British Columbia during the 2009 to 2010 fiscal
year, and recorded $900,000 of EBITDA during the CBA's 2010 to 2011
fiscal year. The CBA also owned an approximately five-acre site in
Chilliwack. The company intends to use this site for the
development of a community gaming centre. The agreement between the
company and the CBA also includes contingent trailing payments to be
paid over 20 years dependent on the level of future slot win generated
by a future community gaming centre. The company estimates it will
spend approximately $15-million to build the community gaming centre,
which should reach completion by the first quarter of 2013.
"Great Canadian's financial results for the second quarter of 2011 are
an improvement over 2010," stated Ross J. McLeod, Great Canadian's
chairman and chief executive officer. "While we are witnessing notable
increases in gaming volumes at River Rock, revenues at the majority of
our properties are still well below those achieved prior to the
economic collapse of 2009. Boulevard Casino continues to experience
significant gaming revenue pressure as a result of external factors,
while the B.C. Racinos continue to experience a decline in racing
revenues.
"While improving the results at Boulevard and the B.C. Racinos remain
priorities, Great Canadian also continues to focus on further improving
those segments of our property portfolio that are displaying the
potential for growth. In November of 2010, we announced the development
of a third hotel tower at River Rock. This tower, which will nearly
double the facility's hotel capacity, will both considerably enhance
River Rock's appeal for future visitors and augment its ability to
serve as a conference and convention destination. Construction at River
Rock has created minimal disruption for its patrons to date and is
well on its way to reach completion during the fourth quarter of this
year. I am confident that the addition of a third tower will contribute
to further growth at our flagship facility.
"Great Canadian's community gaming centres have proven themselves as a
source of growth in this otherwise consistent environment. While our
success at Maple Ridge is partly driven by Boulevard gaming patrons
displaced by the construction adjacent to that property, our temporary
gaming offerings in Maple Ridge have been well received and that market
continues to develop. We are also pleased to welcome Chilliwack Bingo
to the Great Canadian family and are looking forward to developing a
community gaming centre in that growing and underserviced market."
Mr. McLeod concluded: "Investments in the development of our properties
will be a critical factor in our properties' long-term revenue
growth. This growth remains Great Canadian's best opportunity for
improving stakeholder value."
Great Canadian will host a conference call for investors and analysts
today, Aug. 11, 2011, at 2 p.m. Pacific Time, to review the financial
results for the period ended June 30, 2011. To participate in the
conference call, please dial 647-427-7450, or toll-free at
888-231-8191. Questions will be reserved for institutional investors
and analysts. Interested parties may also access the call on the
Internet; please allow 15 minutes to register and install any necessary
software. A replay of the call will also be available on the company website.
CONSOLIDATED RESULTS OF OPERATIONS
(Expressed in millions of Canadian dollars, except for per share information)
Second Quarter
2011 2010
Gaming revenues $ 72.3 $ 69.0
Facility development commission 7.9 7.5
Hospitality and other revenues 17.9 17.0
Racetrack revenues 5.3 6.3
103.4 99.8
Less: Promotional allowances (3.9) (2.8)
Revenues 99.5 97.0
Human resources 38.9 39.1
Property, marketing and administration 22.8 22.9
61.7 62.0
EBITDA 37.8 35.0
Human resources as a % of revenues
before promotional allowances 37.6% 39.2%
EBITDA as a % of revenues 38.0% 36.1%
Amortization 14.6 13.6
Stock-based compensation 1.7 0.9
Restructuring and other 0.1 -
Interest and financing costs, net 7.2 7.1
Other expenses (0.2) 0.3
Income taxes 4.1 3.0
Shareholders' net earnings $ 10.3 $ 10.1
Shareholders' net earnings per common share
Basic $ 0.12 $ 0.12
Diluted $ 0.12 $ 0.12
First half
2011 2010
Gaming revenues $ 139.8 $ 135.5
Facility development commission 15.5 14.7
Hospitality and other revenues 33.6 32.9
Racetrack revenues 9.8 12.5
198.7 195.6
Less: promotional allowances (7.2) (5.6)
Revenues 191.5 190.0
Human resources 76.3 76.7
Property, marketing and administration 45.9 46.9
122.2 123.6
EBITDA 69.3 66.4
Human resources as a % of revenues
before promotional allowances 38.4% 39.2%
EBITDA as a % of revenues 36.2% 34.9%
Amortization 29.0 27.1
Stock-based compensation 3.4 3.2
Restructuring and other 0.4 0.1
Interest and financing costs, net 13.9 14.1
Other expenses (0.2) 0.5
Income taxes 6.8 6.2
Shareholders' net earnings $ 16.0 $ 15.2
Shareholders' net earnings per common share
Basic $ 0.19 $ 0.18
Diluted $ 0.19 $ 0.18
We seek Safe Harbor.
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