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Enter Symbol
or Name
USA
CA



Great Canadian Gaming Corp
Symbol GC
Shares Issued 61,466,930
Close 2017-03-07 C$ 23.03
Market Cap C$ 1,415,583,398
Recent Sedar Documents

Great Canadian Gaming earns $75.7-million in 2016

2017-03-07 16:15 ET - News Release

Mr. Rod Baker reports

GREAT CANADIAN GAMING ANNOUNCES FOURTH QUARTER AND ANNUAL 2016 RESULTS; 2016 ADJUSTED EBITDA INCREASED 16% TO $209 MILLION. 1% INCREASE IN 2016 SHAREHOLDERS' NET EARNINGS

Great Canadian Gaming Corp. today released its financial results for the three-month period and 12-month period ended Dec. 31, 2016.

Fourth quarter and 2016 highlights:

  • Great Canadian generated revenues of $566-million for the full year and $143-million in the fourth quarter, increases of 22 per cent and 15 per cent, respectively, when compared with the same periods in the prior year;
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $209-million for the full year and $47-million for the fourth quarter, increases of 16 per cent and 5 per cent, respectively, when compared with the same periods in the prior year;
  • 2016 shareholders' net earnings of $76-million, a 1-per-cent increase from the prior year; fourth quarter shareholders' net earnings, $16-million, declined 11 per cent compared with the fourth quarter 2015; amortization of $55-million for the full year and $14-million for the fourth quarter, increases of $15-million and $2-million, respectively, when compared with the same periods in the prior year;
  • Shareholders' basic net earnings per share of $1.22 for the full year and 26 cents for the fourth quarter, an increase of 12 cents and a decrease of one cent, respectively, when compared with the same periods in 2015.

2017 major developments:

  • Opening of Shorelines Casino in Belleville, Ont., on Jan. 11, 2017, exactly one year after Great Canadian acquired the Ontario Lottery and Gaming Corp.'s east gaming bundle; Shorelines Casino Belleville is the first such property opened in Ontario since 2006;
  • The company submitted a bid on the request for proposal for Ontario Lottery and Gaming's gaming bundle 1 (Ottawa) in February, 2017.

Great Canadian generated revenues of $566-million during 2016, a 22-per-cent increase when compared with 2015, primarily due to the addition of revenues from the two Shorelines Casinos that the company acquired from the OLG in January, 2016, together with an additional nine months of results from Casino New Brunswick, which was acquired on Oct. 1, 2015. Revenues from the other properties increased $20-million in aggregate across property groups but was offset by a $19-million decline in River Rock Casino Resort's revenue. River Rock continued to experience reduced high-limit table play.

Fourth quarter revenue increased by 15 per cent to $143-million, compared with the corresponding quarter in the previous year. The majority of Great Canadian's property groups generated increased revenue in the fourth quarter when compared with the prior year; however, these gains were fully offset by a decline in River Rock's revenue, resulting in the company's fourth quarter growth being attributed wholly to the revenues from the acquired Shorelines Casinos. River Rock grew table drop, but table hold was impacted by a notably low table hold percentage in the quarter when compared with the same period in the prior year. Late in third quarter of 2015, the B.C. Lottery Corp. introduced conditions for players to demonstrate the source of their proceeds, and this change resulted in lower buy-ins, reduced average bets and shorter durations of play. These dynamics led to the average hold rate declining from 20 per cent in 2015 to 17 per cent in 2016.

Driven by the aforementioned acquisitions, the company achieved a 16-per-cent increase in full-year adjusted EBITDA to $209-million. Adjusted EBITDA grew at all of the company's property groups, with the exception of River Rock.

Adjusted EBITDA during the fourth quarter was $47-million, an increase of 5 per cent when compared with the same period in the prior year. The increase resulted from the acquired Shorelines Casinos as well as improvements in adjusted EBITDA at the majority of the company's properties, with the exception of River Rock.

The company's 2016 shareholders' net earnings increased 1 per cent to $76-million. The 16-per-cent improvement in adjusted EBITDA was offset by increased amortization and financing costs from the acquisitions and higher share-based compensation. Fourth quarter shareholders' net earnings decreased to $16-million as the 5-per-cent improvement in adjusted EBITDA was insufficient to offset the increased amortization.

Shareholders' net earnings per share of $1.22 during 2016 increased by 12 cents when compared with 2015. Two cents of this increase are due to higher shareholders' net earnings, and the remaining 10 cents is due to a lower average number of shares outstanding during 2016 following the company's repurchase of 5.5 million common shares during 2015 and 4.8 million common shares during 2016.

"Great Canadian generated increases in revenues of 22 per cent for the full year and 15 per cent for the quarter when compared to the same period in the prior year," stated Rod Baker, the company's president and chief executive officer. "Both the full year and fourth quarter reflect the contributions from Shorelines Casino Thousand Islands and Shorelines Slots at Kawartha Downs. Additionally, 2016 includes a full year of revenues from Casino New Brunswick compared to just three months of results in the prior year. Great Canadian generated notable improvements to both revenues and adjusted EBITDA during the fourth quarter and full year of 2016 at all of its property groups, with the exception of River Rock. This property has experienced challenges in its high-limit table play since the third quarter of 2015. In the most recent quarter, table drop increased by 5 per cent when compared to the fourth quarter of 2015; however, the table hold percentage decreased by 5.4 percentage points, resulting in a 24-per-cent decrease in table hold. The slots side of the business at River Rock continued to trend positively, with a 2-per-cent increase in slot win during the fourth quarter when compared to the same period in the prior year.

"In Ontario, we are extremely pleased to have opened our newest property, Shorelines Casino Belleville, on the first anniversary of Great Canadian's acquisition of the east gaming bundle from OLG. This casino is the first gaming facility to open in Ontario in over 10 years and marks Great Canadian's 21st property.

"The pace of Ontario's gaming modernization is increasing. On Feb. 9, 2017, the company submitted its bid on OLG's request for proposal for gaming bundle 1 (Ottawa). In addition, the company is currently assessing OLG's requests for proposals for gaming bundle 5 (GTA [Greater Toronto Area]), which is due April 20, 2017, and gaming bundle 6 (west GTA), which is due July 13, 2017. We anticipate OLG to announce the successful proponents for these three bundles in the spring, late summer and fall of 2017, respectively. We anticipate the bidding process for these bundles will be competitive, and there is no certainty that the company will be selected for additional bundles.

"Our business continued its solid performance and maintained a robust financial position. Two thousand sixteen cash generated from operations of $178-million increased by 30 per cent when compared with 2015, closing 2016 with $229-million of cash and cash equivalents, a 10-per-cent increase when compared with the end of 2015. At the end of 2016, the company had available an undrawn senior secured revolving credit facility of $323-million, net of outstanding letters of credit. Given our strong financial position, the company is ready to take on new growth opportunities in Ontario and elsewhere," concluded Mr. Baker.

Great Canadian will host a conference call for investors and analysts today, March 7, 2017, at 2 p.m. Pacific Time in order to review the financial results for the quarter and year ended Dec. 31, 2016. To participate in the conference call, please dial 416-764-8609, 778-383-7417 or toll-free at 1-888-390-0605. Questions will be reserved for institutional investors and analysts. Interested parties may also access the call through the investor relations section of the company's website. Investors using the website should allow 15 minutes for the registration and installation of any necessary software. A replay of the call will also be available on the company's website.

About Great Canadian Gaming Corp.

Great Canadian Gaming is a Canadian-based company that operates gaming, entertainment and hospitality facilities in British Columbia, Ontario, New Brunswick, Nova Scotia and Washington State. The company has 21 gaming properties, which consist of 13 casinos, including a four-diamond resort hotel in Richmond, B.C., a four-star hotel in Moncton, N.B., four horse racetrack casinos, three community gaming centres and one commercial bingo hall.

Please refer to the consolidated financial statements and management's discussion and analysis (on the company's website (available on March 7, 2017) or on SEDAR (available on March 8, 2017) for detailed financial information and analysis.

                                                                              
                      FINANCIAL HIGHLIGHTS AND ADJUSTED SHAREHOLDERS NET EARNINGS                                                       
                      (in millions of dollars, except for per-share information)                          
                                                                                                                   
                                                Three months ended Dec. 31,    12 months ended Dec. 31,       
                                                        2016          2015          2016          2015

Revenues                                              $143.0        $124.7        $566.4        $462.9
Human resources                                         51.1          43.3         202.4         165.0
Property, marketing and administration                  45.3          36.9         157.7         119.8
Share of profit of equity investment                    (0.6)         (0.6)         (2.6)         (2.5)
                                                       -----         -----         -----         -----
                                                        95.8          79.6         357.5         282.3
                                                       -----         -----         -----         -----
Adjusted EBITDA                                        $47.2         $45.1        $208.9        $180.6
                                                       -----         -----         -----         -----
Adjusted EBITDA as a % of revenues                     33.0%         36.2%         36.9%         39.0%
Less
Amortization                                            13.6          11.2          54.7          40.1
Share-based compensation                                 1.6           0.6           6.7           4.3
Interest and financing costs, net                        8.6           7.8          34.9          31.6
Business acquisition, restructuring and other            2.2           2.1           7.3           6.9
Foreign exchange gain and other                        (0.5)         (0.7)         (0.3)         (4.6)
Income taxes                                             6.2           6.6          29.0          27.8
Non-controlling interests                              (0.1)         (0.1)           0.9         (0.1)
                                                       -----         -----         -----         -----
Shareholders' net earnings                             $15.6         $17.6         $75.7         $74.6
                                                       =====         =====         =====         =====
Shareholders' net earnings per common share
Basic                                                  $0.26         $0.27         $1.22         $1.10
Diluted                                                $0.25         $0.26         $1.20         $1.08

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