Century Casino is looking to sell off their non-U.S assets, in England and Poland, to target U.S acquisitions in the near future
The third financial quarter has seen an increase in visit time per user on devices, whilst a steady paced post-coronavirus shutdown return of core customers has contributed to a positive end to the quarter. Earnings per share and revenue both rose when compared to 2019 and topped Wall Street forecasts.
Officials representing Century Casinos, which owns three hotel-casinos and a racetrack in Canada, five racetracks in the U.S, one in England and, through a subsidiary, a two-thirds stake in Casinos Poland, have indicated that the company may seek to sell off some non-U.S assets in the near future in order to target U.S. acquisitions.
On the 5th of August, Century Casinos sold the casino operations of Century Casino Calgary to 2267166 Alberta Ltd. for $7.5 million, together with a three-year quarterly earnout.
Colorado-based Century Casinos announced that its net income was $3.7 million, or 13 cents per share, for the three months ended Sept. 30. This is an increase on the net income of $482,000, or 2 cents per share, during the previous year.
Analysts, working for Seeking Alpha, had estimated that on average, 6 cents in earnings per share was expected. Additionally, adjusted earnings before interest, taxes, depreciation and amortisation has tripled to $22.2 million from $7.1 million. While Revenue rose to $95.7 million from $52.9 million which topped the forecasted $76.5 million average determined by Seeking Alpha-polled analysts.
Such a boost in revenue was directly related to the 2019 acquisitions made by Century Casino which included locations in West Virginia, New Cumberland Century in Cape Girardeau, Missouri; and Century Caruthersville in Caruthersville, Missouri, from Eldorado.
However, despite the significant and positive results, Century Casino officials warned that there will be lingering effects of the coronavirus pandemic, as the operating capacity has severely decreased in several ways.
For instance, in Cripple Creek, Colorado, the full slot floor is open in the company’s casino, but table games are expected to remain closed till the end of the year. In Central City, Colorado, the casino is operating at reduced capacity, 65% of the slot machines and table games are reopened, but craps and roulette remained closed.
Peter Hoetzinger (pictured), CEO of Century Casino outlined during a conference call with journalists and market analysts that: “We have little visibility regarding the impact the corona pandemic will have on our markets going forward,” whilst also adding; "Yet we see continued upside when the older demographics and the oftentimes more valuable feel comfortable returning to our casinos in higher numbers. We also expect some of the newer, younger customers will convert to regular visitors.”
He also advised that the company postpone non-essential capital expenditure projects, however, he stated that he hopes to return to more normalized capital spending next year where he aims to reinvest approximately 3% to 4% of net revenue.
“We are off to a very strong start after reopening,” he said, “and we make sure we stay focused on maintaining a disciplined approach throughout our business and avoiding unnecessary costs and inefficiencies. … We fully intend to keep the focus on a more efficient, higher-margin business in place after the crisis is over.”
Hoetzinger also implied that Century may look to offload more non-U.S. operations whilst investing in national operations. He further explained, during the conference call’s question-and-answer period, to Roth Capital Partners analyst David Bain that the company will most likely sell the Century Calgary’s real estate and that the company's European operations had shifted to “non-core” importance.
“You may assume that we are thinking of trying to get a good deal for these assets in Poland,” Hoetzinger continued to tell Bain “We’ve now shown that we can successfully negotiate a contract, close, and then integrate a large transaction. And so I think that makes us a good buyer for some more of these midsize assets and so yes, we are out looking already. “So, I think next year will be a very, very busy M&A situation in the U.S.”
Shares owned by Century Casinos closed at $5.46 Friday on the Nasdaq, unchanged from a day earlier. The stock price has fallen by 33.1% in 2020.
Source: CDC Gaming Reports
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