Good quarter
Gamehost Announces First Quarter Financial Results and Dividend for May
2023-05-09 17:03 ET - News Release
Not intended for distribution to U.S. newswire services or for dissemination in the U.S.
RED DEER, AB / ACCESSWIRE / May 9, 2023 / Gamehost Inc. (TSX:GH)
Management and Directors of Gamehost Inc. (the "Company") present results for the three months ended March 31, 2023 (the "Quarter").
The Quarter is the fourth consecutive quarter of operations without COVID-19 restrictions of any kind. Results in the Quarter are compared with both the comparable prior year quarter and (pre-COVID-19 quarter in 2019). Operating revenue was $19,838.6 thousand versus $14,942.4 thousand ($17,022.5 thousand - 2019), EBITDA to Owners was $8,022.6 thousand versus $4,528.8 thousand ($6,258.6 thousand - 2019), and Earnings per share for the Quarter was $0.21 versus $0.09 ($0.14 - 2019). The Company performed well above expectation for the Quarter on both top and bottom lines.
Capital investments made during and following the pandemic are delivering solid returns. The extensive expansions and renovations to all of our properties should result in minimal capital maintenance requirements for the Company in the medium term.
After funding the Company's regular monthly dividend, the Company continued prioritizing the use of capital resources for repurchasing shares while market prices remain below management's assessment of their underlying value. Under the current normal course issuer bid ("NCIB"), the Company has repurchased 666,356 common shares, 60% of the allowable maximum, at prices averaging $8.12 per common share excluding broker commissions for an aggregate $5,413.8 thousand. The NCIB expires in July 2023. Surplus cash, beyond dividend, NCIB and working capital requirements, was applied to revolving variable rate debt. Management believes these priorities for capital to be low risk, high return uses for excess cash.
The Company previously announced that the province's gaming regulator, AGLC, will increase the operator's share of slot commissions from 15% to 17% effective April 1, 2023. AGLC has stated the commission increase will be temporary for a period of two years. Slot operators are expected to reinvest in their facilities and/or in promotional activities that measurably support slot play. AGLC and provincial operators are collectively working out qualifying criterial and reporting requirements for the added commission. The Company is hopeful the increase will become permanent following evaluation of the temporary increase period.
During the Quarter, Deerfoot Inn & Casino hosted a third successful World Series of Poker Circuit ("WSOP-C") event. Deerfoot first hosted a WSOP-C event in January 2022 and built the biggest main event poker prize pool in Alberta history. Prize pools for these events have grown with each successive event held. Deerfoot will host a fourth WSOP-C event in May 2023. The Company hopes to build on our Deerfoot's early success and ideal suitability for such events in Calgary.
Inflation and the lagging impact of higher interest rates remain front burner risks to the Company's business. Management has taken steps to mitigate these risks. Capital allocation priorities allow for accelerated reduction in the Company's variable rate debt. Greater monitoring and forward contracting of major operational costs are already producing benefits.
Despite the overhang of inflation and interest rates, we like the look and feel of Alberta right now. Roadways are busy and the province is attracting a growing population. The Alberta Activity Index ("AAX"), data developed by the Alberta Treasury Board and Finance, tracks nine key indicators of economic activity (employment, average weekly earnings, retail trade, wholesale trade, manufacturing, new truck sales, housing starts, rigs drilling and oil production). The latest AAX data for January 2023 indicates Alberta economic activity at a historical high. So, this feeling we have, its not imagined. Its real!
Gamehost Inc.
Financial Highlights
Unaudited - Canadian dollars (thousands except per share figures)
| | | three months ended March 31 | |
| | | 2023 | | | 2022 | |
| | | | | | | |
| Operating revenue | | $ | 19,838.6 | | | $ | 14,942.4 | |
| Cost of sales | | | | | | | | |
| Other | | | (10,897.8 | ) | | | (8,903.6 | ) |
| Depreciation | | | (829.5 | ) | | | (934.0 | ) |
| | | | (11,727.3 | ) | | | (9,837.6 | ) |
| Gross profit | | | 8,111.3 | | | | 5,104.8 | |
| | | | | | | | | |
| Lease and other income | | | 42.8 | | | | (462.1 | ) |
| | | | | | | | | |
| Administrative expenses | | | | | | | | |
| Other | | | (1,042.5 | ) | | | (827.4 | ) |
| Depreciation | | | (231.6 | ) | | | (244.9 | ) |
| | | | (1,274.1 | ) | | | (1,072.3 | ) |
| Profit from operating activities | | | 6,880.0 | | | | 3,570.4 | |
| | | | | | | | | |
| Net finance costs | | | (768.5 | ) | | | (440.8 | ) |
| Profit (loss) before income tax | | | 6,111.5 | | | | 3,129.6 | |
| | | | | | | | | |
| Income tax (expense) recovery | | | (1,564.5 | ) | | | (979.4 | ) |
| Profit | | | 4,547.0 | | | | 2,150.2 | |
| | | | | | | | | |
| Profit attributable to: | | | | | | | | |
| Shareholders | | | 4,547.0 | | | | 1,973.2 | |
| Non-controlling interest | | | - | | | | 177.0 | |
| | | | 4,547.0 | | | | 2,150.2 | |
| | | | | | | | | |
| Earnings per share | | | | | | | | |
| Basic and fully diluted | | $ | 0.21 | | | $ | 0.09 | |
| | | | | | | | | |
| Weighted average number of common shares outstanding | | | | | | | | |
| Basic and fully diluted (x 000) | | | 22,161.1 | | | | 22,651.8 | |
| | | | | | | | | |
| EBITDA | | $ | 8,022.6 | | | $ | 4,759.7 | |
| EBITDA % | | | 40.2 | % | | | 32.8 | % |
| | | | | | | | | |
| | | March 31, 2023 | | | December 31, 2022 | |
| Cash | | | 16,597.0 | | | | 15,614.5 | |
| Total assets | | | 182,748.8 | | | | 183,409.5 | |
| Total debt | | | 53,935.0 | | | | 54,502.2 | |
Gamehost has declared a cash dividend for the month of May 2023 of $0.03 (CDN) per common share, which equates to $0.36 (CDN) per common share on an annualized basis. The dividend will be paid on June 15, 2023 to shareholders of record on May 31, 2023. This dividend is considered an "Eligible Dividend" and therefore, eligible for the enhanced gross-up and dividend tax credit available to Canadian shareholders.