Gamehost Inc.
Wednesday, May 09, 2018 - 12:15 AM EDT

Gamehost Announces First Quarter 2018 Financial Results and May Dividend



Red Deer, Alberta (FSCwire) - Management and Directors of Gamehost Inc. (the “Company”) present results for the three months ended March 31, 2018 (the "Quarter").

 

This Quarter is now two consecutive quarters since Q4 2014 that the Company has posted improvements in top line revenue generation and EBITDA.  A general recovery in the Alberta economy can be credited with gains in revenue.  Some gain in EBITDA can be expected from economies of scale produced by increased revenues.  However, the magnitude of EBITDA gains recorded in these last two quarters are credited significantly to management scrutiny and diligence on combating inflationary headwinds on the cost front.

 

Profit attributable to shareholders for the Quarter was up $0.6 million or 15.4% to $4.5 million compared to $3.9 million in the same quarter of 2017.  Earnings per share for the Quarter was $0.18 versus $0.16 in Q1 2017.

 

Total operating revenues for the Quarter were up $1.0 million or 6.0% to $17.7 million compared to $16.7 million in the same quarter of 2017.  Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) that is attributable to shareholders of the Company ("EBITDA to Shareholders") was up $0.9 million or 14.3% to $7.2 million compared to $6.3 million in the same quarter of 2017.  EBITDA to Shareholders margin for the Quarter improved to 42.6% from 39.4% in year-over-year comparison.

 

The three geographical regions in which we operate all posted revenue gains year-over-year for the Quarter.  Each of the three segments of gaming, hotels, and food & beverage reported year-over-year revenue gains for the Quarter. 

 

Our Boomtown Casino in Fort McMurray managed some small gains after a prolonged period of negative results.  Rebuilding efforts continue in the region and displaced residents are slowly returning.  It is still early to project the long term impact of the 2016 fire and ongoing headwinds for oil-sands development on the Company operations there.

 

The Grande Prairie region continues an accelerated recovery.  Combined year-over-year growth results for Great Northern Casino and Service Plus for top line and EBITDA of 15.2% and 17.5% match similar results in the previous quarter.  The properties are nearing their highest posted historical revenue results.

 

At the Company's Calgary, Deerfoot property, management efforts to correlate spending to revenue generation is having success.  Challenging entrenched assumptions in a changed economic landscape, while uncomfortable, is proving to be a worthwhile endeavour.  Top line results for the Quarter were up 4.0%, but a 17.8% rise in EBITDA was truly impressive.

 

The Company has been active on our normal course issuer bid since the start of the year.  222,150 common shares at prices averaging $10.32 per common share have been purchased for cancellation.  We will continue to be opportunistic and prudent on this front.

 

The hard winter finally appears to have broken here in Alberta and lifted spirits are evident everywhere.  We won't let any springtime exuberance distract us from a conservative approach in all strategic and operational matters and will continue to actively manage costs to the benefit of all shareholders.

 

Gamehost Inc.

     

 

Financial Highlights

     

 

Unaudited - Canadian dollars (millions except per share figures)

 

 

   

three months ended March 31

   

2018

2017

 % Change

 
           

Operating revenue

$17.70

$16.70

6.00%

 

Cost of sales

       
 

Other

-9.3

-9.3

   
 

Depreciation

-0.5

-0.4

   
   

-9.8

-9.7

   

Gross profit

7.9

7

12.90%

 
           

Administrative expenses

       
 

Other

-0.8

-0.9

   
 

Depreciation

-0.3

-0.3

   
   

-1.1

-1.2

   

Profit from operating activities

6.8

5.8

17.20%

 
           

Net finance costs

-0.3

-0.3

   
           

Income tax expense

-1.7

-1.4

   

Profit

4.8

4.1

17.10%

 
           

Profit attributable to:

       
 

Shareholders

4.5

3.9

15.40%

 
 

Non-controlling interest

0.3

0.2

   
   

4.8

4.1

   
           

Earnings per share

       

Basic and fully diluted

$0.18

$0.16

   
           

Weighted average number of common shares outstanding

       

Basic

24.5

24.7

   

Fully diluted

24.5

24.7

   
           

EBITDA to Shareholders

$7.20

$6.30

14.30%

 

EBITDA to Shareholders %

42.60%

39.40%

   
           
         

Cash

15.7

14.6

7.50%

 

Total assets

163.9

164.1

-0.10%

 

Total debt

27.6

25.8

7.00%

 

 

Gamehost has also declared a cash dividend for the month of May 2018 of $0.0575 per common share.  The dividend will be paid on June 15, 2018 to shareholders of record on May 31, 2018.  The ex-dividend date is May 29, 2018.

 

This dividend is considered an “Eligible Dividend”, qualifying for the enhanced gross-up and dividend tax credit available to shareholders.

 

This press release may contain certain "forward-looking information" or statements within the meaning of applicable securities legislation and may contain words such as “anticipates”, “believes”, “could”, “expects”, “indicates”, “plans”, “withstand”, “further” or other similar expressions that suggest future outcomes or events.  Forward-looking information is based on the Company's current expectations, estimates, projections and assumptions that were made by the Company in light of its historical trends and other factors.  All information or statements, other than statements of historical fact, are forward-looking information including any statements that address expectations related to future economic outcomes or the Company’s dividend.  Forward-looking statements reflect reasonable assumptions made on the basis of management’s current beliefs with information known by management at the time of writing.  Many factors could cause actual results to differ from the results discussed in forward-looking statements.  Actual results may not be consistent with these forward-looking statements.

 

The Company has included non-International Financial Reporting Standards (“non-IFRS”) measures in this press release.  EBITDA to Shareholders, as defined by the Company, means earnings before interest and financing costs, income taxes, depreciation and amortization, and foreign exchange gain.  The Company believes EBITDA is a useful measure because it provides information to management and investors about the Company’s performance in generating operating cash flow to fund working capital needs, service debt obligations, fund future capital expenditures and support dividend policy.  Readers are cautioned that non-IFRS measures do not have any standardized meaning prescribed by IFRS and should not be taken as alternatives to net earnings measured in accordance with IFRS.  The Company’s method of calculating non-IFRS measures may not be comparable to similarly titled measures used by other reporting entities.  Dividend pay-out ratio, means EBITDA less all scheduled principal payments on debt, interest expense, and income tax expense.  The Company believes this measure to be useful to management and investors because it provides insight into the sustainability of the Company’s dividend.

 

Gamehost is a corporation established under the laws of the Province of Alberta.  The Company’s operations are all located in the Province of Alberta, Canada.  Operations of the Company include the Boomtown Casino in Ft. McMurray, the Great Northern Casino, Service Plus Inns & Suites hotel and a strip mall all located in Grande Prairie.  The Company also holds a 91% ownership position in Deerfoot Inn & Casino Inc. in Calgary.

 

These condensed interim consolidated financial results include the accounts of Gamehost Inc. and its subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements and should be read in conjunction with the 2017 annual consolidated financial statements. Further, while the financial figures included in this announcement have been computed in accordance with IFRS applicable to annual periods, this announcement does not contain sufficient information to constitute an interim or annual financial report. The company will file an interim financial report for the three months ended March 31, 2018.  This report will be filed in its entirety, along with historical financial reports on the Company’s website at www.gamehost.ca and on SEDAR at www.sedar.com along with the Company’s other continuous disclosure documents, when they are available.

 

Gamehost common shares trade on the Toronto Stock Exchange (TSX) under the symbol GH.  For more information, contact:

 

Craig M. Thomas or Darcy J. Will

P (877) 703-4545

F (403) 340-0683

E info@gamehost.ca







Source: Gamehost Inc. (TSX:GH, OTC Pink:GHIFF)

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