Gamehost Inc. ('Gamehost', the 'Company') (TSX:GH)
Management and Directors of Gamehost Inc. ("Gamehost", the "Company", the
"Corporation", "Our") are pleased to present results for the six months ended
June 30, 2011 (the "Period") and three months ended June 30, 2011 (the
"Quarter").
Total revenues rose 17% to $18.6 million for the Quarter from $15.9 million one
year earlier. Earnings before interest, taxes, depreciation and amortization
("EBITDA") that is attributable to owners of the Company rose 29% or $1.8
million to $8.2 million for the Quarter compared to $6.4 million for the same
quarter in 2010. The acquisition of an additional 51% ownership position in the
Deerfoot Inn & Casino Inc. joint venture ("Deerfoot") in April 2010 (the
"Acquisition") has provided a substantial boost to comparable revenues and
earnings. The Company's next quarter will be the first to compare a full three
months of the additional Deerfoot contribution in prior year figures. EBITDA
margin percentage rose by 5.6 percentage points to 46.3% for the Quarter versus
40.7% for the year earlier quarter. A one time adjustment to liabilities for
outstanding TITO tickets and an adjustment to AGLC's formula for handing GST
liabilities boosted the EBITDA margin for the Quarter.
We have been quietly going about our business of operating the most cost
efficient enterprise possible during a time of significant uncertainly.
Headline stories about the European debt crisis and an unthinkable reduction in
the USA's credit worthiness foster uneasiness with the Alberta consumer in a
still fragile economic recovery. Still, the consumer needs an opportunity for
affordable enjoyment which we continue to offer day in and day out.
Since the end of Q3 2009 we have experienced a steady but modest trend in
improved traffic and spending by both the corporate and retail consumer. We are
optimistic that his trend can continue barring any new and unforeseen global
turmoil.
During the Quarter we embarked on a number of refurbishing projects to maintain
the appearance and comfort of our properties at the highest level. These types
of highly visible improvements go a long way to improving the confidence of our
customers and encourage return visits.
Investors received regular dividends thoughout the Quarter while we were able to
meet all of our debt service obligations and continue to build a surplus of
cash.
We are optimistic about our current business and future opportunities.
Management continues to explore options for growth that fit with our risk
profile and that can add to our earnings.
Condensed consolidated interim statement of comprehensive income
In Canadian dollars (unaudited) (unaudited)
----------------------------------------------------
six months ended three months ended
June 30 June 30
----------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------
Continuing operations
Operating revenue
Operating revenue 35,419,484 27,344,732 18,618,677 15,911,264
Cost of sales - other (18,362,341) (13,563,466) (9,359,331) (8,109,309)
Cost of sales -
amortization,
depreciation (1,176,642) (957,268) (591,283) (555,488)
----------------------------------------------------
Cost of sales (19,538,983) (14,520,734) (9,950,614) (8,664,797)
----------------------------------------------------
Gross profit (loss) 15,880,501 12,823,998 8,668,063 7,246,467
Other income 111,383 120,142 60,958 63,902
Administrative expenses
- other (1,573,765) (1,901,804) (760,694) (1,317,813)
Administrative expenses
- amortization,
depreciation (1,327,137) (34,462) (673,366) (10,553)
----------------------------------------------------
Administrative expenses (2,900,902) (1,936,266) (1,434,060) (1,328,366)
Gain(loss) on
revaluation of assets - 27,083,015 - 27,083,015
----------------------------------------------------
Profit (Loss) from
operating activities 13,090,982 38,090,889 7,294,961 33,065,018
----------------------------------------------------
Finance income 39,380 24,855 20,822 23,268
Finance costs (2,828,215) (5,548,027) (1,407,496) (3,275,026)
Fair value changes to
Class B limited
partnership units - (6,720,768) - (1,213,472)
----------------------------------------------------
Net finance costs (2,788,835) (12,243,940) (1,386,674) (4,465,230)
----------------------------------------------------
Profit (Loss) before
income tax 10,302,147 25,846,949 5,908,287 28,599,788
Deferred tax (expense)
recovery (1,102,892) 3,413 (1,396,256) 36,534
----------------------------------------------------
Total comprehensive
income (loss) for the
period 9,199,255 25,850,362 4,512,031 28,636,322
Total comprehensive
income (loss)
attributable to:
Owners of the Company 8,635,080 25,665,937 4,182,966 28,451,897
Non-controlling
interests 564,176 184,425 329,064 184,425
----------------------------------------------------
Total comprehensive
income (loss) for the
period 9,199,256 25,850,362 4,512,030 28,636,322
----------------------------------------------------
----------------------------------------------------
Earnings per share
Basic earnings per share
(CAD) 0.409 1.216 0.198 1.348
Diluted earnings per
share (CAD) 0.400 1.144 0.195 1.159
Gamehost has declared a cash dividend for the month of August 2011 of $0.0733
per common share. The dividend will be paid on September 15, 2011 to
shareholders of record on August 31, 2011. The ex-dividend date is August 29,
2011.
This dividend is considered an "Eligible Dividend" in accordance with Bill C-28
and, therefore, eligible for the enhanced gross-up and dividend tax credit
available to shareholders.
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.
This press release may contain forward-looking statements. Forward-looking
statements may contain words such as "anticipates", "believes", "could",
"expects", "indicates", "plans" or other similar expressions that suggest future
outcomes or events. Use of these 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.
This press release is not a suitable source of information for readers who are
unfamiliar with the Gamehost. Readers more familiar with the Company should not
consider this press release a substitute for reading the financial statements
and MD&A. Consolidated financial statements and MD&A, both current and
historical, are available on the Company's website at www.gamehost.ca and will
be filed in their entirety along with the Company's other continuous disclosure
documents, when they are available, on SEDAR at www.sedar.com.
Gamehost common shares and convertible debentures trade on the Toronto Stock
Exchange (TSX) under the symbols GH and GH.DB respectively.
Gamehost (TSX:GH)
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