Gamehost Inc. (TSX:GH)
Management and Directors of Gamehost Inc. ("Gamehost", the
"Company", the "Corporation", "Our") are pleased to present annual
results for the three months ended March 31, 2012 (the "Period" or
"Quarter").
Batter Up
Total operating revenues for the Quarter grew by 12.5% to $18.9
million from $16.8 in the same quarter of 2011. Earnings before
interest, taxes, depreciation and amortization ("EBITDA") that is
attributable to owners of the Company ("EBITDA to Owners") grew
$1.6 million or 23.9% to $8.3 million for the Quarter compared to
$6.7 million for the same quarter in 2011. EBITDA to Owners margin
percentage ("EBITDA to Owners %") climbed by 4.1 percentage points
to 44.3% from 40.2% in the Quarter compared to one year earlier.
Batting two for two, these results follow similar results in Q4 of
last year and we hope are the beginning of a longer term trend.
Economies of Scale
With revenues passing a critical threshold we are seeing some of
the benefits of costs reductions and efficiencies made during the
past few years while we rode out the recession. Principally in our
slot business, revenue growth comes with minimal incremental cost
and explains the higher growth rate in EBTDA to Owners versus
operating revenue.
Sharing the Faith
Our common shares have traded consistently above Our debenture's
conversion strike price of $10.65 since October of 2011. As a
result, during the Quarter $2.6 million of the Company's debentures
were presented for conversion to 246,944 common shares. A further
$4.3 million in debentures have been converted subsequent to the
end of the Quarter for an additional 401,499 common shares. The
accelerated rate of conversions signals a growing faith in the
sustainability of the dividend. The Company repurchased 9,200
common shares for $106,750 under a normal course issuer bid that
commenced March 10, 2011 and expired March 9, 2012. A new bid
commenced April 12, 2012 and will expire April 11, 2013 which to
date 33,400 common shares have been repurchased for cancellation
for a total of $402,835. We will continue to exploit the issuer bid
when we believe Gamehost shares are trading below their underlying
value.
On The Road
Management recently completed a tour visiting current and
prospective shareholders in Toronto, Montreal and Vancouver. It was
an opportunity to update institutional investors on our business,
opportunities for organic growth and the economic conditions, as we
see them, for Alberta. During the tour we reinforced our commitment
to managing the Company for long term sustainability of the
dividend and potential for dividend growth when conditions and
prudence dictate. We responded to questions about growth
opportunities by acquisition saying that we regularly explore the
Canadian market for such opportunities and will continue to do so.
Opportunities to acquire gaming assets will be rare, but they do
present themselves from time to time as smaller independent
owner/operators approach retirement. At the present time there may
be greater opportunity on the hospitality side of our business
which we will focus some attention on as we move forward.
Condensed consolidated interim statement of profit and comprehensive income
In Canadian dollars (unaudited)
------------------------------
three months ended March 31
------------------------------
2012 2011
------------------------------
Operating revenue $ 18,859,337 $ 16,800,807
Cost of sales
Other (9,432,770) (9,003,010)
Depreciation (535,190) (585,359)
------------------------------
(9,967,960) (9,588,369)
------------------------------
Gross profit 8,891,377 7,212,438
Other income 57,812 50,426
Administrative expenses
Other (759,919) (813,072)
Depreciation (567,732) (653,771)
------------------------------
(1,327,651) (1,466,843)
------------------------------
Profit from operating activities 7,621,538 5,796,021
------------------------------
Finance income 22,942 18,559
Finance costs (1,940,696) (1,420,719)
------------------------------
Profit before income taxes 5,703,784 4,393,861
Income tax expense (1,515,278) 293,364
------------------------------
Profit and comprehensive income for the period $ 4,188,506 $ 4,687,225
------------------------------
Profit and comprehensive income attributable
to:
Owners of the Company $ 3,873,519 $ 4,452,113
Non-controlling interest 314,986 235,112
------------------------------
Profit and comprehensive income for the period $ 4,188,505 $ 4,687,225
------------------------------
Earnings per share
Basic and diluted earnings per share $ 0.18 $ 0.21
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.
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 unaudited interim 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 2011 annual
consolidated financial statements. Further, while the financial
figures included in this preliminary interim results announcement
have been computed in accordance with IFRS applicable to interim
periods, this announcement does not contain sufficient information
to constitute an interim financial report as that term is defined
in International Accounting Standard ("IAS") 34, "Interim Financial
Reporting". The company has published and filed an interim
financial report that complies with IAS 34 for the interim period
ended March 31, 2011. This report, along with historical financial
reports can be found on the Company's website at www.gamehost.ca
and will be filed in its 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.
Contacts: Gamehost Inc. Craig M. Thomas (877) 703-4545 (403)
340-0683 (FAX) Gamehost Inc. Darcy J. Will (877) 703-4545 (403)
340-0683 (FAX)info@gamehost.ca www.gamehost.ca
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