Gamehost Inc. (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, 2012 (the "Period") and three months ended June 30, 2012 (the
"Quarter").
Alberta Bubble?
Total operating revenues for the Quarter grew by 2.7% to $19.1 million from
$18.6 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 by $0.4 million or 4.9% to $8.6 million for the
Quarter compared to $8.2 million for the same quarter in 2011. EBITDA to Owners
margin rose by 0.7 percentage points to 46.9% from 46.2% in the Quarter compared
to one year earlier. Furthermore, results for the Quarter are the best ever for
the Company and the third consecutive quarter that we can repeat this phrase.
That's a lot of good news in a sea of bad to be read almost daily in papers
around the globe. Is it too good to last? No one can say for sure, but we don't
know of a better region of the world we'd rather be.
Float Higher
$16.9 million of the Company's $55.0 million in convertible debentures have now
converted to common shares with $8.9 million converting during the Quarter. The
Company has issued 1.6 million shares to the converted debentures based on the
$10.65/share strike price. By way of normal course issuer bid, the Company has
been repurchasing shares on points of weakness. To date the company has
repurchased and cancelled 0.7 million shares for a net increase in shares issued
and outstanding of 0.9 million shares. Shares were repurchased by the Company at
an average purchase price of $11.24/share and closed on August 2, 2012 at
$12.55/share.
Money in the Pocket
Alberta continues to boast the highest employment rates and lowest unemployment
rates in the country. All this means more Albertans with more jingle in their
pockets. This is translating into improved consumer confidence and in our case
more customers willing to spend on entertainment. We are optimistic that our
properties will continue to benefit from this environment in the months ahead.
Certainly the occupancy performance at Service Plus hotel in Grande Prairie has
been stronger than we had anticipated. This is a good indicator that energy
sector activity in the area is continuing at a healthy level. This is supported
by statistics released recently reporting unemployment rates of only 4.5% in the
city. Recent unemployment figures released for the Wood Buffalo region of
Northern Alberta of 4.6% also bode well for the continued success of our
Boomtown Casino in Fort McMurray.
Calgary has the 2nd lowest unemployment rate of all major cities in Canada. It
should be no surprise that consumers there have been freer spending of late as
well. Certainly performance at our Deerfoot Inn & Casino would support this
view. Our flagship property is a full 8% higher in year over year revenue
generation for the Period and July 2012 results at the property during the
recent 100th Anniversary of the Calgary Exhibition & Stampede were excellent.
Stop, Go or Yield?
Gamehost shares have seen strong support throughout the Quarter as new investors
continue to seek equities that provide a secure steady yield. It is our aim to
continue to be a secure and stable option for you to place your investment.
Condensed consolidated interim statement of profit and comprehensive income
In Canadian
dollars (unaudited) (unaudited)
------------------------------------------------------------
six months ended June 30 three months ended June 30
------------------------------------------------------------
2012 2011 2012 2011
------------------------------------------------------------
------------------------------------------------------------
Operating
revenue $ 37,985,550 $ 35,419,484 $ 19,126,213 $ 18,618,677
Cost of sales
Other (18,957,629) (18,362,341) (9,524,859) (9,359,331)
Depreciation (1,072,211) (1,176,642) (537,022) (591,283)
------------------------------------------------------------
(20,029,840) (19,538,983) (10,061,881) (9,950,614)
------------------------------------------------------------
Gross profit 17,955,710 15,880,501 9,064,332 8,668,063
Other income 118,460 111,383 60,648 60,958
Administrative
expenses
Other (1,492,365) (1,573,765) (732,446) (760,694)
Depreciation (1,135,464) (1,327,137) (567,732) (673,366)
------------------------------------------------------------
(2,627,829) (2,900,902) (1,300,178) (1,434,060)
------------------------------------------------------------
Profit from
operating
activities 15,446,341 13,090,982 7,824,802 7,294,961
------------------------------------------------------------
Finance income 46,269 39,380 23,327 20,822
Finance costs (1,769,946) (2,828,215) 170,750 (1,407,496)
------------------------------------------------------------
Net finance
costs (1,723,677) (2,788,835) 194,077 (1,386,674)
Profit before
income taxes 13,722,664 10,302,147 8,018,879 5,908,287
Income tax
expense (2,370,113) (1,102,892) (854,835) (1,396,256)
------------------------------------------------------------
Profit and
comprehensive
income for the
period $ 11,352,551 $ 9,199,255 $ 7,164,044 $ 4,512,031
------------------------------------------------------------
------------------------------------------------------------
Profit and
comprehensive
income
attributable
to:
Owners of the
Company $ 10,684,150 $ 8,635,079 $ 6,810,629 $ 4,182,967
Non-
controlling
interest 668,401 564,176 353,415 329,064
------------------------------------------------------------
Profit and
comprehensive
income for the
period $ 11,352,551 $ 9,199,255 $ 7,164,044 $ 4,512,031
------------------------------------------------------------
------------------------------------------------------------
Earnings per
share
Basic earnings
per share $ 0.497 $ 0.409 $ 0.313 $ 0.198
Diluted earnings
per share $ 0.451 $ 0.400 $ 0.243 $ 0.195
August Dividend
Gamehost has declared a cash dividend for the month of August 2012 of $0.0733
per common share. The dividend will be paid on September 14, 2012 to
shareholders of record on August 31, 2012. The ex- dividend date is August 29,
2012.
This dividend is considered an "Eligible Dividend" and therefore, eligible for
the enhanced gross-up and dividend tax credit available to shareholders.
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 June 30, 2012. 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.
Gamehost (TSX:GH)
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