Gaming and Leisure Properties Inc. (GLPI) reported record revenue for the first quarter of its 2022 financial year, while the business also experienced a year-on-year rise in net profit.
The quarter proved to be a busy period for GLPI, having in January finalized its acquisition of Bally’s Tiverton in Rhode Island and the Hard Rock Hotel & Casino Biloxi in Mississippi from Bally’s Corporation for $635.0m.
Also in Q1, GLPI completed the creation of a new master lease with Penn Entertainment, covering seven of the latter’s properties. Penn’s casinos in properties in Aurora and Joliet in Illinois, as well as Columbus and Toledo in Ohio, and Henderson, Nevada were added to the new master lease.
In addition, the existing leases for the Hollywood Casino at the Meadows in Pennsylvania and Hollywood Casino Perryville in Maryland were terminated and transferred to the 2023 master lease.
GLPI chairman and chief executive Peter Carlino said this formed part of an ongoing strategy to expand and diversify the business, with this approach having helped drive growth during Q1.
“Our record first quarter financial results further highlight and reinforce the value of our long-term strategy to expand and diversify our portfolio of regional gaming assets, align with the industry’s top regional gaming operators, and support our tenants with innovative structures in an accretive, prudent manner,” Carlino said.
“This approach has driven predictable growth of our rental cash flows and adjusted funds from operators, enabling GLPI to increase its capital returns to shareholders through increased cash dividends.”
Results
Revenue in the three months to March 31 reached $355.2m, a record-high for the business and a 12.8% increase from $315.0m in the corresponding period last year.
Rental income accounted for $318.0m of all revenue during the quarter, while the remaining $37.2m came from interest income from investment in leases and financing receivables.
Looking at costs, operating expenses were 23.3% lower year-on-year at $88.4m. This was mainly due to GLPI last year having made a $26.7m provision for net credit losses, while in the first quarter of this year, it received $5.7m in benefits.
Other, finance-related costs were marginally down to $77.7m, which in turn left the group with a pre-tax profit of $189.2m, up 55.2% from $121.9m in Q1 of 2022.
GLPI paid $518,000 in income tax and also noted $5.3m in net profit attributable to its non-controlling interest in an operating partnership.
As such, net profit attributable to GLPI in Q1 stood at $183.4m, up 56.2% year-on-year. In addition, adjusted earnings before interest, tax, depreciation and amortisation( EBITDA) was 10.2% higher at $323.1m.
“Looking forward to the balance of 2023, GLPI is on track to generate record results based on the ongoing expansion and diversification of our portfolio as well as the upside from recently completed transactions and contractual rent escalators,” Carlino said.
“Our disciplined capital investment approach, combined with our focus on stable regional gaming markets, supports our confidence that the company is well positioned to further grow our cash dividend and drive long-term shareholder value.”