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Full House expects Q4 earnings growth despite revenue dip


Full House Resorts expects revenue for the fourth quarter of 2020 fall year-on-year, though earnings are set to grow significantly, as it prepares to significantly expand its planned renovation of its Colorado property. 

The operator expects revenue for the three months to 31 December 2020 to fall between $37.8m and $38.5m. This suggests a decline of up to 3.1% from the fourth quarter of 2019.

Operating profit, however, is expected to finish between $7.1m and $8.0m, compared to a $400,000 operating loss in the prior year.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of between $9.3m are $10.0m projected, roughly four times its EBITDA for the same quarter in 2019.

The operator expects depreciation and amortisation costs, meanwhile, to fall between $1.7m and $1.8m.

After financial items, such as share-based payments, interest and fair value adjustments, net profit for the quarter is expected to fall in the range of $1.2m to $4.0m. This marks a significant improvement on the $4.1m loss posted for Q4 2019.

Looking ahead, the operator will expand on plans to redevelop its Bronco Billy’s Casino and Hotel in Cripple Creek, Colorado. Having initially planned to add a further 180 rooms, this will now be raised to 300.

The plans have been approved by the Cripple Creek Historic Preservation Commission and received initial approval from the Cripple Creek City Council, which must formally give the expansion the greek light.

Redevelopment of the property is expected to cost around $180m, which will be financed through debt. The expansion is expected to be completed in the fourth quarter of the year.

The operator’s finances were badly hit by nationwide casino closures aimed at limiting the spread of the novel coronavirus (Covid-19), with revenue for the first half of the year coming to just $45.4m, down 44.8%, and the operator making a net loss of $11.1m.

However, things have looked much more positive since casinos were permitted to reopen, as Full House brought in $42.0m and recorded a $7.7m net profit in the third quarter.