Gaming and Leisure Properties Inc. (GLPI) reported a year-on-year increase in revenue and net profit for its 2022 financial year following a record performance by the business in the fourth quarter.
During Q4, GLPI agreed to establish a new master lease for seven Penn Entertainment properties, including a funding option to allow Penn to pursue growth opportunities in several of its existing markets including Illinois, Ohio and Nevada.
This followed other significant activity earlier in the year including the sale of the Tropicana Las Vegas Hotel and Casino to Bally’s Corporation, a $1.00bn leaseback on two casinos in Rhode Island, again to Bally’s, the acquisition of several casino locations from Bally’s and the purchase of tow Pennsylvania properties from The Cordish Companies.
GLPI chief executive and chairman Peter Carlino said these agreements sets the group up for further growth in 2023, with GLPI shortly after the year-end having also acquired Bally’s Tiverton Casino & Hotel in Rhode Island and Bally’s Hard Rock Hotel & Casino Biloxi in Mississippi.
“We ended 2022 with record fourth quarter results and increased dividends as our deep, long-term knowledge of the gaming sector has allowed us to continually expand and diversify our tenant base, geographic footprint and rental streams,” Carlino said.
“Reflecting this ongoing expansion, since our establishment as the gaming industry’s first REIT, GLPI has grown from being a landlord with one tenant and 19 properties to become a landlord with six premiere tenants and 57 properties across 17 states as of December 31, 2022.”
Record Q4
Beginning with the fourth quarter, revenue in the final three months of the year amounted to $336.4m, up 12.8% from $298.3m in Q4 of the previous year.
Of this total, $299.2m came from rental income – including $116.8m from the Penn master license – while the remaining $37.1m was attributed to income from investment in leases and financing receivables.
Operating expenses were 35.1% lower at $60.9m, primarily due to a $22.0m positive impact from provision for credit losses. After also including $75.2m in financial costs, this resulted in a pre-tax profit of $200.2m, up 47.0% year-on-year.
GLPI paid $624,000 in income tax and also accounted for a $5.5m loss from its interest in an operating partnership, meaning it ended the quarter with a net profit of $194.1m, up 62.3% from 2021. In addition, adjusted EBTIDA increased by 12.6% to $312.0m.
Full year
Turning to the full year and total revenue for the group climbed 7.9% from $1.22bn in 2021 to $1.31bn. This included $1.17bn in rental income and $138.3m in income from investment in leases and financing receivables.
Operating expenses were 24.8% lower at $281.8m, helped by a $67.5m positive impact from gains from dispositions, while other costs for the year amounted to $309.6m.
As such, pre-tax profit was 28.1% higher at $720.3m, while after accounting for $17.1m in income tax payments and a $18.6m loss from the operating partnership, GLPI was left with a net profit of $684.7m, up 28.2% year-on-year.
In addition, GLPI said adjusted EBITDA for the full year was 11.4% higher at $1.22bn.
“Looking forward, we believe GLPI is well positioned to deliver long-term growth based on our gaming operator relationships, our rights and options to participate in select tenants’ future growth and expansion initiatives, and our ability to structure and fund innovative transactions at competitive rates,” Carlino said.
“Our tenants’ strength, combined with GLPI’s balance sheet and liquidity, position the company to consistently grow its cash flows and build value for shareholders in 2023 and beyond.”