Penn National's Q4 Revenue Skyrockets

The fact that Penn National Gaming has become a regional gaming titan in their own right is best illustrated by the recently published Q4 financial report that reveals a gigantic leap in revenue for the brand.

Last Thursday’s results state that the total GGR for the three month period of October, November and December 2018 was $1.15 billion, despite the 41 cents per share loss.

Last year’s pivotal moment that opened up new frontiers for Penn was October’s $2.8 billion purchase of Pinnacle Entertainment.

Year-On-Year Profits’ 50% Jump

The $1.15 billion figure sounds way more impressive when one considers that 2017’s fourth quarter revenue stood at $769 million – making profits shoot for the stars with an almost 50% increase!

Operating income and adjusted earnings also came out as impressive, with the former surging from $97.6 to $124.4 million and the latter absolutely skyrocketing to $324 million from last year’s $124.8 million!

Penn’s officials forecast a $5.2 billion full-year revenue for 2019, which would place the company alongside the likes of Caesars Entertainment.

A Fateful Merger

The acquisition of Pinnacle effectively marked the merging of the US’ largest regional operators…

…with the end result being a monster of a company with 41 land-based facilities in 20 states, with a combined force of 53,500 slots, 1,300 table games and 8,300 hotel rooms!

This deal extended Penn’s reach to another 18 jurisdictions, prompting CEO, Timothy Wilmott, to deem this merger as a significant milestone in the company’s 24-year history, predicated by “unwavering commitment” to deliver exceptional entertainment to customers and local communities.

Broadening of Horizons

Talking to company investors, Wilmott said:

“There have been so many learnings over the last several months. We had a good idea pre-close what the opportunities would be, but the number of ideas and initiatives that we’re now pursuing in earnest has expanded probably twofold from what it was pre-close.”

He pointed out the revenue synergy as a fact to look out for when explaining the unparalleled financial success. He praised Pinnacle’s focus on high-end table game segment, saying they have done a much better job than Penn in that regard.

For Penn, next in store is the completion of Pinnacle assets integration as well as the opening up of two satellite casinos in Pennsylvania – Hollywood Casino York and Hollywood Casino Morgantown.

Breaking Through in Louisiana

The year began as the last one ended for these over-achievers – with another promising strategic buy, that of Louisiana’s Margaritaville Resort.

The Bossier City property was acquired for $115 million, funded with “incremental borrowings under its revolving credit facility.” Penn will invest another $23 million for a 15-year lease of facility’s land that belongs to Vici Properties investment company.

Timothy Wilmott was happy about this new investment, remarking:

“This acquisition is in line with our efforts to enhance shareholder value as it is immediately accretive to our free cash flow, further diversifies our revenue and operating base and offers a well-defined path to the realization of synergies that are expected to lower the purchase multiple.”

Source:

“Penn National Gaming’s Q4 Earnings Outlook”, finance.yahoo.com , February 6, 2019.