Operator News

US – Boyd refuses to rule out new acquisitions

By Phil - 29 April 2019

Having seen its first quarter results boosted by the additional revenues of five Midwest casinos and an Illinois slot machine route operator, Boyd Gaming has not ruled out other potential acquisitions.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “We’ll only execute on something if it is additive to the portfolio and we can generate a return for our shareholders. We’re not interested in vanity products. It has to be the right asset, in the right market, for the right price. If there is an asset on the strip that becomes available, that’s priced right, that is additive to the portfolio that can generate a return, then we’ll execute on it.”

His comments came as Boyd reported first-quarter revenues of $827.3m, a 36.5 per cent increase from $606.1m in the first quarter of 2018.

The results were boosted by $213m in revenues and $59.5m in Adjusted EBITDAR from Ameristar Kansas City, Ameristar St. Charles, Belterra Resort and Belterra Park, acquired on October 15, 2018; Valley Forge Casino Resort, acquired by the company on September 17, 2018; and Lattner Entertainment.

In March 16 of Boyd’s 17 regional properties delivered EBITDAR growth. These strong March results included all five of its recent acquisitions, which posted strong performances in the first full quarter under our ownership.
“The integration of these properties into our company is well underway and we are confident in the future potential of these new assets and in our ability to achieve the target level of synergies we previously announced,” Mr Smith explained.

Mr. Smith, added: “This was another great quarter for our company, as the successful execution of our strategy continues to deliver growth and margin improvement across every segment of our business. Both of our Nevada segments continued to achieve solid growth in profitable revenues, Adjusted EBITDAR and operating margins, driven by a robust regional economy and operational and marketing refinements. Our Midwest and South business produced its fourth consecutive quarter of same-store Adjusted EBITDAR gains, overcoming severe winter weather early in the quarter with an exceptionally strong March performance. We also made substantial progress integrating our recent acquisitions and realising synergies, positioning us to take advantage of the long-term potential of our new properties. In all, we remain confident in the direction of our company, and committed to creating long-term value for our shareholders.”

In the Las Vegas Locals segment, first-quarter 2019 revenues were $222.9m, up from $222.2m in the year-ago quarter. Downtown Las Vegas delivered revenues of $63m in the first quarter of 2019, growing from $60.5m in the year-ago period.

In the Midwest and South segment, revenues were $541.4m, up from $323.5m last year, due to the contributions from the company’s newly acquired properties.

Sports betting has also given Boyd’s results a boost. Mr. Smith said the company was ‘well positioned to benefit from the expansion of sports betting across the country.’

“We have seen great results at the IP since its sports book open in August,” he explained. “As sports betting is contributing to strong growth in visitation. We are also optimistic about the potential of the new FanDuel sports book at Valley Forge, which opened last month.

“We are confident that the FanDuel brand will hold similar appeal for our customers in a lucrative Philadelphia market, helping drive a long-term growth in visitation to Valley Forge,” he added. “We now offer sports betting in three states across the country and that number will only increase in the future as legislation to legalized sports betting continues to move forward in state houses nationwide. we look forward to the opportunity to introduce sports betting at our four properties in Iowa and Indiana later this year.”

Stifel analyst Steve Wieczynski said of Boyd’s results: “We expect to see a modestly positive response to Boyd’s earnings report. The reported results were slightly better than some investors had feared, and management’s encouraging forward-looking business commentary should put to rest any concerns around the health of the regional gaming consumer.”