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US – Isle of Capri swings to profit in second quarter

By - 3 December 2015

Isle of Capri Casinos reported a profit in its second-quarter due to the welcome combination of higher revenue and lower expenses.

The St. Louis-based locals operator, who has 14 casinos in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri, and Pennsylvania, reported net revenues for the current quarter of $236.3m compared to $234.5m in the prior year quarter, up 0.8 per cent. Consolidated Adjusted EBITDA was $48.4m for the quarter compared to $44.3m in the prior year quarter, up 9.3 per cent.

Virginia McDowell, the Company’s President and CEO, commented: “We grew Adjusted EBITDA for the seventh consecutive quarter with 11 of 14 properties reporting Adjusted EBITDA increases. This quarter marks an important achievement in our continuing efforts to optimize our marketing reinvestment. As we continue to target our marketing dollars toward more profitable customers, we strategically reduced promotional allowances nearly 10 per cent during the quarter, which also resulted in a slight reduction in our gross revenues. Nonetheless, in combination with prudent expense management, we grew Adjusted EBITDA by 9.3 per cent, resulting in flow through of more than 200 per cent and a 160-basis-point increase in operating margins.

“We continue to use our free cash flow to invest in our properties and deleverage our balance sheet. We are renovating hotel rooms and food and beverage outlets, upgrading our technology platforms and introducing new products to our casino floors,” she added. “At the same time, we reduced our debt balance by $30m during the quarter. Our balance sheet is now in the best shape it has been in over a decade.”

The group’s success stories were in Pennsylvania, where net revenues were $9.6m, up 6.6 per cent, and Pompano, where net revenues increased 4.9 per cent to $38.5m.

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