GLPI raises full-year guidance after record Q2

Group revenue from real estate in Q2 was 6.7% ahead of the $356.6m reported by GLPI in the same period last year.

GLPI noted the impact of recent acquisitions on revenue performance in Q2, which increased cash rental revenue by $11m. For the quarter, total revenue from rental was $332.8m, up 4.3%.

Revenue from investment in leases and financing receivables also climbed 23% to $46m. In addition, GLPI benefited from $1.8m worth of interest income from real estate loans. 

GLPI also reported a 5.6% increase in AFFO, with this amounting to $264.4m in Q2. AFFO is funds from operations (FFO) – net income excluding gains or losses from dispositions of property, net of tax and real estate depreciation – but also excluding various other factors. These include stock-based compensation expense, amortisation of land rights, and property transfer tax recoveries and impairment charges.

“We benefited from the growth of our property portfolio and rent escalations along with our discipline around liquidity and our capital structure,” GLPI chairman and CEO Peter Carlino said.

“Furthermore, our consistent successes in building our tenant base clearly demonstrate our opportunistic approach to portfolio expansion as well as our ability to work with existing tenants to find exciting new ways to expand our close relationships.”

Net profit up 33.9% in Q2

Turning to costs for the quarter, operating expenses were slashed by 26.3% to $87.2m. This is mainly due to a sharp drop in provision for net credit loss. In Q2 of last year, this stood at $28.1m; in contrast, GLPI allowed for a $3.8m gain.

Elsewhere, net finance costs were only up marginally from $78.1m to $78.6m as increased interest income almost completely offset a rise in interest expenses. 

This resulted in a pre-tax profit of $214.8m, up 34.1%. GLPI paid $412,000 in income tax and also noted $6.2m in profit from a non-controlling interest in an operating partnership, with this taken off the final total.

As such, net profit for the quarter reached $208.3m, a 33.9% rise from $155.6m last year. In addition, adjusted EBIDTA increased 4.6% to $340.4m.

Similar story in H1 for GLPI

As to how Q2 impacted GLPI during its year-to-date, revenue for the six months to 30 June hit $756.6m, up 6.3% from $711.8m last year. 

Again, acquisitions pushed total rental revenue up 4.1% to $663.4m, while its revenue from investment in leases and financing receivables increased 21.1% to $90.3m. GLPI also noted $2.9m in interest income from real estate loans.

Spending-wise, operating costs were more or less level at $205.6m, while finance expenses were only slightly higher year-on-year at $156.0m. 

Pre-tax profit reached $395.0m, up 13.1%. GLPI paid $1m in tax and discounted $11.2m in profit from non-controlling interest. This resulted in a bottom-line net profit of $382.7m, a rise of 12.9%.

In addition, AFFO for H1 increased 4.8% to $523.0m, while adjusted EBITDA climbed 3.9% to $673.9m.

GLPI forecasts more growth as full-year targets increase

The group has raised certain forecasts for the full year. This primarily relates to AFFO. For the 12 months to 31 December 2024, GLPI expects AFFO to be between $1.054bn and $1.059bn. This is compared to previous guidance of $1.042bn and $1.051bn.

“As we look to the balance of 2024, we expect to continue to deliver on our promise to shareholders to be a strong steward of their investment capital,” Carlino said.

Windy City win for GLPI

GLPI also issued an update on its recent agreement with Bally’s in Chicago. Announced earlier this month, this will see GLPI provide some $2.07bn in funds to support Bally’s with its new land-based casino project in the Illinois city.

An initial $940m will be covered by an amended master lease agreement, with rent set at $20.0m for 15 years. The deal also provides for GLPI to acquire and lease back certain real property interests underlying Bally’s Kansas City in Missouri and Bally’s Shreveport in Louisiana, for a total consideration of $395m in exchange for $32.2m in initial annual rent.

In addition, Bally’s expects to amend its contribution agreement with GLPI and reiterated its intention to sell and lease back its Twin River Lincoln property in Rhode Island to GLPI. This is due before the end of 2026 and will raise approximately $735m.

“This is a big-time project that is going to be pretty impressive,” Carlino said during a post-Q2 earnings call. “The key to any project like this is on-budget, on-time, and I think we’ve had a pretty good track-record over the years of accomplishing that.

“We’ve spent a lot of time looking at it. We like the sponsorship with Bally’s. We will have a seat at the table in assisting and I hope hopefully creating a project that is going to be successful. So, we feel pretty good about it. I think the range of outcomes I think in any case for us is very, very strong.”