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Full House Resorts’ net profit rockets 7,863% in 2021

| By Robert Fletcher
US operator Full House Resorts reported a 7,863.3% year-on-year increase in net profit for its 2021 financial year, albeit from a low base, after the easing of novel coronavirus (Covid-19) restrictions led to a sharp rise in revenue.
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Consolidated revenue for 12 months through to 31 December 2021 amounted to $180.2m (£137.4m/€165.1m), up 43.5% from $125.6m in the previous year and in line with forecasts published last month.

Full House said this increase was primarily down to the easing of Covid-19 measures across the US, with enforced closures and capacity limits having harmed its performance in the 2020 financial year.

Casino revenue was 46.3% higher at $130.4m, while food and beverage revenue increased by 37.9% to $27.3m, hotel revenue 29.7% to $9.6m and revenue from its other operations, including contracted sports betting, climbed 68.4% to $12.8m.

With casinos returning to normal operations, this led to an increase in expenses, with total operating costs for the year up 23.9% to $142.6m. 

This left $37.6m in operating profit, an increase of 258.1%, while after excluding some costs, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) hiked 140.2% to $47.2m.

Full House also noted $25.4m in other costs, including $23.7m in interest expense, which resulted in a pre-tax profit of $12.1m, an increase of 21,974.5%.

After including $435,000 in income tax payments, Full House ended the year with $11.7m in net profit, up from just $147,000 in 2020.

“We are proud of our continued growth in 2021,” Full House president and chief executive Daniel Lee said. “Due to several years of investments in our properties and in new technology, as well as the hard work of our team in managing expenses, adjusted EBITDA increased to $47.2m from $19.7m in 2020. 

“All of our segments achieved their highest profits in any of the past five years and some properties, like the Silver Slipper, reached new all-time records for financial performance. It was an extremely strong year throughout the company.”

Looking at the fourth quarter, revenue for the three months to 31 December was $43.3m, up 13.1% on the previous year.

As operating costs were 23.2% higher at $37.7m, this meant operating profit fell 28.6% to $5.5m, while adjusted EBITDA was also down 19.4% to $7.9m.

However, other expenses were 89.9% lower at $431,000, helped by a $5.7m gain on the extinguishment of net debt. This meant pre-tax profit was 50.0% higher at $5.1m.

After accounting for $56,000 in income tax payments, Full House ended the quarter with a net profit of $5.0m, up 42.9% year-on-year.

Lee added that the business was making major progress in the construction of new casino projects.

“We expect 2022 to be a similarly transformative year for Full House Resorts,” Lee said. “While our permanent American Place facility in Waukegan, Illinois, will require approximately three years to construct, we expect to introduce American Place to the area’s residents much sooner – this upcoming summer – via The Temporary. We have spent several months designing a temporary casino facility and expect to begin erecting the casino structure in the next month, when major components of the structure begin to arrive on-site.

“Our other major construction project, Chamonix in Cripple Creek, Colorado, should continue the transformation of our company when it opens in the second quarter of 2023. Our confidence in Chamonix has reached new highs, driven by the success of a recent casino opening in Black Hawk, Colorado, and the significant growth in Colorado’s gaming revenues since the elimination of betting maximums in April 2021. 

“Chamonix will be the first high-quality casino hotel in Cripple Creek, and we expect it to meaningfully grow the market’s gaming revenue and generate a strong return on investment for our company, similar to what has occurred in Black Hawk.”

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