Posted: Jan 30, 2023 04:20h.
Last updated: Jan 30, 2023 04:43h.
The addition of newly acquired properties to its portfolio could provide significant revenue growth for Century Casinos (NASDAQ: CNTY) over the next two years.
B. Riley analyst David Bain reiterated a “buy” rating and $13 price target for the Colorado-based regional casino operator in a note to customers on Monday. That price forecast means he’s up 53.8% from today’s close.
Bain has confirmed that it has lowered its estimate of Century’s earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter by approximately 15%. He also noted that the venue’s temporary space worked well.
During Q4 2022, Caruthersville will be closed for several weeks and CNTY will open a temporary land-based facility ahead of a new all-new land-based casino hotel. His GGR for temporary facilities has increased year-on-year since opening, and checks show that CNTY’s overall portfolio trend is relatively strong in January,” the analyst wrote.
The operator is spending $51.9 million to equip the Carruthersville venue. Century Casinos Caruthersville is Missouri’s last riverboat casino and received landing approval from the Missouri Gaming Commission last year. This is one of his two game venues in the state operated by Century, the other being at Cape Girardeau.
Reno, Rocky Gap could boost Century
Century Casinos made its acquisition in 2022, paying $195 million for Nugget Sparks casino and a 50% stake in the real estate company that owns the gaming venue. He then acquired the operating rights to the Rocky Gap Casino Resort in Flinstone, Maryland for $56 million.
This year will be the first full calendar where the venue is part of the operator’s portfolio. This could spur growth in his EBITDA for the small-cap gaming company.
“Our CY23E/CY24E EBITDA growth is 40%/23%, CNTY folded with our acquired Reno and MD businesses, including Slot Floor (Reno, MD), Game Mix (Reno, MD), Loyalty Club ( Reno), MD), Façade (Reno), F&B (Reno), and Synergy,” Bain added.
The acquisition of Nugget Sparks could be particularly fruitful for Century. This marks the operator’s entry into Nevada, as the Reno market is growing, demographic trends are good, and venues don’t need expensive overhauls.
Century Casino May Pursue Further Transactions
Neither Bain nor the company has confirmed much, but given the operator’s documented history of sensible bolt-on deals, it could pave the way for another acquisition in 2023.
That claim is reinforced by Century’s recent departure from Bermuda and the possibility that it will eventually divest its stake in Casino Poland to raise cash for domestic purchases.
Additionally, some larger operators with regional portfolios may be forced to let go of what they see as lagging venues, with Century tending to pick up and turn around. Century shares are already up 20.20% year-to-date.
