Record fourth-quarter and full-year-2023 revenue, along with a continued appetite for expansion, gave Gaming and Leisure Properties executives plenty to discuss during its earnings presentation.
Gaming and Leisure touted its recent purchase of the land occupied by Tioga Downs racino and expressed optimism that Major League Baseball’s Oakland Athletics will move as planned to Las Vegas into a stadium on land the real estate investment trust owns.
In a statement Tuesday, Wyomissing, Pennsylvania-based Gaming and Leisure said funds from operation were $282.2 million, or $1.02 per share, for the three months ended Dec. 31, up from $258.8 million, or 97 cents per share, a year earlier.
Adjusted funds from operation, which exclude one-time costs, were 93 cents per share, in line with the consensus estimate of analysts surveyed by Seeking Alpha. Funds from operation are a closely watched fiscal yardstick for real estate investment trusts; it takes net income and adds back depreciation and amortization.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that also excludes one-time costs, were $331.4 million, up 6.2% from $312 million.
Fourth-quarter revenue rose 9.7% to $369 million from $336.4 million and topped the $361.8 million forecast of Seeking Alpha-polled analysts.
Gaming and Leisure’s stock rose on the news, adding 97 cents, or 2.18%, Wednesday to close at $45.52 in regular Nasdaq Stock Market trading. The share price climbed further after hours, rising 26 cents, or 0.57%, to settle at $45.78.
Gaming & Leisure CEO Peter Carlino said the REIT managed economic headwinds and continued to diversify its tenant base and geographical reach.
“In 2023, we completed over $1.1 billion in transactions, including over $760 million of traditional real estate acquisitions and $337.5 million of loan-funding commitments,” he said in a statement.
Carlino added that GLPI’s 2023 acquisition of two Bally’s casinos in Rhode Island and Mississippi boosted overall results.
On Feb. 6, Gaming and Leisure bought the real estate assets of Tioga Downs in Nichols, New York, for $175 million from American Racing & Entertainment LLC. In the deal, American Racing entered a 30-year triple-net master lease with $14.5 million in initial rent and annual fixed escalations of 1.75% after one year and 2% after 15 years. Tioga Downs has a 32,600-square-foot gaming floor with 895 slots and 29 table games.
Also in the fourth quarter, Gaming and Leisure sold 3.88 million stock shares, raising $179.7 million in net proceeds.
During the question-and-answer session, an analyst asked, given recent snags, whether the Athletics move would happen as planned. The team would move into a stadium that would go up on 35 acres of Las Vegas Strip land the REIT owns and that Tropicana hotel-casino has occupied. The Athletics have said they hope to break ground on the Tropicana site by April 2025 and have the stadium ready for the 2028 season. The Athletics’s lease at the Oakland Coliseum in California expires after the upcoming season, which starts in late March.
“A lot of the news coming out of Las Vegas lately has been somewhat negative, questioning the timing, development, and maybe the viability of that project,” Chief Operating Officer Brandon Moore said, “From our perspective, a lot of that’s noise. A lot of this is proceeding along the timelines that we would’ve expected.”
Meanwhile, Carlino said the REIT and its tenants stand poised to prosper, citing the Casino Queen’s transition from a riverboat to a land-based casino in Baton Rouge, Louisiana, as a particular success.
“Early on, we used to get the question, where’s your pipeline? Well, we’ve never had a pipeline,” he said. “We’ve gone from 19 to 62 properties and it’s not an accident. So we’re encouraged. We’ll see where it goes.”
For the full year, Gaming and Leisure had $1.01 billion, or $3.73 per share in funds from operation, up from $887.3 million, or $3.40 per share. Twelve-month revenue rose 9.9% to a record $1.44 billion from $1.31 billion.
Gaming and Leisure said it expects 2024 adjusted funds from operation to be $1.04 billion to $1.05 billion, or $3.70 and $3.74 per diluted share.
