Gaming and Leisure Properties’ CEO Peter Carlino joked he has felt a little like Rodney Dangerfield when facing analysts and journalists for conference calls.
In the real estate investment trust’s fourth quarter gathering Friday, he said his real estate investment trust has long performed admirably — its properties are fully occupied and project to remain so — but, as the late comedian often said, “got no respect.”
Wyomissing, Pennsylvania-based GLPI likely earned a modicum of respect, and in-the-moment gratification when it reported fourth quarter revenue that topped Wall Street forecasts and a cash flow measure that was in line. However, company officials were fairly mum on future acquisitions, saying they’re keeping a conservative, cautious approach.
In a statement, GLPI said its adjusted funds from operation, a cash flow measure that excludes one-time costs, were $188.6 million, or 87 cents per diluted share, for the three months ended Dec. 31, up from adjusted funds from operation of $181.6 million, or 84 cents per share, a year earlier.
The latest adjusted funds from operation result matched the 87 cents-per-share forecast of analysts surveyed by Seeking Alpha. Funds from operation are a closely watched fiscal yardstick for real estate investment trusts that take net income and add back depreciation and amortization.
Net income for the quarter was $113.9 million, or 53 cents per share, up f $93 million, or 43 cents per share, a year earlier.
Revenue rose 1.7% to $292.8 million from $287.9 million and topped Seeking Alpha-polled analysts’ $292 million forecast.
GLPI shares rose in Friday trading, climbing 56 cents, or 1.13%, to close at $50.30 on the Nasdaq.
During the conference call, Carlino touted regional gambling’s stability, which he said is inherently more stabled than Strip revenue in Las Vegas.
“The story we’ve been telling … (is) that these are pretty serious properties in the markets where we are (and) in many cases our properties are market leaders, and that’s just beginning to be appreciated,” he said, reiterating, as he has in past quarters, that GLPI isn’t in the monument-building business.
“For 2020, we’ll continue to refine our outreach to all of you and to others who may not yet know our story,” he added. “We remain totally focused on generating safe and attractive and accretive transactions this year as always.”
GLPI CFO Steve Snyder highlighted happy lacks in the quarter — there were no nonrecurring items, no unamortized financing fee write-offs, no goodwill impairment charges.
“We in the quarter really hit our stride as an operating business,” Snyder said, “and feel strongly that we’ve set the template for the future opportunities.”
Snyder said the removal of the mortgage for Lumiere Place in St. Louis (an Eldorado Resorts property) and the removal of Resorts Casino Tunica (a Penn National Gaming sale that closed June 30) property from master leases reduced GLPI’s property count but didn’t affect the REIT’s rental revenue stream.
Snyder expected the question-and-answer session question about GLPI’s acquisition strategy and wryly commended his audience for finding creative ways to re-ask the same query.
“As Peter said, we look at everything that moves,” he said. “We have tremendous relationships with the leading regional gaming operators, Penn (National Gaming), Eldorado (Resorts) and Boyd (Gaming Corp.) in the United States. This is an industry that is continuing to consolidate. … We’re not an obstacle, but we really are a business partner and a facilitator in helping them grow their business.”
Carlino, as he had in the previous quarter’s conference call, said megadeals like the sales of the Bellagio in Las Vegas (a $4.25 billion sale and leaseback from MGM Resorts International to Blackstone Real Estate Income Trust) are a boon for GLPI.
“What it underscores is that an institutional source of capital has looked at these unique — in that case, Bellagio, it’s a unique property to be sure and made a judgment that’s a highly valuable asset that makes sense for the long-term,” Carlino said. “And I think we all put us sort of stand in the reflected light if you will of that transaction.
#newsroom – R-E-S-P-E-C-T: Gaming and Leisure Properties revenue tops forecasts in Q4. -Matthew Crowley, @copyjockey, CDC Gaming Reports. https://t.co/WRw6gtqEbZ #CDCgaming
— CDC Gaming Reports (@CDCNewswire) February 23, 2020
“I think this has always been about from the time we started this market segment, gaming REIT, it was always about getting the market to appreciate that these are special assets with long-term enduring safe value,” he added. “And anything that happens in our space that suggests that these are important — is helpful. So, we’re delighted. I can’t say we would have paid what those folks paid, but look, it makes sense. It’s unique.”
For the 12 months ended Dec. 31, Gaming and Leisure had adjusted funds from operation of $743.2 million, or $3.44 per share, up from $683.6 million, or $3.18 per diluted share, a year earlier.
Twelve-month net income was $390.9 million, or $1.81 per share, up from $339.5 million, or $1,58 per share, a year earlier. Twelve-month revenue rose 8.5% to $1.15 billion from $1.06 billion.
Follow Matthew Crowley on Twitter @copyjockey
