Gaming and Leisure posts revenue up 5.8% to $376M in Q1, delivers record operating results

Gaming and Leisure Properties has reported its financial results for the first quarter of the year. For the period ended March 31, the real estate investment trust (REIT) reported $376 million in revenue, up by 5.8% from the same quarter last year, slightly surpassing the analysts' expectations of $368.78 million. As a result, the firm has updated its full-year guidance. 

However, net income for the quarter stood at $179.5 million, or $0.64 per diluted share, falling below the estimated $0.72 EPS and showing a decrease from the previous year's $188.7 million. GLPI’s adjusted EBITDA increased to $333.4 million from $323.1 million in the prior year, indicating improved operational efficiency. 

Peter Carlino, Chairman and Chief Executive Officer, said: "GLPI's consistent cash flow generation, based on our work with the industry’s leading operators, led to record first quarter results across key financial metrics when excluding the non-cash impact of a nearly $29 million year-over-year change in our reserve for credit losses, net."

The company has now increased its guidance for the full year, estimating it will generate between $1,042 million and $1,051 million, or between $3.71 and $3.74 per diluted share and OP units. This is up from previous guidance between $1,041 million and $1,050 million. 

Q1 growth initiatives included the acquisition of  Tioga Downs Casino Resort in Nichols, NY, from American Racing & Entertainment for $175 million. Simultaneous with the acquisition, GLPI and American Racing entered into a triple-net master lease agreement for an initial 30-year term.

Under this agreement, GLPI will lease the property back to American Racing, with an initial annual rent of $14.5 million, representing an 8.3% capitalization rate. The lease terms also include fixed annual escalations to ensure sustainable growth over the lease period. 

"As with our other tenant relationships, we look forward to a long-term partnership with American Racing and our initiatives to further expand our portfolio remain active in the current environment as our reputation as the gaming landlord of choice is strengthened, reflecting our deep, long-term knowledge of the sector," the CEO commented.

During the first quarter of 2024, an additional $14 million was drawn on the $150 million delayed draw term loan commitment for a development project in Rockford, Illinois that is expected to be completed in September 2024. On March 31, 2024, $54 million of the $150 million commitment was funded which accrues interest at 10%.

Carlino noted that in 2023 the business completed over $1.1 billion of transactions, including over $760.0 million of traditional real estate acquisitions and $337.5 million of loan funding commitments. "The overall 2023 transaction value – despite a still challenged market environment – reflects our creativity in crafting comprehensive financing solutions for our tenant partners," he stated. 

"Our 2023 portfolio additions and recently completed transactions combined with contractual rent escalators and a strong balance sheet, set the stage for continued financial growth in the balance of 2024 and beyond. Our disciplined capital investment approach, combined with our focus on stable and resilient regional gaming markets, supports our confidence that the company is well positioned to further grow our cash dividend and drive long-term shareholder value," he concluded.