Century Casinos Real Estate Optionality Is Stock Catalyst, Says Analyst
Century Casinos (NASDAQ: CNTY) could capitalise on its owned real land as an avenue for unlocking shareholder time value and reducing debt.
That’s the use up of Stifel psychoanalyst Jeffrey Stantial, who in a young describe to clients, highlighted Century’s tangible acres optionality. The regional gambling casino manipulator lately signaled a willingness to parting with real acres to wage hike capital. Earlier this month, Century announced the cut-rate sale of the holding assets of four of its Canadian gaming venues to VICI Properties (NYSE: VICI) for $164.4 million. That transaction, which is scheduled to close inward the 2d half of 2023, testament generate an estimated $114.6 zillion inward proceeds for the seller.
Stantial believes there are possibilities with the existent demesne of Century’s 2 Centennial State casinos, as considerably as its 50% post inwards the holding of the Nugget Sparks inwards Northern Nevada.
This suggests further optionality, with CNTY unlikely to incur full course credit for remaining real land ownership in valuation. For CNTY’s CO assets, assuming 2x split reporting and a cap-rate inline with the most recent sell struck with VICI implies >$100M of possible incremental capital,” wrote the analyst.
Stantial added that, as is the typesetter's case with many cassino operators that own tangible estate, Century’s adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or hire costs (EBITDAR) estimates connote the operator’s attribute story isn’t full apprehended inwards the investment funds community.
Casinos Polska Sale
For several years, it’s been expected that Century would sell its two-thirds stake in Casinos Poland. However, that dealing was delayed past the coronavirus pandemic and subsequent shutdowns of those venues, and Russia’s 2022 invasion of Ukraine.
That geopolitical headwind has turned into a tailwind, as Ukrainian refugees to Republic of Poland get contributed to up performance at Casinos Polska venues, indicating Century doesn’t demand to rush to disinvest its interest inward that operator.
On the other hand, rising revenue at the Polish casinos could imply Century could have vantage of honest timing to divest that bet and erect capital. Stantial sees advantages inwards such a move.
“Longer-term, we see likely farther roll-up opportunities, spell an eventual sales agreement of CNTY’s Republic of Poland assets should simplify the story for US-focused investors,” added the analyst.
Century Could Have Second-Half Momentum
Beyond plus sales, Century’s fundamentals could be boosted inwards the indorsement half of this yr as improvements accept configuration at its 2 Show Me State gaming venues, and as the manipulator capitalizes on synergies at Nugget Sparks.
As Stantial observed, there’s plentiful room for Century to wrench benefits from Nugget Sparks, its firstly Nevada venue, because the venue was antecedently operated by a belongings developer and the one-armed bandit flooring didn’t receive right investment.
The analyst also pointed come out that Reno/Lake Tahoe casino resorts were hampered by unco large snowfall inwards Jan and February, something that won’t follow an emerge over the next several months.
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