Century Casinos (NASDAQ:CNTY) is selling the property on which Century Casino Calgary is located for $6.5 million. The edifice is also included inward the transaction with Rowanwood Financial Properties.
Rowanwood Financial already paid $560,000 and the rest is due upon closing, which is expected to come in 30 days.
Colorado-based Century sold the operating rights of the locus inward Aug 2020 for $7.5 million, but maintained ownership of the existent acres assets and the sports bar, bowling, and entertainment amenities.
Century Resorts Alberta continues to control Century Sports, a sports bar, bowling and amusement readiness placed on a portion of the property. Upon closing, CRA testament layover operating Century Sports and will transpose the take accord for the gambling casino premises to the Buyer,” according to a statement.
At the clip of the cut-rate sale of the operating rights, Century noted the Calgary casino contributed just $1.2 1000000 to the operator’s overall earnings before interest, taxes, wear and tear and amortization (EBITDA) tally.
Small Transaction, Potentially Big Implications
Between the operating rights and existent estate sales, Century is grossing $14 billion from the Calgary casino. On the surface, that doesn’t sound the like much, but it’s non little change relative to the operator’s $344.59 market capitalization.
However, the proceeds add together to what’s one of the strongest equilibrate sheets among small-cap gaming names and could live used to acquire neglected casinos from other operators this year. Owing to Century’s cart track track record of scooping upwardly unloved assets from larger competitors and wringing time value from those venues, analysts widely expect the manipulator to follow a buyer at some point this year.
“We trust this transaction (Calgary) farther simplifies CNTY’s story, and affirms management’s loyalty to selling non-core assets,” said Philip Milton Roth Capital analyst Edward VII Engel inward a billet to clients. “We also trust this highlights time value within CNTY’s Canada segments, and adds believability to management’s consignment to selling Republic of Poland assets.”
Following the Calgary sale, Century has four gaming venues in Canada. Engel believes it’s possible that, o'er time, the manipulator testament divest those holdings inward an elbow grease to point its focalize on the to a greater extent lucrative US market. He rates the gunstock a “buy” with an $18 damage target.
Keep an Eye on Poland
Century belike isn’t through with(p) selling assets set out of doors the US. The society is sounding to sell its two-thirds wager in Casinos Poland and multiple unidentified parties are believe to live interested.
“On a normalized basis, we believe these casinos chip in ~10 percent of CNTY’s EBITDA. Management has already indicated interested buyers, although the pandemic has stalled a sale,” adds Engel. “After results rebounded inward 3Q21 (EBITDA +22 percent vs 3Q19), we believe continued strength inwards 4Q21 and 1Q22 will help draw a unfluctuating offer inward 2022. We wait CNTY’s Republic of Poland sales event to bring forth over $40M inward immediate payment proceeds, patch significantly simplifying CNTY’s investment story.”
A timeline for a business deal inwards Poland isn’t known at this time.