Most recently Great Canadian Gaming Corporation released its fourth quarter and its entire year financial statistics for the past 2020 year. The fiscal reports show that the lockdown restrictions that closed almost all businesses down have had a severe impact on the Crown corporation’s financial wellbeing. Properties under the company’s jurisdiction have been closed and reopened several times over the last 12 months leading to major turbulences in its revenue figures.
The momentary reopening of its gaming properties had little to no impact on the financial situation due to the restricted access to the venues in question. All these factors led to a substantial decrease in the gaming regulator’s annual numbers of income, expenses, adjusted EBITDA, net earning of shareholders, free cash flow, and total cash flows.
Difficult 12 months
The Crown reported a negative cash flow of CA$97.4 million for the Q4 of 2020 and CA$326.4 million for the entirety of the calendar year. For comparison 2019’s fiscal numbers were significantly better with respective negative CA$23.2m and CA$54.5m. This is due to the corporation’s decreased adjusted EBITDA from the temporary closing down of properties, increased interest payments, and lower-income taxes paid.
The rise in the negative free cash flow was caused by borrowings from the Crown’s credit facilities and the remainder of cash balances. Cash outflow for the last quarter was CA$37.1 million, compared to last year’s same quarter of CA$19.9 million. This can be explained by the dip in cash accumulated due to non-operational gambling facilities. And factor taking its toll is the company’s construction of its projects in the Ontario province.
Statistics show that the full-year cash inflow estimates around CA$105.1 million, compared to 7.1 million of cash outflow for the same time period but the previous year. The turn of cash outflow to inflow was due to the CA$189 million of the gross revenue received from the Senior Unsecured Debentures. Other reasons are the increased borrowings from credit amenities, decrease in capital expenses, and lower purchases of common shares.
Interim CEO Terrance Doyle discussed the current financial situation of the gambling leader. According to him, the aim it so to ensure the company’s long-term future and get out of the financial crisis. The gaming establishment has recently agreed to a deal with Apollo Funds, and Mr. Doyle Believes that this agreement will help the company overcome the current unfortunate financial difficulties.
Four Reopenings
The corporation is off to a promising start this year after Ontario’s authorities have allowed some businesses to recommence operation by lifting certain lockdown conditions. The Crown agency reopened four more of its properties on February 16, 2021 – Shorelines Casino Peterborough, Shorelines Casino Thousand Island, and Shoreline Slots at Kawartha, and Shorelines Casino Belleville. Each gambling facility operates under a strict set of rules which every guest should comply with in order to enter the premises.
New CCO
Not long ago the gambling regulator publicly announced the Sukvinder Singh will be taking over the company’s position of new Chief of Compliance Officer. Mr. Singh has plenty of experience in his portfolio after being previously employed by the Alcohol and Gaming Commission of Ontario. The Board of the corporation believes that their new CCO possesses the right tools in order to deal with his newly-assigned responsibilities.
Source: “Great Canadian Gaming Announces Fourth Quarter and Annual 2020 Results”, Cision, March 2, 2021
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