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Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good afternoon, ladies and gentlemen. Welcome to the Great Canadian Gaming reports first quarter results 2008 conference call. I would now like to turn the meeting over to Mr. Thomas Bell, Vice President and Investor Relations of the Great Canadian Gaming Corp. Pleas go ahead, Mr. Bell.
THOMAS BELL, VP, CORPORATE DEVELOPMENT, IR, GREAT CANADIAN GAMING CORP: Good afternoon, everyone. Welcome to Great Canadian Gaming Corp. conference call to review the Company's financial results for the first quarter ended March 31, 2008. Once again, I am Thomas Bell, Vice President of Corporate Development and Investor Relations. With me on the call this afternoon are Ross Mcleod, our Chairman and Chief Executive Officer; Vincent Trudel, our Chief Operating Officer; and Milton Woensdregt, our Chief Financial Officer.
Following our prepared remarks, we'll up the call to question and answer session for analysts and institutional investors. Before I begin, I must caution all participants that this conference call may contain forward-looking statements which reflect management's expectations regarding the Company's future growth, results of operations, performance, business prospects, and opportunities. Whenever possible, such words as anticipate, believe, expect, intend, or similar expressions will be used to identify these forward-looking statements. These statements reflect management's current beliefs, and are based on information currently available to the Company. Forward-looking statements involve significant risk, uncertainties and assumptions. A number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully, and current or prospective investors should not place undue reliance on these forward-looking statements. Of all the forward-looking statements that may be made in this conference call, are based on what management believes to be reasonable assumptions. The Company cannot assure current or prospective investors that the actual results will be consistent with these forward-looking statements. These statements are made as of the date of this call, and the Company assumes no obligation to update or revise them to reflect new events or circumstances. At this time I would turn the call over to Ross Mcleod who will provide some high level commentary on our business over the course of the year. Then Vincent Trudel will provide a region by region overview of our properties first quarter performance, followed by Milton Woensdregt who will discuss our financial performance. Ross?
ROSS MCLEOD, CHAIRMAN, CEO, GREAT CANADIAN GAMING CORP: Thank you, Tom. Good afternoon to all of you. Especially those whom I haven't spoken with in some time. As you may know, I don't usually join in quarterly calls; however, as Great Canadian continues a very busy 2008, I wanted to provide a brief overview of how I see our business going forward and offer some commentary on the Canadian gaming market in general. It is no secret that many of the major and regional markets in the United States have experienced challenging times over the last few quarters. Especially the last few months. Economic pressures south of the border are increasing, and these pressures are beginning to impact the gaming establishment. Diverse markets such as Atlantic City, Colorado, Connecticut, Illinois, Indiana, Mississippi, Missouri, west Virginia and Nevada have experienced year to date revenue declines of between 2 and 17%. In contrast to this, Great Canadian continued to post continuing year over year improvements in both revenues and EBITDA in Q-1.
The majority of our markets are performing very well. British Columbia, as a whole continues to grow, and the aggregate results of our Ontario racetracks are improving, even as some casinos in that province face challenges due to their reliance on cross border traffic. I believe the growth in the Canadian market bodes well for the near future, and is sustainable over the coming few years. In my opinion, attempts to apply the challenges of the U.S. gaming market to Canada are a little bit misguided. There are a few reasons for this.
Canada's gaming market has yet to reach its maturity. For example, even though it seems like a lifetime ago for some of us, River Rock has been open for less than four years. In addition to supply in Canada remaining tightly controlled, the nation, as a whole, continues to boast a stable real estate market, positive player demographics, and generally, a healthy economy. All of these factors show no signs of change for gaming. Especially here in Vancouver. Where the upcoming 2010 Olympics continue to serve as an economic catalyst. Also, it's important to note that many of the larger American gaming companies have diversified their areas of focus. For these companies, lodging has emerged as a major business component. That's not true for Great Canadian. Although we are excited about adding a third tower to River Rock, we remain a gaming company above all else. And as you know, that's the type of business that has historically proven resilient through periods of economic difficulty.
I would now like to run through our development pipeline. The development of our current facilities is something that's proven very lucrative for us over the past few years. The Boulevard casino is an excellent example. And I believe that all the projects I'm about to outline have the potential to be just as rewarding. Two of these developments have already reached completion. The first is Fraser Downs, which is now the only racetrack in Canada to offer its guests both slot and table play. Initial reactions to these offerings have been positive, but they are only preliminary. Adding the infrastructure of a full casino to Fraser Downs has impacted its EBITDA. But I'm confident this will show sustained improvement over the balance of the coming year. The second is the River Rock conference center, which we completed in 2007. Conference center has already provided a substantial benefit for the River Rock hotel. While increasing midweek play at the facilities casino.
There's greater potential for the conference center, though, and we should realize that once the new tower opens in 2010. This tower is something I'm really looking forward to. It will open in conjunction with the Canada line, a portion of Vancouver's new mass transit system. This line will run from the airport and Richmond to downtown Vancouver. Between 80,000 to 100,000 passengers a day are expected to flow through Bridgeport Station. The section of the line that will connect to River Rock. Obviously, some of those passengers will become our guests. And we are adding more than 1500 new parking spaces to accommodate this growth. 600 of these spaces will be available by the third quarter of this year. With the balance of the construction reaching completion in late 2009 and early 2010. Even after this development concludes, we still have land available for further River Rock development. Our future in Richmond looks as promising as ever.
On Vancouver Island, our View Royal casino is currently undergoing a long awaited redevelopment. In addition to almost an acre of new floor space, we'll also upgrade the hospitality offerings at this facility and create 380 new parking spaces. This parking component of the redevelopment will be complete by the end of the current year, while the facility improvements will conclude at the end of 2009. We have long believed the demand in the View Royal market exceeds our current level of capacity and look forward to offering our guests there the facility that's right sized.
In March of this year, the British Columbia Court of Appeals dismissed a challenge to the zoning bylaw that permitted our installation of...
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