GLPI: disciplined capital investment approach to drive future success


Gaming and Leisure Properties has stressed confidence in the company’s future prospects driven by a pipeline of growth opportunities that is said to remain robust despite recent additions.

Peter Carlino, Chair and Chief Executive Officer, noted that the third quarter backs-up a strategy of working alongside “leading operators” and supporting current and future initiatives, while expanding and diversifying its tenant roster in an accretive manner.

The second quarter saw revenue and adjusted EBITDA increase 7.72 per cent to $359.6m (2022: $333.8m) and 5.92 per cent to $327.1m (2022: $308.8m), respectively. However, net income dropped 16.31 per cent to $189.3m (2022: $226.2m).

Carlino noted that the quarter benefited from growth across the REIT’s stable base of gaming operator tenants, with ten properties added through 2022 and during the year ending September 30, 2023. 

These include the acquisition of the land associated with the Hard Rock Casino development project in Rockford, Illinois, for $100m, as well as Iowa’s Casino Queen Marquette for $32.72m.

In addition, a $85m transformation of The Queen Baton Rouge, formerly known as Hollywood Casino Baton Rouge, opened to the public on August 24, delivering revamped casino gaming, sports wagering, entertainment and dining.

“With our opportunistic approach to portfolio expansion, the proven long-term resiliency of our tenants’ revenue streams, and comfortable rent coverage ratios across our portfolio, we expect to continue to deliver strong capital returns and yields for our shareholders which is highlighted by our third quarter 2023 dividend of $0.73 per share, up from $0.705 per share in the year-ago period,” he commented.

Adding: “We continue to believe there are near- and longer-term cases for GLPI to further support tenants with innovative financing, capital and development structures in an accretive, prudent manner.

“This operating strategy has driven stable, visible growth of our rental cash flows and AFFO for ten years, enabling GLPI to consistently increase capital returns to shareholders.”

For the year-to date, revenue rose 9.84 per cent to $1.07bn (2022: $975.29m), net income increased 6.83 per cent to $538.11m (2022: $503.69m) and adjusted EBITDA closed at $975.68m, a 7.25 per cent uptick from $909.65m year-on-year.

Once again, the company has stressed much excitement at an agreement alongside Bally’s and Major League Baseball’s Oakland Athletics to develop an integrated casino within a new 30,000-seat Las Vegas stadium for the team at GLPI’s 35-acre Tropicana site.

With the Nevada legislature partially clearing the path via the approval of public funding, GLPI is expecting costs of approximately $175m to cover construction costs, 

Additional investments may be required under unspecified circumstances. The transaction will be subject to customary approvals and other conditions, including a requisite relocation approval from the MLB on or before December 1, 2023.

Through the remainder of the year, GLPI has increased its guidance, with adjusted funds from operations expected to close 2023 between $1.003bn and $1.006bn, as opposed to the previously expressed $94m and $999m.

“With recent portfolio additions and completed transactions combined with contractual rent escalators, we see continued financial growth in the balance of 2023 and beyond,” Carlino concluded. 

“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.”