March 8, 2010 / 9:29 PM / 9 years ago

UPDATE 2-Great Canadian Gaming Q4 beats estimates

* Q4 EPS C$0.12 vs est C$0.08

* Rev nearly flat at C$96.3 mln

* Sees 2010 development capex of C$15 mln (Adds analyst and conference call comments)

By Abhiram Nandakumar

March 8 (Reuters) - Great Canadian Gaming Corp (GC.TO), an operator of casinos and thoroughbred racetracks, posted a better-than-expected fourth-quarter profit, helped partly by its cost cutting and capital management programs.

For 2010, the company sees development capital expense of about C$15 million, with an initial C$10 million for maintenance and expects the expense reductions it made in 2009 to be sustainable.

“I think they are making the right decisions in terms of conservative capital deployment and I think that leaves them well positioned for any sort of recovery,” Raymond James analyst Kenric Thyge said by phone.

Great Canadian Gaming has been overhauling most of its casino operations, including its flagship River Rock in British Columbia and said it expects to continue doing so through the current quarter.

“These upgrades were especially important at River Rock and Boulevard, our largest properties where many machines had become relatively dated,” said President Rod Baker on a conference call with analysts.

Q4 BETTER-THAN-EXPECTED

For the quarter ended Dec. 31, the company posted a net profit of C$9.8 million ($9.54 million), or 12 Canadian cents per share, compared with a net loss of C$1.7 million, or 2 Canadian cents per share, a year ago.

Revenue was almost flat at C$96.3 million.

Analysts on average were expecting the company to earn 8 Canadian cents per share on revenue of C$96.3 million, according to Thomson Reuters I/B/E/S.

Earnings before interest, taxes, depreciation and amortization (EBITDA) as a percentage of revenue was 34.3 percent in the fourth quarter, compared with 24.4 percent, a year ago.

Shares of the Richmond, British Columbia-based company closed at C$7.78 Monday on the Toronto Stock Exchange. ($1=1.027 Canadian Dollar) (Reporting by Abhiram Nandakumar in Bangalore; Editing by Jarshad Kakkrakandy)

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