Gaming news briefs for April 5, 2004

Monday, April 5, 2004 | 11:12 a.m.

Rating outlook dims

Citing a 16 percent decline in revenue and a 48 percent decline in cash flow for 2003, Standard & Poor's Rating Services on Friday revised its rating outlook from stable to negative for Mikohn Gaming Corp.

A negative outlook indicates that a rating may be lowered.

Mikohn's corporate credit and senior secured debt ratings were affirmed at "B-," one of Standard & Poor's lowest ratings and below investment grade.

Mikohn has changed its business strategy to sell its technology and game concepts to other equipment manufacturers rather than to casino operators and S&P said it may take several quarters to determine if the strategy will be a success.

Mikohn's cash flow fell from $18.4 million in 2002 to $9.7 million in 2003.

"These results were well below Standard & Poor's previous expectations, due to lower license fees from slot and table games," analyst Peggy Hwan said in a report.

Mikohn stock on Friday fell 15 cents to $4.21 a share.

Company's results improve

Mandalay Resort Group of Las Vegas today said first-quarter earnings will exceed $1.10 a share, more than analysts expected, as a new hotel tower and increased gambling revenue boost results.

Mandalay earned 69 cents in the year-earlier quarter ended April 30, the company said in a statement. The company will report full results June 3.

The addition of a 1,117-suite hotel tower and retail shops at the company's Mandalay Bay resort is attracting more visitors, helping to increase slot-machine revenue 30 percent in February and March, Mandalay said. Mandalay and rivals including MGM MIRAGE are able to raise room rates as more conventions are held in Las Vegas, J.P. Morgan analyst Harry Curtis wrote in a report.

The company was expected to earn 84 cents a share in the quarter, the average estimate of 23 cents surveyed by Thomson Financial.

Shares of Mandalay rose $2.56 to $60.77 at 10:37 a.m. in New York Stock Exchange composite trading. They had risen 30 percent this year.

LV carrier abandons plan for Baton Rouge flights

Allegiant Air has cancelled plans to fly between Las Vegas and Baton Rouge, La., without making a single flight.

The Las Vegas-based airline announced Friday that advanced bookings haven't demonstrated sufficient demand for service.

The airline said March 16 that it planned to offer four round trips a week between Las Vegas and Baton Rouge beginning May 10. The Baton Rouge Metropolitan Council had agreed to pay a $200,000 subsidy to Allegiant over two years with the airline agreeing to provide service for at least three years.

Separately, Allegiant is applying with the U.S. Transportation Department to offer scheduled service between Denver and Cancun, Mexico.

Sky City buys stake in casino

AUCKLAND, New Zealand -- Sky City Entertainment Group Ltd., New Zealand's largest gaming company, agreed to buy a 41 percent stake in Christchurch Casinos Ltd. for NZ$93.8 million ($62 million) from Aspinall Ltd., as government rules prevent it from building new casinos.

The debt-funded acquisition comes after Sky City agreed in February to buy MGM MIRAGE's Darwin casino. Some investors had complained its expansion used up earnings from its Auckland casino that should have been returned to shareholders.

Sky City, which gets 87 percent of its earnings from its Auckland casino, is restricted from building new casinos or expanding its existing gaming operations in New Zealand by government rules. To boost earnings, Sky City is buying the Darwin business, upgrading its casino in Adelaide, and building a new hotel and convention center in Auckland.

archive