Tickers: GTECH/IGT, SGMS, CCL
- March 11 - SGMS 4Q CC, 4:30pm pw: SGMS
- March 16-19: Cruise Shipping Miami Conference
- March 19: Galaxy FY 2014 results
- GTECH will delist from Milan bourse April 2
- Planned IGT acquisition could be complete on April 7 (subject to approval of UK court), with merged company trading on NYSE
- GTECH took a 22m euro loss related to IGT transaction in 4Q 2014
- 4Q Conf call:
- In the Americas, same-store revenues were essentially unchanged, as the solid 4.5% growth in Instants and Draw Games was offset by a drop in Jackpot.
- Contraction in large jackpots: Only 1 Jackpot in the $300m range in Nov
- Sharp increase in product sales (Oregon VLTs and machines in Latin America)
- Will retain IL facility mgmt agreement at least through June 2021
- Achieved lottery contract wins in Minnesota and Mexico
- Belgium Jackpot was a bright spot
- Greece: were awarded up to 5,550 of the initial 16,500 OPAP machine in addition to the central system that GTECH had previously won. Still no visibility on timing.
- Operating income of the Italy segment was impacted by the mix of Machine Gaming revenues, higher remuneration paid to retailers in order to strengthen long-term partnership and the timing of a large marketing campaign for the launch of a new family of annuity tickets. On a full-year basis, however, these factors were more than neutralized, yielding a 3% increase excluding one-off items.
- Italy sports betting was unlucky despite higher drop
- IGt transaction: Redeemed 2016 notes in December
- Jan/Feb 2015:
- Italian Lotto performing well.
- Sports betting significiant growth but with high payouts
- Stable AWP, declining VLT - but has kept market share
- International same-store sales are robust
Takeaway: The completion of the integration is proceeding faster than expected.
SGMS - Spirit Mountain Casino selected the Company's Bally systems solutions for its property in Mohave Valley, Arizona. Spirit Mountain will replace a competitor's systems with the Bally SDS slot management system, which will be deployed across 250 slot machines to manage casino, slot, and hospitality data.
Takeaway: We believe Bally replaced Aristocrat's Oasis system at Spirit.
CCL - "There may be some people who experiment with both [ships], but I don't see them in competition. Britannia is cruising for U.K. people, Anthem is not that...we welcome [Anthem] to the fray," said Arnold Donald, CEO of CCL.
P&O reports that Britannia, which was built at a cost of £473 million, saw the fastest-ever sales for a maiden voyage in the line’s history.
Takeaway: We don't see a war between Britannia and Anthem either. But both ships will compete with the P&O UK core fleet and some RC brand ships, which has pressured their pricing recently.
Li Gang - The Liaison Office director remarked that the tourist number of Macau cannot grow without any limits because it would affect the quality of life of Macau residents. Asked about the tourism capacity in Macau, Mr. Li said there is no confirmed data related to the capacity. However, he reckons that how much the city can afford depends on whether it can increase its resources for tourists.
Regarding the Macau Government’s suggestion to improve the current Individual Visit Scheme (IVS) for Chinese tourists, Mr. Li perceives that the government should first decide the scale of tourism development by consulting public opinion. He indicated that only after setting the scale could the government make decisions on whether it should expand, tighten or stay with the current IVS policy.
Takeaway: Window dressing for the public or a serious effort to impede tourism? One more risk factor for this troubled market
Construction safety record - While the city is busy with construction works in the Cotai casino-resort sites and other public infrastructure projects, the number of construction-related injuries and deaths are on the rise. This is due to overworking to meet completion schedules and because of the lack of stringent checks on work safety, a contractors’ trade chamber and a labor union maintain.
From January to September last year, a total of 890 people were injured at work on construction sites - a jump from the 789 in 2013 and 564 in 2012.
Takeaway: More scrutiny will likely result in higher costs and delayed projects.
Smoking fines -Between January 1 and February 28 this year, a total of 1,154 instances of smoking in prohibited areas were recorded by authorities, the Health Bureau said in a statement. Officers have conducted a total of 728,574 inspections in different areas across the city since the Tobacco Prevention and Control Law came into force in 2012. So far, 25,307 people have been accused of smoking in prohibited venues.
Indiana Feb GGR: -2% YoY
Ohio Feb SS GGR: +1% YoY
Takeaway: February regional revenues is trending into negative territory. Cold and snowy weather offset what should've been a fairly good month
Okada Philippines resort - Tiger Resort, Leisure and Entertainment Inc – developer of Philippine casino project Manila Bay Resorts, originally slated as a US$2.3 billion venture – has reportedly been told it will be allowed to “complete” the resort by the first quarter of 2017.
Hedgeye Macro Team remains negative Europe, their bottom-up, qualitative analysis (Growth/Inflation/Policy framework) indicates that the Eurozone is setting up to enter the ugly Quad4 in Q4 (equating to growth decelerates and inflation decelerates) = Europe Slowing.
Takeaway: European pricing has been a tailwind for CCL and RCL but a negative pivot here looks increasingly likely in 2015.