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Online business aids Churchill Downs growth

American horseracing and casino operator has reported revenues of $249.7 million for the second quarter of 2011 alongside earnings of $40 million.

Friday 29th July 2011

American horseracing and casino operator Churchill Downs Incorporated has released its financial results for the second quarter of 2011 showing a 16 percent year-on-year increase in net revenues to $249.7 million. Louisville-based Churchill Downs stated that the revenue rise was ‘primarily due to the continued expansion and growth’ of its ‘online and gaming business segments’ while net earnings climbed 41 percent year-on-year to reach $40 million. Churchill Downs’ online business reported a 56 percent year-on-year boost in net revenues to $16.7 million and included three full months of results from results as opposed to approximately one month for the same period in 2010. Similarly, the firm declared that its gaming segment saw revenues swell by 38 percent when compared to the second quarter of 2010 to $13.6 million. Earnings before interest, tax, depreciation and amortisation for the second quarter of 2011 grew to $85 million, which was a 41 percent year-on-year increase, with Churchill Downs’ online business also recording a quarter-over-quarter increase in income of $6.7 million. “This was the first quarter to fully reflect the impact of our growth-through-diversification strategy that we adopted a few years ago,” said Robert Evans, Chairman and Chief Executive Officer for Churchill Downs. “Revenues, earnings before interest, tax, depreciation and amortisation and net earnings from continuing operations set all-time records in the second quarter despite having to close our Harlow's casino property for 25 days due to Mississippi River flooding. We have estimated an earnings before interest, tax, depreciation and amortisation loss of approximately three million dollars related to Harlow's temporary closure and are working with our insurance carriers to recover that amount as part of our business interruption claim. “We continue to use the growing free cashflow generated by our operating activities to pay down long-term debt, which decreased by $80.2 million since the end of 2010, while examining other strategic ways in which we can deploy our capital. “Looking ahead, we see continue to see four paths to additional growth for our company. First, we believe our existing businesses will benefit if the economy continues to improve. Second, we are cautiously optimistic about the resolution of the Illinois gaming bill that would allow us to operate up to 1,200 slot machines at Arlington Park and up to 900 slot machines at Quad City Downs. Third, we believe there are opportunities ahead for our online business through the growth of as bettors shift their wagers to the online channel and through the possible expansion of legal Internet gaming in the United States. Finally, our business development processes and capabilities are significantly stronger and we have the balance sheet capacity to continue to look for acquisition opportunities in regional casino gaming and elsewhere.”

Source: OnlineCasinoNews

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