MGM CFO Halkyard says F1 has broken Vegas record and plans further stock buybacks
The Nov. 18 Las Vegas Grand Prix marks Formula One's first visit to Sin City in four decades and is an exciting event for Las Vegas Strip operators as the event It was the highest-grossing weekend in MGM Resorts International's (NYSE: MGM ) history. ).
Jonathan Halkyard, chief financial officer (CFO) of the largest Strip operator, confirmed this on Tuesday at the Bank of America Leveraged Finance Conference. The F1 race made the 2019 CES show the best weekend in MGM Casino history.
"So when you consider the other events that have been held in Las Vegas over the years and the size of our company, to have a record-breaking weekend on the slowest weekend of the year is pretty special," Halkyard explain. “It met our expectations for casino crowds, food and beverages, and most importantly, I think guests and our employees had a very good experience over the long weekend.”
Halkyard admitted there had been "a lot of tension" in the months leading up to the event, angering locals, adding that the Las Vegas Grand Prix was so strong in terms of revenue generation that November 2023 would probably be the biggest Well, MGM Las Vegas hotel revenue hit a record in November.
Halkyard says MGM's capital deployment will focus on growth
Discussing the operator's balance sheet and investment plans, Halkyard added that MGM's transition to an operating company structure is largely complete, meaning capital deployed will primarily be used for growth initiatives.
He told attendees that MGM is considering an expansion of its Empire City casino in Yonkers, New York, with some of the money apparently going toward a planned integrated resort in Osaka, Japan.
We paid off our debt. We use the funds generated from these property sales to repurchase stock. "Over the past 2.5 years, we have repurchased more than one-third of the company's stock," Halkyard noted.
Buybacks have been MGM's preferred way to reward shareholders for years, and when the operator reported third-quarter results earlier this month, it said it would buy back up to another $2 billion of stock. The CFO also noted that it's possible the Bellagio operator will issue high-yield bonds in the future, "but more likely the funds will be used for growth and then some additional stock buybacks."
BetMGM Review
Halkyard briefly discussed the structure of BetMGM, which is 50% owned by MGM and the other half controlled by embattled Entain (OTC: GMVHF ). His support for such a partnership may be quite cautious.
We have three seats on the board. Entain holds three seats on the board of directors. "It's certainly always a good thing when business is as good as BetMGM's, but our focus at MGM is making BetMGM as successful as possible," noted the MGM CFO. "I don't think it represents them, but I think Entain is interested in that as well."
The comments come against a backdrop of activist investors surrounding Entain and Ladbrokes owners grappling with stock downgrades, as some analysts and investors speculate the British company's missteps could lead to unnecessary Missteps could result in a takeover proposal from MGM or could force a request to consider remedial measures for its BetMGM shares. BetMGM will host an investor day on December 4th.
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Source: www.casino.org