Gamehost Income Fund announces 2007 Q4 and annual results



    Gamehost Income Fund (TSXV: GH.UN)

    RED DEER, AB, Feb. 25 /CNW/ -

    To our Unit holders,

    Management and trustees of Gamehost Income Fund (the "Fund", "Gamehost",
"We", "Our") are pleased to present winning results for the twelve and three
months ended December 31, 2007 (respectively the "Year" and "Quarter"). After
hitting a small pothole in Q3 2007 the Fund ended the Year on another record
note. Revenues for the Quarter totaled $14.9 million, the highest ever
quarterly revenues for the Fund.
    Revenues for the Year totaled $57.6 million up 16.9% over the
$49.3 million posted in 2006. Revenues for the Quarter totaled $14.9 million
up 10.6% over the $13.5 million posted in 2006 and up 4.4% over the
$14.3 million posted the previous quarter.
    Earnings before interest, taxes, depreciation and amortization ("EBITDA")
for the Year totaled $28.4 million up 19.8% over the $23.7 million recorded in
2006. EBITDA for the Quarter totaled $7.3 million up 15.2% over the
$6.3 million recorded in 2006 and up 5.4% from the previous quarter's
$6.9 million.
    EBITDA margins for the Year averaged 49.2% up 1.2% over 48.0% averaged
during the 2006 fiscal year. EBITDA margins for the Quarter averaged 49.0% up
2.0% over 47.0% averaged in Q4 2006 and up 0.5% from 48.5% the previous
quarter. Gamehost can continue to boast the highest margins in the Canadian
gaming sector. Margin improvement was achieved during a year when Alberta was
subject to inflationary pressures greater than most areas of the country and
we commend our front line management for meeting this challenge head on.
    When the Alberta Gaming & Liquor Commission rolled out Ticket In/Ticket
Out (TITO) coinless slot machine technology in July of 2007 to the Deerfoot
Joint Venture, the facility enjoyed increased gaming activity. This technology
was also rolled out in Boomtown Casino in October of 2007. Timing was
outstanding, as it came shortly after the September 1, 2007 non-smoking ban in
the City of Fort McMurray, as the positive impact of TITO on gaming activity
countered the impacts of non-smoking. In the meantime, Fort McMurray's fast
paced growth continues unabated.
    Deerfoot Joint Venture is contending with the December 2007 opening of
Grey Eagle Casino on the western edge of Calgary. Located on the Tsui' Tina
First Nation Reserve, the new facility is not complying with the Tobacco
Reduction Act banning smoking in all public places in the province effective
January 1, 2008. Management will be joining with its fellow traditional casino
operators to ask the regulators to level the playing field in this regard. In
the interim, Management continues to be innovative and actively market the
facility and its many complementary amenities which make it a superior
facility in the Calgary marketplace.
    While Grande Prairie has been experiencing a cooling in the natural gas
and forestry economies, we are reminded that this follows extraordinary
continuous growth period for both the service Plus Inns & Suites and the Great
Northern Casino. Management believes that the worst is past but will continue
its aggressive cost controls and finely tuned marketing plans to neutralize
this softening.
    A province wide January 1, 2008 smoking ban has had adverse affect on
gaming activity at the Great Northern Casino. TITO implementation is scheduled
for March 2008 and the positive impacts of this technology are expected to
offset this temporary setback, just as it did for Boomtown Casino.
    Fueled by mega projects in the oil sands rich area, Ft. McMurry's fast
paced growth continues unabated.
    In the final quarter of 2007 Canadian stock markets gave up almost all of
their annual gains. Meanwhile, the Fund posted record revenues and profits and
a 10.4% gain in the trading value of its Fund Units. Furthermore, the Fund
paid out $3.47 per unit in cash distributions during the Year up 24.8% from
$2.78 per unit in 2006. And most recently the Fund announced Our participation
in an exciting new joint venture to open the new Stampede Casino in the centre
of Calgary adding a new growth leg to the Fund in 2008. To read this kind of
news in 2007 you had to turn to the back pages.
    Sure some of this past year's news was grim. Alberta and the Fund are not
immune to some fallout from recent headlines. As pundits predict a lack luster
2008 you can read all about it in the headlines or dig for the good news in
the back pages. In 2007 or in the coming year, We can't think of a better
place to be than in the hospitality/gaming industry right here in Alberta.
With the best locations in the province, the Fund is poised to benefit from
the continued strength and potential in the Alberta economy. And when the
headlines turn positive again you won't have missed a beat.

    
    Consolidated Balance Sheets
    (audited)
    -------------------------------------------------------------------------
                                        December 31, 2007  December 31, 2006
    -------------------------------------------------------------------------
    Assets
    Current assets:
      Cash and cash equivalents              $ 13,124,669       $  7,684,671
      Restricted cash                             409,886            370,373
      Accounts receivable                       1,083,241          1,208,560
      Current portion of notes receivable               -             28,645
      Inventories                                 283,710            253,360
      Prepaid expenses                            465,935            321,962
      Due from related parties                      6,805                  -
                                            ---------------------------------
                                               15,374,246          9,867,571

    Notes receivable                                    -             58,820
    Property, plant & equipment                34,331,178         35,676,659
    Licenses                                            -          3,500,000
    Goodwill                                   42,579,216         42,579,216
                                            ---------------------------------
                                             $ 92,284,640       $ 91,682,266
                                            ---------------------------------
                                            ---------------------------------

    Liabilities and unit holder equity
      Current liabilities:
        Accounts payable and accrued
         liabilities                         $  2,460,096       $  2,224,290
        Term loans                             13,103,527         10,397,157
        Due to related parties                          -            135,451
        Unit holder distributions payable       9,287,323          8,583,738
                                            ---------------------------------
                                               24,850,946         21,340,636

    Future income taxes                         2,234,822                  -

    Minority unit holders' equity              33,065,390         35,583,320
                                            ---------------------------------
                                               60,151,158         56,923,956

    Fund unit holders' equity                  32,133,482         34,758,310
                                            ---------------------------------
                                             $ 92,284,640       $ 91,682,266
                                            ---------------------------------
                                            ---------------------------------



    Consolidated Statements of Earnings and Comprehensive Income
    (audited)
    -------------------------------------------------------------------------
                                                          un-audited
                          twelve months ended          three months ended
                             December 31                  December 31
                      --------------------------- ---------------------------
                          2007          2006           2007          2006
                      --------------------------- ---------------------------
    Revenue
      Hotel -
       rooming        $  8,627,579  $  7,515,704  $  2,078,365  $  2,030,431
      Table games        8,055,372     6,949,878     2,045,494     1,855,177
      Slot machines     23,289,647    20,309,591     5,897,451     5,238,639
      Food & beverage
       services         12,490,930    10,253,216     3,551,157     3,186,757
      Lease and
       rental              316,583       313,329        77,606        76,482
      Other              4,839,793     3,951,920     1,261,677     1,097,650
                      --------------------------- ---------------------------
                        57,619,904    49,293,638    14,911,750    13,485,136
                      --------------------------- ---------------------------
    Expenses
      Cost of goods
       sold              4,066,786     3,674,967     1,126,508     1,071,148
      Human resources   14,627,407    12,833,921     3,788,693     3,501,499
      Marketing and
       promotions        2,209,816     1,540,423       600,308       481,366
      Operating          6,349,269     5,753,629     1,599,386     1,632,108
      Corporate and
       general
       administration    2,016,341     1,829,586       489,801       458,278
                      --------------------------- ---------------------------
                        29,269,619    25,632,526     7,604,696     7,144,399
                      --------------------------- ---------------------------

    Earnings before
     the following:     28,350,285    23,661,112     7,307,054     6,340,737

      Interest charges   1,099,722     1,168,115       267,357       220,300

      Future income
       taxes
       (recoveries)      2,234,822             -      (101,497)            -

      Amortization of
       property, plant
       and equipment     2,244,094     2,482,508       582,993       675,165

      Amortization of
       licenses          3,500,000             -             -             -

      Earnings
       allocation to
       minority
       interest          9,435,528     9,797,270      3,210,941    2,666,041
                      --------------------------- ---------------------------

    Net earnings and
     comprehensive
     income           $  9,836,119  $ 10,213,219   $  3,347,260 $  2,779,231
                      --------------------------- ---------------------------

     Earnings per
      unit, basic
      and fully
      diluted         $      2.739  $      2.844   $      0.932 $      0.774
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------
    

    The Fund is an unincorporated open-ended limited purpose trust
established under the laws of the Province of Alberta. The Fund's activities
are currently confined to the Province of Alberta, Canada. Operations of the
Fund include the Boomtown Casino in Ft. McMurray, the Great Northern Casino,
Service Plus Inns & Suites and a strip mall all located in Grande Prairie. The
Fund is also a 40% joint venture partner in Deerfoot Inn & Casino Inc. in
Calgary. Most recently, the Fund has announced it will become a 20% joint
venture partner in the new Stampede Casino in Calgary, Alberta scheduled to
open in June 2008.

    This release may contain forward-looking statements. Forward-looking
statements may contain words such as "anticipates", "believes", "could",
"expects", "indicates", "plans" or other similar expressions that suggest
future outcomes or events. Use of these statements reflect reasonable
assumptions made on the basis of management's current beliefs with information
known by management at the time of writing. Many factors could cause actual
results to differ from the results discussed in forward-looking statements.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

    Complete disclosure of the Fund can be found on SEDAR at www.sedar.com.
Additional information on the Fund can be found on the Fund's website at
www.gamehost.ca.

    %SEDAR: 00019487E




For further information:

For further information: Investor Relations, P (403) 346-4545, F (403)
340-0683, E info@gamehost.ca

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GAMEHOST INCOME FUND

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