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US – Isle of Capri swings back to profit

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US local’s operator Isle of Capri Casinos saw a return to profit in its first quarter making more money, on its gaming floors, from its hotel rooms and from food and beverage despite a general economic softness and a pull-back in discretionary spending.

Net revenues for the quarter increased to $235.8m from $227.6m although comparisons to prior year were impacted by the closure of five properties for part of the first quarter in fiscal year 2012 due to flooding of the Mississippi River.

President and Chief Executive Officer Virginia McDowell said: “While the economic softness being experienced across our industry clearly impacted our results, we successfully increased revenues and EBITDA at several of our properties during the quarter, even not considering those impacted by flooding during prior year. However, our results at certain properties were impacted by construction disruption, transition costs associated with our enhanced Fan Club and an increased competitive environment.  Our successes were driven by continuing our plan to enhance the guest experience and contain costs wherever possible, which led to incremental earnings growth at those properties.

“We are making great progress towards the fulfilment of our three primary strategic initiatives. First, our business is more efficient as we continue to trim our costs, realign our casinos and decrease our corporate spending.  Secondly, targeted capital improvements and improved service and loyalty programs are elevating the guest experience, attracting new guests and repeat visitation.  Third, we look forward to opening Cape Girardeau at least two months ahead of the original schedule and to beginning construction on Nemacolin, once we complete the design and regulatory processes. We will also soon complete the rebranding of Vicksburg, and the renovation of our main hotels in Lake Charles and Black Hawk by the end of the calendar year. We continue to renew our asset base in a capital efficient manner.”

Isla of Capri has been looking to make targeted cost-efficient improvements at its properties in an effort to reposition our product offerings and exceed customer expectations. “We are focused on improving the guest experience by refreshing and right sizing many of our casinos floors and, in particular, are improving and expanding our array of non-gaming amenities,” Mrs McDowell explained. “At Rainbow Casino in Vicksburg, we expect to complete the $5m Lady Luck Casino rebranding by the end of the second quarter of fiscal 2013. Our enhanced customer loyalty program, the Fan Club, has been implemented at nine of our properties, and continues to deliver more guest satisfaction through a more efficient platform.  We intend to have it fully implemented across the portfolio by the end of fiscal 2013.”

Looking to the future, Isle of Capri said it expects to open its new $135m facility in Cape Girardeau, Missouri by November 1, 2012, two months ahead of the initial schedule.  Isle Casino Cape Girardeau will feature 1,000 slot machines, 28 table games, 3 restaurants, a sky deck lounge overlooking the Mississippi River, and a 750-seat event center. It is also currently finalising its construction plans for Nemacolin Woodlands Resort, where it will develop and manage a Lady Luck Casino with 600 slot machines, 28 table games.  Construction of the project is expected to take nine to 12 months.

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