Work on Womacks hurt profits, company says

Century Casinos Inc. on Monday blamed renovations at its Womacks Casino in Cripple Creek, along with a slowing U.S. economy, higher gasoline prices and Colorado's smoking ban, for a 19.8 percent decline in second-quarter profits.

The Colorado Springs-based gaming company reported that its earnings fell to $835,000, or 4 cents a share, in the Aprilto-June quarter from $1.04 million, or 4 cents a share, a year earlier. Revenue declined 5.8 percent during the same period to $23.5 million. Earnings during the first half of the year fell 46.8 percent to $1.38 million, or 6 cents a share, from $2.58 million, or 11 cents a share, a year ago, as revenue fell 3.1 percent to $46.7 million.

Much of the declines came from a sharp drop in both revenue and profits from Womacks - gaming revenue at the Cripple Creek hotel and casino fell at more than four times the citywide rate in the second quarter and three times the citywide rate for the first half, both compared with a year ago. As a result, operating earnings for the casino fell from a year earlier by more than 70 percent for both the second quarter and the first half.

Century attributed the declining revenue and profits at Womacks to a renovation that began in the fourth quarter and continued through the first quarter, competition from the Wildwood Casino that opened in May as Cripple Creek's largest and the effects of a slowing U.S. economy, higher gasoline prices and a smoking ban imposed on Colorado casinos on Jan. 1. As a result of the deteriorating results, Century replaced the casino's manager and laid off staff.

While Century's casino in Central City also was hurt by the economy, gasoline prices and the smoking ban, its revenue and profits declined at a slower rate than those of other casinos in Central City. The company's earnings and revenue also were hurt by the declining value of the dollar against the South African rand at its two casinos in South Africa, which was partly offset by gains at Century's gaming operation in western Canada and its casinos on cruise ships.

Century beat second-quarter earnings forecasts by four stock analysts surveyed by Thomson First Call by a penny, but its operating revenue - which does not include $1.9 million in promotional costs - fell short of analyst forecasts by about $700,000. The company's shares closed unchanged at $3.10 in trading Monday on the Nasdaq Stock Market, but have lost nearly 60 percent of their value in the past year.

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Contact the writer: 636-0234 or wayneh@gazette.com