April 5, 2019 / 3:25 PM / a year ago

BUZZ-Great Canadian Gaming: Troubling developments in Q4 lead to PT cut - Cormark

** Gaming facility operator gets “reduce” rating from Cormark Securities; broker cuts PT by C$3 to C$41

** Cormark refers to co’s financial disclosures related to its Greater Toronto Area (GTA) partnership as “troubling developments”

** Despite higher gross gaming revenue, GTA partnership revenue only rose C$2 mln sequentially, notes analyst David McFadgen

** Either the revenue threshold increased or there was a lot of prior capital expenditure revenue (PCE) in Q3 that didn’t occur in Q4, he writes

** McFadgen says higher revenue threshold is negative and valuing business on non-recurring PCE revenue is not advisable

** Brokerage says lack of CFO is an issue; GC terminated previous CFO but has yet to name a replacement

** In our view, disclosure remains a big issue for this company and may even be getting worse - Cormark

** The average rating by 5 analysts covering the stock is “buy” and median PT is C$56.80

** Stock up 5.2 pct YTD

Reporting by Arundhati Sarkar in Bengaluru

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