- Revenue rises to record £230 million
- Profit to be ahead of consensus
- Strong pipeline of new centres
Leading tenpin bowling operator Hollywood Bowl (BOWL) delivered another record year of revenue alongside tight cost control, resulting in profits coming in ahead of consensus expectations.
The positive update was well received by investors with the shares gaining nearly 3% to 334p, taking the advance over the last year to 36% compared with a 24% gain for the FTSE 250 index.
WHAT DID THE COMPANY SAY?
CEO Stephen Burns said: ‘We have delivered further profitable growth, demonstrating the success of our proven, customer-led strategy. We have continued to grow our estate in the UK and Canada and drive strong returns through the ongoing investment in our centres.
‘Our strong cash position means we are well placed to continue to invest in our growth, increasing the size and quality of our estate and looking to continually enhance the customer experience.’
Revenue for the year to the end of September increased 7% to £230.4 million, with UK revenue growing 3.8% to £200 million for the first time while Canadian revenues increased 42% to C$53 million (£30.7 million).
Against tough prior year comparatives, total UK like-for-like sales were flat with bowling centres up 0.3%, while Canadian like-for-like sales were up 6.3%. Eight new venues were opened across the estate taking the portfolio to 72 UK centres and 13 Canadian centres.
The company plans to open four new centres in the UK and two in Canada in the current financial year and is on track to achieve its target of 130 centres by 2035.
Hollywood Bowl expects to deliver full year EBITDA (earnings before interest, tax, depreciation, and amortisation) of more than £65 million, which is ahead of company-compiled analyst consensus forecasts of £64.1 million.
EXPERT VIEWS
Shore Capital’s leisure analyst Greg Johnson nudged-up his 2024 EBITDA forecast by £1 million to £65 million but maintained his 2025 estimate at £69 million.
‘We see this as another encouraging update, demonstrating continued growth in the UK, despite increasingly tough comparatives, and further validating its expansion into Canada,’ added Johnson.
Berenberg increased its 2024 EBITDA estimate to £65.1 million and slightly upped 2025 estimates. ‘With its market-leading position in the UK and the growth opportunities available to it in Canada, as well as the continued cash flow generation of the business, we remain confident in the outlook for Hollywood Bowl,’ wrote analysts at the bank.
