Shares in ten pin bowling and family entertainment centres Ten Entertainment (TEG) gained 3.25% to 254p after reporting strong like-for-like sales after reopening.
In a trading update for the 26 weeks to 27 June the company said like-for-like sales grew 22.5% in the first six weeks after all its 46 sites could open on 17 May, compared with the same period in 2019.
Total sales were 27.4% higher than the same period in 2019 pushing the business back to profitability and positive cash generation after all centres were closed for the first 20 weeks of the year due to Covid-19 restrictions.
The growth is even more impressive when you consider that current social distancing restrictions, the rule of six and table service have reduced total capacity by around half.
RISING DEMAND
The company said the strong performance since reopening was driven by several factors including pent-up demand as families were keen to get out and enjoy social activities, a positive effect from foreign travel restrictions and the poor weather.
Longer-term factors were also at play such as the company’s focus on the customer experience, a range of entertainment beyond bowling such as escape rooms, and the well-established value for money proposition.
Chief executive Graham Blackwell told Shares that the pandemic has changed customer behaviour in a positive way in relation to bookings with the pre-booking to walk-in ratio moving to 70-to-30 from 30-to-70, allowing the firm to more effectively manage staff and catering.
POSITIVE OUTLOOK
While the company admits pent-up demand will subside and there may be some impact when foreign travel recommences over the summer, it said the business is ‘well positioned’ for growth.
Blackwell said the company was having discussions with ‘multiple landlords’ and hoped to be able to re-ignite its medium-term growth strategy of adding two-to-four sites a year once all restrictions are removed.
