TIDMBOWL
RNS Number : 5470Q
Hollywood Bowl Group plc
19 October 2023
Hollywood Bowl Group plc
Trading update for the year ended 30 September 2023
Excellent financial and operational performance in the UK and
Canada following
continued strong customer demand
Hollywood Bowl Group plc, ("Hollywood Bowl" or the "Group"), the
UK and Canada's largest ten-pin bowling operator, announces a
trading update for the financial year ended 30 September 2023
(FY23).
Key highlights
Strong customer demand driving excellent financial
performance
-- Total revenue of GBP215.0m, up 11.0 per cent vs. FY22(1) .
Excluding the effect of the reduced rate (TRR) of VAT in FY22,
Group revenues were up 16.2 per cent vs FY22
o UK total revenue: GBP192.6m, up 2.7 per cent on FY22(1) .
Excluding the effect of the reduced rate (TRR) of VAT in FY22, UK
total revenue was up 7.7 per cent vs FY22
o Canada total revenue: GBP22.5m(2) (CAD 37.2m)
-- LFL revenue growth vs. FY22:
o UK(3) : +4.1 per cent
o Canada(4) : +15.1 per cent on a constant currency basis
-- The Group expects to report EBITDA growth (pre-IFRS 16), ahead of market expectations
Further progress against expansion strategy and continued
investment in the estate
-- Three new UK centres opened in FY23 with a further 15 centres
targeted by the Group for opening before the end of FY26
-- 15 refurbishments and rebrands completed during the year in the UK
-- 54 centres (83 per cent of the Group's UK bowling estate at
year end) now have Pins on Strings technology with 13 installed
during the year
-- The Group completed the acquisition of Lincoln Bowl in the
UK, including the long leasehold, for a total of GBP4.4m post year
end. This now brings the total number of centres in the Group to 80
(UK: 71; Canada 9) - (79 as at 30 September 2023)
Canadian centres continuing to perform well
-- The nine centres operating in Canada are all trading in line with management expectations
-- A new Ontario centre is due to open in H1 FY24
-- Refurbishment and rebrand programme is progressing well
-- Remain confident in the opportunity to add up to ten centres
over the next five years, with the potential to grow the estate to
30 sites in total over the next ten years
Strong balance sheet and significant cash generation
-- GBP52.4m net cash at year end (pre-acquisition of Lincoln Bowl)
-- Undrawn GBP25m revolving credit facility
Hollywood Bowl's UK trading was driven by a combination of
strong demand for its high-quality, affordable, family-friendly
offer and favourable UK weather conditions during the school summer
holidays.
The Group's ongoing approach to investing in its customer
experience as well as its active refurbishment strategy drove new
customer visits to its centres and saw existing customers visit
more frequently, with increased dwell time boosting spend-per-game.
The total number of centres with Pins on Strings reached 54 (83 per
cent of the Group's UK bowling estate at year end) with 13
installed during the year, further improving both the experience
for customers and cost efficiencies in its centres.
The new centre opening strategy is progressing well with three
UK centres opened in the year; Hollywood Bowl Merry Hill in
September 2023, Hollywood Bowl Speke and Puttstars Peterborough in
November 2022.
The Group completed the acquisition of Lincoln Bowl including
the long leasehold, post year end, on 1(st) October 2023. Lincoln
Bowl is a 20-lane centre with diner and amusements, in a location
which fits the Group's investment criteria and will be rebranded as
a Hollywood Bowl.
The Canadian business continues to perform well. Momentum since
the acquisition has been excellent with three centres acquired in
FY23, taking the total number of Canadian centres to nine and one
new centre in Ontario due to open in H1 FY24. Management remains
confident in the opportunity to continue to add centres to the
portfolio in Canada and is in a number of negotiations.
Hollywood Bowl continues to demonstrate its resilience to
inflationary pressures, following the hedging of its electricity
costs to the end of FY24 and extensive programme of solar panel
installations, with 27 centres now completed or under construction.
Its excellent value for money offer continues to attract customers,
with a family of four able to go bowling for GBP25.
The Group's balance sheet remains strong with net cash of
GBP52.4m pre-acquisition of Lincoln Bowl and an undrawn GBP25m
revolving credit facility in place to December 2024. This well
capitalised position allows the Group to continue to invest in its
growing UK and Canadian estate.
The Group expects to declare a final ordinary dividend of at
least 7 pence per share as a result of its strong financial
performance and strategic execution. A further update on the
Group's capital allocation policy will be given in the Group's
results announcement for the year ended 30 September 2023,
during December 2023.
1 G roup revenue in FY2022 included a total of GBP8.8m relating
to the reduced rate (TRR) of VAT on bowling. GBP5.8m of this was in
respect of prior years and GBP3.0m for FY2022. FY2023 includes
GBP0.2m in respect of TRR of VAT on bowling parties.
2 Revenues in GBP based on an average foreign exchange rate over
the relevant period of 1.65 CAD: 1 GBP
3 Like-for-like (LFL) revenue growth in the UK is total group
revenue excluding any new centres and Canada. New centres are
included in the LFL growth calculation for the period, after they
complete the calendar anniversary of their opening date. LFL
revenues in FY2023 and FY2022 exclude the impact of TRR of VAT on
bowling.
4 LFL revenue growth in Canada is calculated as total Canada
revenues excluding any new centres and any revenues in FY23 that
are not LFL (pre acquisition 22 May 2022).
Stephen Burns, Chief Executive Officer, said:
"I am delighted to report another period of excellent financial
and operational performance. It has been fantastic to see so many
families in our centres as they sought out fun, inclusive,
affordable activities to keep their kids entertained throughout the
year including during the unseasonal wet summer. I am very grateful
to our dedicated team members who help our customers to enjoy the
best experiences possible in our centres.
"The investments behind our expanding offer have increased our
resilience during this uncertain economic period and when combined
with our highly cash generative business model, means we are
well-placed to continue our profitable, self-funded, growth
strategy in both the UK and Canada. The long-term growth
opportunity is significant, and we look forward to seizing this
while continuing to provide high-quality, great value entertainment
for families and friends."
Enquiries: Via Teneo
Hollywood Bowl Group PLC
Stephen Burns, Chief Executive
Officer
Laurence Keen, Chief Financial
Officer
Mat Hart, Chief Marketing and
Technology Officer
T eneo
Elizabeth Snow Hollywoodbowl@teneo.com
Laura Marshall +44 (0)20 7353 4200
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END
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October 19, 2023 02:00 ET (06:00 GMT)
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