Hollywood Bowl Group plc (LON:BOWL), the UK and Canada’s largest ten-pin bowling operator, has announced its audited results for the year ended 30 September 2024.
RECORD YEAR OF INVESTMENT IN THE PORTFOLIO AND CONTINUED INNOVATION OF THE CUSTOMER EXPERIENCE DRIVING RECORD REVENUE
Financial summary
| FY2024 | FY2023 | Movement vs FY2023 | |
| Revenues | £230.4m | £215.1m4 | +7.1% |
| Group adjusted EBITDA1 | £87.6m | £82.7m | +5.9% |
| Group adjusted EBITDA1 pre-IFRS 16 | £67.7m | £64.9m | +4.3% |
| Group profit before tax | £42.8m | £45.1m | -5.2% |
| Group adjusted profit before tax2 | £45.0m | £47.5m | -5.2% |
| Group profit after tax | £29.9m | £34.2m | -12.4% |
| Group adjusted profit after tax2 | £32.3m | £36.6m | -11.8% |
| Earnings per share | 17.42p | 19.92p | -12.5% |
| Adjusted earnings per share2 | 18.82p | 21.37p | -11.9% |
| Free cash flow3 | £16.9m | £29.5m | -42.6% |
| Net cash/(debt) | £28.7m | £52.5m | -45.3% |
| Total ordinary dividend per share | 12.06p | 11.81p | +2.1% |
1 Group adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is calculated as statutory operating profit plus depreciation, amortisation, impairment, loss on disposal of property, right-of-use assets, plant and equipment and software and any exceptional costs or income, and is also shown pre-IFRS 16 as well as adjusted for IFRS 16. These adjustments show the underlying trade of the overall business which these costs or income can distort. The reconciliation to operating profit is set out below in the CFO review.
2 Adjusted group profit before /after tax is calculated as group profit before/after tax, adding back acquisition fees of £0.9m (FY2023: £0.7m), the non-cash expense of £1.9m (FY2023: £2.0m) related to the fair value of the earn out consideration on the Teaquinn acquisition in May 2022 and deducting the £0.6m received in compensation for the closure of our Surrey Quays centre. Also, in FY2023 it included the removal of the reduced rate (TRR) of VAT benefit on bowling of £0.3m.
3 Free cash flow is defined as net cash flow pre-exceptional items, cost of acquisitions, debt facility repayment, RCF drawdowns, dividends and equity placing.
4 Group revenue in FY2023 includes £0.2m in respect of TRR of VAT.
5 Revenues in GBP based on an actual foreign exchange rate over the relevant period, unless otherwise stated.
Key highlights
A year of record revenue driven by strong customer demand and operational delivery
· Total revenue of £230.4m, up 7.1% (FY2023: £215.1m)
· +0.2% like-for-like (LFL) revenue growth compared to FY2023
o UK total LFL: flat overall, with UK bowling centres LFL of +0.3%
o Canada total LFL: +6.3%, with Canada bowling centres LFL of +5.9%, on a constant currency basis
· Group adjusted EBITDA (pre-IFRS) of £67.7m (FY2023: £64.9m) ahead of expectations
· Group adjusted profit before tax of £45.0m (FY2023: £47.5m); Group profit before tax decreased to £42.8m (FY2023: £45.1m) reflecting the £5.3m (FY2023: £2.2m) impairment relating to mini-golf centres in the year
· Group adjusted profit after tax of £32.3m (FY2023: £36.6m); Group profit after tax decreased to £29.9m (FY2023: £34.2m)
· In line with last year’s updated capital allocation policy, proposed final ordinary dividend of 8.08 pence per share, bringing total ordinary dividend to 12.06 pence per share
Driving returns through record £50m investment in the quality of the estate and expanding the portfolio in the UK and Canada
· UK – 72 centres at period end
o Ten centres refurbished with all trading in line with expectations including those on 2nd or 3rd refurbishment cycle
o Four new centres added, including the acquisition of Lincoln Bowl and new centres in Dundee, Westwood Cross (Kent) and Colchester
o Solar panels installed at three more centres in FY2024, bringing the total to 30 centres in the UK (42% of the estate)
· Canada – 13 centres at period end
o Two refurbishments completed, leveraging expertise and practices from the UK, all performing in line with expectations and receiving positive customer feedback
o Four new centres added including first custom-built development in Waterloo, Ontario
Continued innovation and investment into our customer offer, resulting in higher spend per game, customer satisfaction and dwell time
· Group average spend per game increased by 2.1% to £11.05 (2023: £10.82)
o Investment in amusements offer and further expansion of contactless payment technology increasing amusement spend per game by 6.1%
o 6.0% increase in diner spend per game and 0.6% in bar spend per game supported by at-lane drink ordering technology
· Achieved record UK net promoter score of 70% (FY2023: 64%) and value-for-money customer feedback scores up 4%pts compared to FY2023
· Further investment in quality of offer with Pins on Strings technology now in over 90% of UK estate and trial commenced in Canada
· Investment of £1.5m in new modern and flexible customer booking system rolled out in UK resulting in improved reliability and reduced costs; pilot commenced in Canada
Outlook
Strong liquidity position and resilience to inflationary pressures
· Net cash at year end of £28.7m following record levels of capital investment and expansion and the £25m RCF remains fully undrawn
· Over 70% of Group revenue not subject to cost of goods inflation
· Labour cost in the UK less than 20% of revenue at centre level
· Expected increase from NI changes expected to be c.£1.2m on an annualised basis from April 2025
· Well-placed to mitigate the increased costs while keeping bowling offer affordable for our customers with a family of four able to bowl for £26
Well-placed to continue executing against ambitious growth strategy
· High demand for competitive socialising and strong appeal of bowling as a family-friendly activity with Hollywood Bowl the lowest cost option of the major UK ten-pin bowling operators
· Group trading performance has started well in FY2025 and we remain positive about our future prospects
· Maintaining our well-invested estate with ten refurbishments planned across the UK and Canada in FY2025
· Expect to open at least four additional centres in the UK and two in Canada by the end of FY2025
· On track to meet target of 130 centres by 2035
Stephen Burns, Hollywood Bowl Group Chief Executive Officer, commented:
“We are pleased to report another strong performance reflecting the ongoing demand for family friendly, affordable leisure. I am extremely grateful to my fantastic colleagues for their hard work and dedication each day to giving our customers the best possible experiences.
“Following a year of record levels of investment, our proven growth strategy continues to deliver strong returns. Bowling is unique in its ability to appeal to a wide demographic with anyone able to take part, and we are confident in the ongoing strong demand for fun and inclusive family-friendly experiences at an affordable price. The outlook remains positive as we continue to expand and innovate in the UK and seize the significant market opportunity in Canada.”
