Hollywood Bowl's (BOWL) growth strategy encompasses three strands - to open or acquire more centres, grow like-for-like revenue, and refurbish and rebrand existing locations. Half-year figures show the leisure group is meeting these objectives in terms of the number of centres opened, an organic revenue growth rate of 1.2 per cent, and at least 10 sites to be refurbished through FY2017. This operational progress is pleasing in itself, but management has also indicated that if the balance sheet and cash generation remains strong through the second half, then a special dividend could be possible.
Adjusted cash profit was up 8.6 per cent to £18.2m, driven by new site openings and the positive impact of the Bowlplex acquisition. Customers appear ready to roll as total game volume increased by 8.8 per cent and like-for-like game volumes were up by 2.1 per cent. The number of games played before a fault is reported on a lane improved by 15 per cent year on year to 356, which management said brought it to an "industry leading" position.
Analysts at Investec expect pre-tax profit of £20.1m in the year to September 2017, giving EPS of 15.2p, compared with £10.7m and 14.2p in FY2016.
| HOLLYWOOD BOWL (BOWL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 174p | MARKET VALUE: | £261m | |
| TOUCH: | 172.25-175p | 12-MONTH HIGH: | 200p | LOW: 154p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 58 | |
| NET ASSET VALUE: | 56p* | NET DEBT: | 16% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 55.0 | 6.3 | 4.75 | nil |
| 2017 | 59.3 | 12.4 | 6.64 | 1.8 |
| % change | +8 | +97 | +40 | - |
Ex-div: 15 Jun Payment: 12 Jul *Includes intangible assets of £79m, or 52.7p a share | ||||
