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Hollywood Bowl starts rolling again

August's revenue at the bowling-alley operator was above pre-pandemic levels while investment in new centres leaves it well placed for growth
Hollywood Bowl starts rolling again

There is much debate about which Covid-19 impacts are transitory and which are permanent. Inflation is the obvious one. Then there is the decline of air travel, where the concern is that demand for business trips will never fully return. Cinemas also face structural threats because studios are releasing movies on home streaming platforms. For Cineworld (CINE) and International Consolidated Airlines (IAG), these trends are existential dangers to business models that could lead to consistently lower share ratings. 

Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
  • Popularity of ten-pin bowling
  • Good-value pricing compared with competition
  • Sound finances
Bear points
  • The effect of a nasty winter
  • Lease liabilities

Hollywood Bowl (BOWL), on the other hand, faces no such threats. It is the UK’s largest bowling operator and has seen demand for ten-pin bowling bounce back immediately after lockdowns were lifted. According to Google Trends, more people searched 'bowling' in the UK this August than any other month on record (see chart). This was reflected in Hollywood Bowl's recent trading update, where August revenue was up 50 per cent compared with 2019. “Trading in the ‘staycation summer’ was exceptional. This trading update illustrates that the relevance of bowling is undiminished and consumers have returned to the sites with confidence,” says AXA fund manager Dan Harlow.

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