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Hollywood Bowl still in demand

August was a record month as customers spent some of their saved up cash on bowling rather than travel
December 15, 2021
  • Demand for bowling returned quickly
  • Strong pipeline of new centres

The pandemic has provided some commercial ups and downs for Hollywood Bowl (BOWL) this year. Lockdown was certainly a down period, with all its sites closed up until 17 May. However, after reopening, customers awash with saved cash and no ability to spend it abroad returned to the alleys. In August, there were record revenues of £20.1m, up 50 per cent from 2019.

Overall, there was a 28.6 per cent increase in revenue compared with 2019 for the months the sites were open, although sales fell on a reported basis basis compared with 2020. The increase compared to 2019 was due to a 17.6 per cent increase in game volume and a 9.6 per cent increase spend per game, on a like-for-like basis. People were bowling more frequently and were eating and drinking more as they did it.

Lockdowns were used productively to open two new Hollywood Bowl centres and two new Puttstar centres and the plan is to open a further 10-14 sites by the end of 2024.

A lot of the Covid-19 safety measures have been retained, including identifiable balls, lane seating dividers and at-lane and at-table dining systems. Management hasn’t seen an increase in cancellations for family outings since Omicron has arrived, although the surge in cases will likely see this change. 

Broker Peel Hunt has increased its 2022 pre-tax profit forecast by £1m and is expecting a very healthy free cash flow yield of 8.1 per cent for the year, up from 2.1 per cent in 2021. If the UK government adopts a learn to live with Covid-19 policy but other spending avenues like travel remain limited, then the pandemic period could yet finish on a commercial high for Hollywood Bowl. Buy.

Last IC View: Buy, 240p, 14 October 2021

HOLLYWOOD BOWL (BOWL)  
ORD PRICE:227pMARKET VALUE:£387m
TOUCH:227-229p12-MONTH HIGH:264pLOW: 176p
DIVIDEND YIELD:nilPE RATIO:216
NET ASSET VALUE:61p*NET DEBT:£144m
Year to 30 SepTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2017114.021.112.25.75
2018121.023.912.56.26
2019130.027.614.97.43
202080.01.20.90nil
202171.90.461.05nil
% change-10-+17-
Ex-div:na   
Payment:na   
*Includes intangible assets of £78m, or 46p a share.