Hollywood Bowl’s (BOWL) earnings are up on the back of improvements across the board for the six months to 31 March, as visitors spent more on bowling, food and drink and amusements.
The consistent revenue growth (up 4.4 per cent like-for-like across the board on the previous year) has seen broker Investec up its target price on Hollywood's shares by 4 per cent to 265p and the half-year dividend climb 11.8 per cent year on year to 2.27p.
Each of the company’s divisions saw year-on-year revenue growth, with bowling the weakest at 2.7 per cent on flat numbers of games bowled. Amusements climbed 11.6 per cent to £14.7m, and food and drink spending was also strong, registering a 5.7 per cent year-on-year increase to £19m.
The firm wants to expand that non-bowling spend from customers, and will start adding minigolf options in the next financial year, starting in York. Adjusted earnings before interest, taxation, depreciation and amortisation were 2 per cent above JP Morgan’s forecast at £21.1m.
Hollywood chief executive Stephen Burns said the minigolf move would allow the company to keep profiting from people’s experiential spending without having to find buildings fit for bowling alleys.
“This new concept gives us the opportunity to leverage our customer led operating model and occupy spaces in high quality locations, which are unsuitable from a configuration perspective for a bowling centre,” he said.
| HOLLYWOOD BOWL GROUP (BOWL) | ||||
| ORD PRICE: | 242p | MARKET VALUE: | £363m | |
| TOUCH: | 234-242p | 12-MONTH HIGH: | 249p | LOW: 172p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 64p* | NET DEBT: | 6% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 63.6 | 14.6 | 7.85 | 2.03 |
| 2019 | 67.0 | 16.4 | 8.92 | 2.27 |
| % change | +5 | +12 | +14 | +12 |
| Ex-div: | 13 Jun | |||
| Payment: | 10 Jul | |||
| *Includes intangible assets of £78.5m, or 52p a share | ||||
