Join our community of smart investors

Ten Entertainment acquires new site

The bowling centre owner and operator is planning to buy up to four sites this year, and perhaps build some from scratch
March 20, 2019

Ten Entertainment Group (TEG) is focused on expansion plans. It’s planning to acquire up to four sites during the current financial year from independent operators, and has already made its first purchase post-period-end. The tenpin bowling group acquired a site in Southport for £1.4m, and chief executive Duncan Garrood expects to spend around £250,000 on refurbishing the location to the company’s standards and branding. Mr Garrood said this and other acquisitions would be paid for with internally generated cash and that the company is considering buying retail space and building new locations “from scratch”.

IC TIP: Buy at 220p

So far, existing sites are proving popular with consumers. The 43 sites that were trading during the period reported a 7.5 per cent increase in sales to £76.4m, or a 2.7 per cent increase on a like-for-like basis. The ‘Pins and Strings’ technology was introduced to another 13 sites during the year, bringing the total to 19. Mr Garrood said the system could deliver around 1,000 games before any maintenance is required, compared with around 260 on traditional machines. This results in a “significant improvement in customer experience” and also lower costs with less need for technicians on site.

Analysts at Numis expect adjusted pre-tax profits of £16.7m during 2019, giving EPS of 20.6p, compared with £13.5m and 16.6p in 2018.

TEN ENTERTAINMENT GROUP (TEG) 
ORD PRICE:220pMARKET VALUE:£ 143m
TOUCH:216-220p12-MONTH HIGH:282pLOW: 208p
DIVIDEND YIELD:5.0%PE RATIO:18
NET ASSET VALUE:84p*NET DEBT:19%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2014**46.8-3.9nana
2015**53.00.1nana
2016**67.35.4nana
201771.07.38.010.0
201876.410.712.511.0
% change+7+46+57+10
Ex-div:23 May   
Payment:04 Jul   
*Includes intangible assets of £29m, or 45p a share **Pre-IPO figures, 2016 is 53-week period