Ten Entertainment (TEG) is weeks away from sealing a joint venture with Houdini's Escape Rooms, according to Ten chief executive Duncan Garrood, with the bowling group facilitating a national roll-out of Houdini’s in a deal that will bolster its intellectual property portfolio. Houdini's is essentially a real-life escape game based on the Japanese online game, Takagism. A concept site is under development to trial further innovations.
The pending agreement was announced in Ten’s first-half results, which revealed 7.4 per cent growth in like-for-like sales on last year’s interim period – this was primarily driven by a 5.8 per cent rise in footfall. Ten acquired two bowling sites in its first half and has since bought a non-bowling estate in Manchester, which it will convert into a new venue and open in early 2020.
Free cash flow conversion represented two-thirds of adjusted cash profit, with £5.3m in cash available for investment after the dividend payment. The group spent £1.2m on its estate, £1.5m on acquisitions and £0.5m on improving its customer proposition, leaving around £1m to reduce net debt. However, expenditure on investment is likely to Increase owing to redevelopment costs, according to chief financial officer Antony Smith.
House broker Peel Hunt forecasts full-year 2019 pre-tax profits and EPS of £16m and 20.1p, respectively, rising to £18.6m and 23.5p in 2020.
| TEN ENTERTAINMENT (TEG) | ||||
| ORD PRICE: | 232p | MARKET VALUE: | £151m | |
| TOUCH: | 232-250p | 12-MONTH HIGH: | 252p | LOW: 207p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 81p* | NET DEBT: | 20%** | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018† | 37.8 | 4.93 | 5.89 | 3.3 |
| 2019 | 41.4 | 5.93 | 7.19 | 3.7 |
| % change | +10 | +20 | +22 | +12 |
| Ex-div: | 21 Nov | |||
| Payment: | 3 Jan | |||
| *Includes intangible assets of £30m, or 46p a share **Does not include lease liabilities of £188m †26 weeks to 1 July 2018 | ||||
