Ten Entertainment striking gold

Ten’s strategy since listing has been to gradually expand its estate – aiming for between two and four new sites annually – while investing to improve customer experience, efficiency and, by extension, financial returns. One of the main ways it does this is through implementing its 'Pins and Strings' technology, a bowling machine that is easier and more efficient to operate, while requiring less maintenance. Lanes that use legacy technology require maintenance on average every 242 games, while converted lanes last 1,000 games on average. Pins and strings is expected to be in 70 per cent of sites by the end of the year, and management estimates that it offers potential annual benefits of £3.5m-£4m. 

The strategy has until now focused on buying existing bowling centres, which can be refurbished and upgraded. However, at the most recent update, the group signalled a shift towards development, signing a lease in the Manchester Printworks. Expansion costs should be similar to buying sites, but development lengthens the time required for a site to reach full profitability. This, and ongoing central cost increases to support growth, have led to some broker forecast downgrades. Nevertheless, the group is expected to continue the strong record since listing in April 2017 of growing sales, profits and return on capital employed (ROCE) – see chart.

In September Ten announced it had reached an agreement for a joint venture with Houdini’s to roll out escape rooms nationally, which should draw more customers to its sites. It is currently developing a concept site for testing.