Hollywood Bowl Group (BOWL) H1 2024 earnings summary

Executive summary

• Achieved record H1 FY2024 group revenue of £119.2m, up 8.1% year-over-year, with strong growth in both UK and Canada segments.

• Adjusted EBITDA pre-IFRS 16 rose 10% to £38.6m, and adjusted EPS increased 6.2% to 13.60 pence.

• UK like-for-like revenue grew 1.3%, while Canadian like-for-like revenue grew 8.0%; total Canadian revenue up 46.9% year-over-year.

• Strong cash generation resulted in net cash of £41.4m after dividend payments and continued investment in new centres, acquisitions, and refurbishments.

• Interim dividend increased to 3.98p per share, reflecting a progressive dividend policy of 55% of adjusted profit after tax.

Financial highlights

• Gross profit margin on cost of goods sold improved to 83.4% (+60bps), with UK at 83.9% and Canada at 80.0%.

• Adjusted profit after tax was £23.3m, up 6.5% year-over-year; adjusted EPS at 13.60p (+6.2%).

• Free cash flow generation of £16.5m; group adjusted operating cash flow was £31.3m.

• UK centre like-for-like revenue grew 1.3%, with spend per game up 3.2% and a slight decline in game volumes.

• Canadian Splitsville centres saw revenue rise to CAD 24.5m, with total Canadian revenue up 46.9%.

Outlook and guidance

• Modest like-for-like growth expected in H2 FY2024, with absolute growth supported by new and refurbished centres.

• Capital investment of £35–40m planned for new centres and refurbishments in FY2024; 10 refurbishments planned.

• Payroll inflation of 9.6% and business rate inflation of 6% anticipated in H2 FY2024.

• Long-term ambition to reach over 130 centres in the next ten years, with a strong pipeline in both UK and Canada.

• Well-hedged against cost inflation, with electricity costs fixed through FY2027 and payroll ratio below 20%.